Good morning, everyone. My name is Chutathip, Assistant IR Manager. I would like to welcome you to SPRC Analysis Meeting for the first quarter of 2024 performance. This is the first quarter that SPRC will report their performance after the acquisition of the fuel business, which has been successfully completed on the 3rd of January this year. The fuel business that I mentioned including the Star Fuels Marketing Limited, or SFL, and the share capital of the Thai Petroleum Pipeline Company, Limited from Chevron. Additionally, a subsidiary of SPRC also purchased the land being operated in the petroleum product distribution. Before we begin, I would like to introduce SPRC management team who are in the meeting with me. Let's start with Mr. Robert Dobrik, our CEO.
[Non-English content]
Next, Khun Shashank Nanavati, Executive Vice President, Commercial.
[Non-English content]
The last lady, Khun Nutsara Somkiatweera, Vice President, Financial and Accounting.
[Non-English content]
Today presentation will begin with the key highlight by Khun Rob, followed by a performance analysis by Khun Nutsara and Khun Shashank. Then back to Khun Rob again for the future opportunities and look ahead before the Q&A session. So if you have any question, please feel free to press the raise hand button or put your question into the chat channel. Okay. Khun Rob, please go ahead and start the presentation.
Oh, thank you, and thank you for taking the time to be with us today. We're just going to overview, provide you a bit of a highlight of the first quarter, get into some details around the performance in a little more detail from financial and operational perspective. Then start looking ahead to some future opportunity dialogue, and ultimately just summarize what this means in terms of our business over the upcoming quarters, so to speak, narrow the range a little bit. If you can go to the next slide. So stepping back, as we opened up with, this is an exciting timeframe for us because it's really our first time talking about the expanded SPRC. So we're starting to revise the way we measure, the way we grow value, and really trying to create an enterprise-wide value chain mindset.
Some of our measures are evolving to what is material, and we'll continue to evolve this a little bit over time as we start to build some runtime on our new business. We look back on the first quarter from a safety perspective. Once again, we have continued to really reinforce everyone going home safely every day. No significant process safety events, no recordable incidents. Now it's over 37 million man-hours over 10 years since our last day away from work case. We are very proud, but we work hard every day to make sure that we keep that discipline to drive those outcomes. That is also reflected in our operational performance through the first quarter with high reliability, operational availability, as well as utilization of our equipment to a high level, given the higher margins environments that we experienced through the first quarter. A very solid first quarter.
We are continuing to try and grow our commercial business, and we will get into a little more details of that going forward. Constantly looking for ways to improve the bottom line. We constantly challenge ourselves from a bottom line improvement program to look for ways to grow value above and beyond what we may have put into the plan. Ultimately, as we closed off the quarter, we are pretty solidly with an enterprise margin above $9. $9.16 is captured there as far as market margins. Ultimately looking at a consolidated earnings in the $166 million, our net really, consolidated net profit of $110 million. A pretty solid quarter based on strong margins and strong operational performance. Next slide, please. I want to just step back a little bit and talk a little bit about the long-term horizon, both near term, but also longer term.
If we focus our business around driving, maximizing shareholder return, maximizing earnings, not only in the moment, but for the next five, 10, 15 years. How do we make sure that we continue to focus on the things that matter? As we talk, how do we maintain that high reliable operational business? Whether it be the refinery, whether it be our retail business. How do we maintain that cost discipline, so that we are always competitive in the marketplace? As we are opening up with our expanded family and expanded value chain, how do we really seek those enterprise margins to drive high margin environment at whatever rates we choose to run, whatever the world gives us as far as the margins? Ultimately, on the fourth quadrant is how do we make sure that we continue to look for smart investments?
We could aggressively attempt to grow or aggressively attempt to spend capital on a variety of elements, but we want to be confident that the types of things we are doing are going to yield high returns and deliver the shareholder values we need, both near and long term. We are constantly looking at opportunities. We will get into a little more detail around some of the pre-turnaround activities, but also some of the longer-term things we need to do to position ourselves to be competitive over the coming decades. Surrounding all that environment is the enablers. We talk about things like digitalization, our ESG, our leading performance is capturing our benchmarking and making sure we are driving to the competitive performance levels. Operational excellence, that is our ticket, our license to operate. Make sure we run reliably, safely, environmentally sound, each and every day.
Ultimately, just once again, continue to drive our business with a digital mindset towards expanding things. These are our enablers around the outside, but the core things that drive value around the inside, that is going to drive success for 2024, but also drive success into the future. Next slide, please. This is an early capture of some of the value of the integration. We have only been at this a few months. We kick-started a bit, maybe as of late last year, just trying to get some ideas going. But really, obviously, day one was January 3rd, so we are just an early quarter behind us. We are already seeing some early signs of opportunities and wins, and they were captured in our bottom line improvement successes shown in the first slide. But looking at that integrated crude to customer decision-making.
Rather than focus on any one particular thing, think through the full value chain and the types of opportunities we have. Working collaboratively across both the retail marketing side, as well as the refinery side to seek better outputs, and some examples are just trying to, how do we de-bottleneck systems within the refinery that perhaps might have been less likely to have been done in the past because you are arguing about who should get the margins. Now it is like whatever maximizes enterprise margin is a successful opportunity. Certainly looking at integrated planning from feedstock to sales. How do we make sure that the crude intake matches the types of products where we can get the margins on the outside? Once again, having that full view of the value chain enables us to make better and different decisions than we had in the past.
We are really just starting, opening up that aperture to really even come up with even more and better ideas. Finally, agility and execution. How do we be nimble, independently and collectively, to go after opportunities? Things will surface at any moment in time, but we're not going to out-big some of the competition, but how can we be agile and quick to move to market opportunities or deal with opportunities in a very collaborative, team-working manner. It is pretty impressive to see the early successes that the team is starting to surface just by co-locating and coming up with ideas together. Finally, once again, is we constantly have a mindset of what's the enterprise? What's the right answer for the enterprise? We'll have selective measures at a retail level or at a refinery level, but bottom line, we're creating a mindset is what is the enterprise value?
Let us not sub-optimize on an individual silo basis, but really try to understand how can we grow enterprise margin and make the right decisions each and every day. Early days, but we are starting to see that reflected in our bottom line, as I said, in terms of margin environment, and even looks even more rosy as we continue to move forward. With that, I think I will turn it over to Nutsara, perhaps, or Shashank. Next slide, sorry.
Thank you, Rob, and as Rob said, good morning, everyone. Thank you for joining us. I would like to just spend a few minutes with a bit of an overview of the market and the environment we are in. The slide you see here, on the left, we talk about the oil market outlook for the year, and you see we are projecting some fairly robust incremental oil demand, 2024, 2025. Asia specifically is a big reason for that growth, as you see in the circled chart. Global demand supply still is largely driven by geopolitical factors, right, and headlines in terms of what is happening in the Middle East and other areas like Russia and Ukraine. But, in general, the Asian oil demand is expected to grow, has shown some growth in the first quarter.
Strong Mainland China oil demand during the Lunar New Year holidays actually helped, and then some of the supply barrels were disrupted, as we know, with events in the Red Sea and other events around the world. But, in general, we are seeing a bit of a return to seasonality in the second quarter of the year, with total demand expected to track to about 650,000 bbl a day contraction in most countries in Asia, with the exception of perhaps Mainland China. On the right, we are showing the Singapore Gross Refining Margin (GRM) relative to SPRC GRM over time from 2014 to now.
You can see the margins increase in the first quarter, as Rob just mentioned, and the main product cracks over the Dubai crude oil price increased, probably driven in part by the geopolitical tensions in various parts of the world, but also with some robust demand in the first quarter as well. In general, the cracks were trending upwards. The average refinery margin for SPRC was $8.31. The enterprise margin over $9.15, as Rob mentioned. We also continue to optimize our SPRC feedstocks and production to optimize our costs and achieve some economies of scale. In general, going into the second quarter, I think we will see again a return to a bit more of a seasonality, maybe closer to Singapore GRMs, and the traditional structure for the Thailand GRM versus Singapore. If you go to the next slide, please.
This is just a bit of a commentary on inventories. I know it is very hard to see the charts there, but in general, we see light distillate stocks decline as per summer driving season, which is coming up, and that will impact U.S. gasoline inventories and has a kind of knock-on effect in the Asian inventories. The decline in middle distillate stocks is projected to be a bit higher this year, hovering close to five-year average in April and May. So we are already seeing some of that come through in the second quarter of this year. Obviously, you are seeing some of that inventory play out in terms of the margin forecast so far, Q2 year-to-date, which has not been as strong as Q1. Specific to Singapore or Asia, light distillate stocks are low, and they tightened due to supply disruptions earlier in the year in the spring.
However, I think, we're going to see some impact from Chinese product export quotas, which might increase the Singapore light distillate stocks. Middle distillate stocks are also at low levels. There were some heavy turnarounds expected in Japan, specifically during May to July. There's some factors we're watching in terms of Chinese export and export quotas and then some capacity in the Middle East, refining capacity in the Middle East, coming back from turnarounds, which could have a pretty big impact on inventories. We are seeing basically converging towards a five-year high in April and May in Singapore, and so we'll see how that plays out through the remainder of Q2. Okay. If we move to the next slide, please. Okay, so just bring it a little closer to SPRC.
We're looking at the crude prices in the top chart there in dollars per barrel, and that's the price of Dubai crude oil and the OSP of Murban. You'll see over the last few quarters, the price has been sort of holding fairly steady in the low to mid-80s. For second quarter to date so far, it's a little bit higher, trending upwards towards 85. The OSP has sort of reflected downwards, consistent with the first quarter. The product cracks as I think Rob mentioned, I mentioned, they were fairly strong in Q1 relative to where we have seen them in the past. That has come down a bit already in the second quarter to date, 2024. So all the cracks, gasoline, diesel, jet fuel, have softened into the second quarter.
They continue through the second quarter just with seasonal factors and geopolitical tension continuing to play a part. Okay. I think with that, maybe I'll hand over to Khun Nutsara to cover some of our financial performance.
Thank you, Khun Shashank. On the financial performance, as Khun Chutathip already mentioned in the beginning of this session that for this quarter, we start to include the investment in fuel business in SPRC financial statement. So all the number here is based on the consolidated number, which include the fuel business and also include the Thappline shares. On the consolidated EBITDA that Khun Rob also mentioned that we have a very strong performance in the first quarter, good financial performance. Our EBITDA for the first quarter is $166 million and comparing to $74 million in the same quarter of last year. As I mentioned that the number of last year is also prepared based on the business combination under the common control. So all the number even for last year also include the fuel business number.
So this is for comparative purpose, and you can see that we have the strong EBITDA in this quarter. The strong EBITDA is driven from the strong margin that Khun Rob and Khun Shashank already mentioned. We have the high intake during this quarter. We try to maximize our throughput. Our operating expense is also under control. We have low operating expense in this quarter. In addition to that, we also have the insurance claim of $19 million in this quarter. So those are the factor that bring our EBITDA look very good in this quarter. For net profit during the quarter, we have net earning of $110 million, which is also higher than same quarter of last year. This is driven by the same factor that we just mentioned. In term of the balance sheet, we have very good, still have the healthy balance sheet.
In term of the debt-to-equity ratio, we still maintain low debt-to-equity ratio, which is at 0, around 0.27 or 0.3 below 0.3. This is to indicate that SPRC is still in a strong financial performance for the first quarter. Next slide. Looking on the refinery business only that Khun Shashank also provide the background already in term of the margin in the first quarter that we have the market GRM at 8.3, which is quite low. I'm sorry, which is very high comparing to previous quarter, which is low impact from the shutdown. In addition to that, we also have the stock gain because of the oil price increase of $2.5. So together with the stock gain, our accounting margin is $10.8 per barrel.
In term of the operating expense, we still have a very good control in term of the OPEX for this quarter, which is low at around $1.85 per barrel. For the refinery EBITDA, we have 160 comparing to the consolidated number of 156. This is driven by the strong margin that we have for the first quarter of this year. Then I pass back to Khun Shashank.
Thank you, Khun Nutsara. Just to round out the performance overview of the business, we're showing a bit of a preview into the fuels business as part of the enterprise here. You look at the top chart, is just painting the picture of the economic indicators at a macro level for Thailand. You see real GDP growth and some of the inflation. I think the history, I'm sure everyone on the call is already familiar with. Looking at 2024 and moving forward, there's a bit of a forecast from the IMF showing a bit of a normalization back to roughly 3% of real GDP growth. That's supported by a fairly stable inflation forecast going forward.
As we look at this, I think the impact of this is that we are expecting to see a bit more of a return to strength from our consumers and our customers and our partners. Their ability to continue investing for growth, investing for value, is impacted by inflation and GDP growth. That is something that we're watching, just to understand how we pace our own investments for value creation. That's one of the indicators we wanted to share. In the bottom left, we talk about our sales volume and proportion by channel. The big headline here is, we look at our portfolio from enterprise point of view, not just through a retail Caltex network, but just an overall percent of sales that we can make domestically, and through the various commodities we sell.
We've gradually been successful in increasing our total domestic market share to approximately 7% through the first couple of months of the year. That's a combination of retail sales through Caltex, what we call C&I, or commercial industrial, sales to business partners, aviation jet fuel sales, asphalt sales, and then business-to-business bulk sales that are more like a wholesale channel of sales. Overall, 7.3 million barrels of sales in the first quarter. Very strong performance, relative to where we were, in the last couple of years. The accounting margin, just an attempt to show the blended value of the commercial sales that we make per barrel of sales that we do. It was showing as $1.67 for the first quarter. In the far right, talking about just the number of service stations.
This is magnifying a bit on that retail Caltex segment of our sales. It just shows a stable base of roughly 450 stations that we market our product through. We'll continue looking to make selective investments to add value to that network. As we look to expand that network and increase the throughput of that network, we'll continue reporting on how we're doing in that metric over time. Okay, thank you. Let me pass it over to Rob to cover the last few slides here.
Sure, thanks. Next slide. Look, I think as we've commented on the past, when we look at marketing and commercials, Shashank just touched a bit on the commercial side of things. We're constantly looking for additional opportunities beyond this acquisition. But really, we're looking at more of a, steady state would be just a rate of continued growth. Try to look for opportunities to drive increased volume through the existing network, not to really compete in terms of just throwing more stations out into somewhat of a saturated market. How do we, as Shashank alluded to, be very targeted in where we're looking to grow and look for different ways to perhaps partner, in terms of some of that growth going forward. We're still working our way through the opportunity space. We've anchored a certain amount of our volume. There's probably opportunity to anchor a little bit more.
We will look for that opportunity to continue going forward. On the refinery side, I think we are generically looking at a fairly strong margin environment on a balance basis. Any quarter may be what it is. If you look, projecting out to the years ahead, generally strong margins relative to historic projected based on declining refining capacity in the universe, continued demand, especially in the Asia region. We anticipate, once again, continuing to try to drive optimal throughput and try to high-grade specific products in our mix. If we look at coming up in our 2026 shutdown, we are looking to advance what I characterize as relatively low cost, high return types of projects. Not long term big bets, for the foreseeable couple next three years. This is around just some product optimization that we will execute during the shutdown with very high payouts.
There is also some different opportunities, that terminology is touch, dipping our toe into the water, as to how we can look for some opportunities to get into perhaps the bio and circular business opportunities. Start to look at some partnerships with others around processing some selective recycled products in the refinery. Not high scale, but just to try and get our foot in the door, start to learn the business and look the opportunity and then look to grow, as the opportunities and the economics warrant over time. It is a mix of opportunities, some longer term strategic outlook opportunities, but really near term is just around high return, to reinforce that maximize total shareholder return. Make sure that our investments are value accretive, not just growth for growth's sake, but actually driving incremental value with each and every investment we make. That is very high level.
If I can go to the next slide. We are doing this in the guise of the long term, we want to be a viable, sustainable business. How do we make sure that the things we are doing are positioning ourselves with the communities in which we operate? How do we continue to be viewed as a positive partner in our communities, whether it be through our operational performance, our environmental efforts, our community relations efforts, continue to demonstrate how we are creating value in our communities, but then also position our product mix and the businesses that we are in into the future to be a partner as part of any energy transition. There is no doubt the world is going to be moving to a lower carbon future.
How do we do that at a pace that makes sense, and not get too far ahead of ourselves relative to the returns that we can hope to achieve through those investments? Once again, we are continuing to look for opportunities, more likely to be partnerships than fully owned types of efforts. Once again, just to get the right timing and the regulatory support and the right environment to support the sustainability of those investments over time. With that, I think that kind of brings it to, maybe I just want to close with maybe a look ahead. Next slide. Sorry. Yeah. If we look forward over the coming quarters, there is a laser type focus on trying to get our SPM resumption. A lot of excellent progress in terms of working through what I characterize as a variety of preconditions from the regulators.
At this stage, I'd say we have pretty solid community support with our local community. We have generally satisfied all the regulators' conditions. Now we're just looking for a final resolution resumption approval. There's no more physical work being done. All the equipment is installed, ready to operate. Now we're just going through final regulatory approvals and licensing over the next coming weeks. We're cautiously optimistic given the progress and the feedback that we're receiving from the various parties. Hopefully, we'll have good news to report in the coming quarter. We're also going to continue to really look to maximize utilization, but also be mindful of the margins that are out there, as Khun Shashank captured. I'm starting to see a little adjustment here in the second quarter.
We'll look to, once again, make sure that we respond to drive value, not just volume, and make sure that we adjust our mix and our volume metrics to match that equivalently. We continue to drive for ideas to maximize enterprise margins. Once again, it's early days. We just touched upon a few earlier, but our teams are actually trying to look out to the future, multiple months, multiple years, as to the types of things we could be doing to drive even more value. It's early days, but quite exciting about the ways that we're driving towards bottom line improvement and creating more value. From a financial perspective, we need to manage our cash flow. Be thoughtful of how we spend what we spend on. As I talked about, not afraid to make investments and make sure they're truly value accretive.
Then maintain a strong debt ratio so that we're positioned to jump on opportunities into the future. Then finally, just once again, we talked about long term, how do we continue to grow value through a value chain mindset, look at energy transition opportunities in partnership with others. Then, once again, in the short term, really kind of viewing it more of a high return, low investment type profile, as we prepare for the 2026 shutdown. With that, I think I'm going to put it to a close and just really open it up for questions, if that makes sense.
Okay. Thank you very much, Khun Rob and all presenters. Now we are entering to the Q&A session. If you have any questions, just put on the raise hand button or put your question into the chatting channel. We have the team to monitor it. Okay, I saw someone. Khun Komsun, you're raising hand, so please unmute your microphone and start your question.
Thank you for the detailed presentation. I have a few questions. The first one is for Rob. Will SPRC be interested in sustainable aviation fuel? Are there any hurdles that prevent you from jumping into that area? The second question is for Khun Shashank. I agree that SPRC acquired the fuel network at a very cheap valuation, but the margin looks a little light. How would you improve that margin going forward? At the market share of 7%, do you have any plans to raise that up or have any plans for the throughput per station for the fuel business? On the business mix, I saw that you have a significant amount of commercial fuel sales. Is that optimum level that we are seeing, or do you think that you will tilt more towards the fuel retail business going forward? Thank you.
Thanks. Let me just touch a little briefly upon SAF. I think the market is still maturing, for lack of a better way to describe it. I think the capability to manufacture is out there, and whether that is everybody doing it individually or I think more likely to be partnerships moving forward. I do not think we are seeing a sustained market from the buyer side of things. I think it is still pretty hit-and-miss in terms of willingness to pay the premiums that are required to support broad growth in that particular area. So once again, we are monitoring this space, looking for opportunities. But I do not know that it is not a priority focus for us in the moment.
I can maybe turn it over to Shashank to add some commentary to that, and then maybe build on that with some of the other questions with regards to the retail side of the business. Shashank, did you have any thoughts?
Yeah. No, thanks, Rob. Thanks, Khun Komsun, for the questions. Just on SAF, I think it is a commercial opportunity for us. I think we are studying the ability to be able to supply it ratably and reliably. Just that the market so far has not matured to the extent that is needed to maybe support investment in the long term. But we are definitely a willing participant in that space if the market were to materialize here in Thailand. On the questions on the commercial mix, I think the margin was, the way it turned out in Q1, was a bit of a reflection of just the market length, in Thailand as well. It was a fairly challenging environment in both the retail space as well as just the domestic sales space. I think that fluctuates over time, based on seasonality, based on other factors.
But that was the mix of sort of the entire portfolio of sales. At a market share of 7%, as you alluded to, we do want to continue growing that in general, right? There's no sort of firm target in mind. It's sort of take opportunities to create value in the market as they're available to us. And so that may come in different flavors and different commodities at different times. But what we're hoping to do is be ready to capture those opportunities no matter where they arise, while still sort of moving SPRC in the long-term strategic direction of being able to sell more into the domestic market and increase our share of sales, commensurate with our share of refining. In retail, the throughputs actually have been on an upward trend for the last two, three years, sort of coming out of the COVID period.
And in fact, we saw a pretty good result of increasing same-store sales and retail sales throughput in the first quarter. We were up like 25%, 30% in some of this retail station throughputs. And so we want to continue focusing on that. We recognize that that also kind of is variable over time, as consumer demand ebbs and flows, seasonality, monsoons, things like that. But in general, we want to continue supporting the ecosystem around the retail network to bring in more customers and customers more frequently and increase our throughput. And so we are focused on that. I think we alluded to that through our non-fuel offerings that we're working to develop further, in one of the slides.
Then, the channel mix, I'd say there's a pretty healthy mix of retail, what we call C&I, bulk sales, and that actually covers gasoline and diesel and sort of the multi commodities. So we're focusing on, like I said, capturing the opportunities as they present themselves. It does vary over time and through seasonality as to how much of the share gets sold through each sales channel, if you will. We aren't driven by just a milestone percentage. We're looking to just say, as opportunities come up, we look at the ones that create the most value for us, given our competitive advantages, and then capture those opportunities. And then hopefully we can share some of the trends in future meetings with you as well. Thank you.
Thank you.
Yeah. Maybe just to sort of slowly build on it. I think we tried to make the point earlier that we're really trying, looking for enterprise margins as well. Sometimes we may do something that on the surface doesn't appear to be a big winner on the retail side or some other front. But actually when you step back and look at it in enterprise, it does anchor our volume in a more value accretive manner than it would have otherwise. So we're truly trying to make sure that we look full value chain enterprise as we look to drive the decisions moving forward. Sure.
Shashank, I have a follow-up question, real quick. You were mentioning that the market might not be ready for SAF. I mean, what do we need to have it? Is that a blending mandate that put in place by the airlines around Thailand or in the region so the market will take off, given that the SAF was like a couple of time higher than a normal jet fuel? Rob, you mentioned about the production. So we are able to do if we want to, for SAF. I mean, we have no problem with the hydrogen or whatever.
I think anything one would do would require some level of investment, but I think we have to be a bit cautious in assuming everything is done within a particular domain or a particular site within a refinery fence. I think some of the future opportunities are more around partnerships. So it could be arguably done in partnership with someone else to supply the market as opposed to an SPRC investment and then every refinery making the investments on themselves. That doesn't seem to be that would be the best approach to driving towards energy transition. So we're trying to make sure that we're engaging with others to reduce future capital exposure and look at more partnerships around a variety of opportunities, whether it be SAF or some bio-oil reprocessing or a variety of other things. We don't have to do everything ourselves.
How do we leverage partnerships is perhaps a broader terminology moving forward.
Yeah. Just to add on the demand side of that, the sales enablement, I think one of the challenges historically has been there is a need for a higher investment to be able to produce sufficient volumes of SAF, right? No matter where it's done, whether it's SPRC or another refining complex. But the price that customers are willing to pay for the jet fuel is not commensurate with the investment required, right? So it's sort of higher cost product to make, but I don't want to pay any more for it. That's an equation that needs a bit of a collaborative approach to solve between the customers, the suppliers, and as the industry as a whole. Work in conjunction with sort of even the government and some of the blending mandates and things.
I think there's some challenges there to figure out before we move steadily in a big way in that direction.
Thank you.
Okay. Any other questions? I saw Khun Wattana raising the hand. So Khun Wattana, please go ahead. Please don't forget to unmute your microphone before you start your question.
Thank you for the opportunity for asking. I am having just one housekeeping question. In the commercial accounting margin, I mean, in the presentation, the $1.67 per barrel. I just want to confirm that this number is based on gross profit level for the fuel business or other line, because I am trying to compare these numbers with your peers.
Khun Shashank, would you like to answer or okay, I can help.
Either one. Shashank or you. It is good.
Okay. This is the marketing margin, which is after deduct the transportation.
Yeah. This will be the, not the gross profit, but what we call net margin on all of our commercial sales. It's not just retail. It includes C&I, includes bulk, includes aviation, and there's a wide mix of margins in that. Also different margins by commodity for gasoline, diesel, and jet fuel and asphalt. It's really showing one number that encompasses all of that 7.4 million barrels of sales in Q1. But it's sort of a net margin number that's net of your sort of rebates and discounts and things, and some promotional activity, as well as transportation to get the product to the market.
So just to confirm, this is gross profit and then deduct all the SG&A for the fuel business to come to roughly to come to this $1.67 number.
This is before.
Yeah.
Yes, Khun Shashank, thank you. This is before the SG&A, the margin here. But after the transportation cost.
Okay. Thank you. Thank you very much.
Next, Khun Panuwat.
Thank you for the presentation. I would like to ask about the impact of their costing from Euro V.
Yeah, so maybe I can start and maybe I'll turn it over to you, Shashank. But, in general, we made some minor adjustments last year to position ourselves to be able to produce Euro V. Primarily on not really any capital type changes, it was more around catalyst. So there is an increased cost, arguably, to obviously produce Euro V over prior products, more in terms of catalyst life and consumption. But that's the primary driver, and then offsetting that is obviously the higher yields and the higher margins associated with Euro V. So, I'm not quite sure if I'm answering your question, but generally, we're seeing a net uptick in terms of our margin environment as a result of Euro V as opposed to a destruction that is as a result of Euro V. So Shashank, any thoughts?
No, I think you said it well, Rob. There is a cost to producing Euro V relative to Euro IV, and that is reflected in the financials for the year, and that cost, to varying degrees, has been sort of passed on to consumers in some areas, and some areas not so much.
It seems like there is no more questions. So again, if you have any other questions after the meeting, please feel free to contact the investor relation through the contact channel that is showing in the screen right now, either through the email or the telephone call. Again, I would like to thank you everyone for joining this session and to support SPRC as always. Thank you very much.