Earnings Report /
Thailand

Star Petroleum Refining PCL: Shallower 3Q22 net loss than estimate; turnaround seen in 4Q22

  • Shallower net loss than estimate

  • SPRC reported a 3Q22 net loss of Bt5,027m

  • SPRC’s 4Q22 core earnings look set to rise YoY and QoQ

Suppata Srisuk
Suppata Srisuk

Equity Research Analyst

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Bualuang Securities
9 November 2022

Expectations of enhanced core earnings growth through 4Q22, the substantial core operational improvement this year, underpinned by GRM expansion should catalyze the share price going forward. Furthermore, SPRC’s current valuation is still undemanding—a YE23 PBV of 1.3x (0.5SD below its long-term average).

Shallower net loss than estimate

SPRC reported a 3Q22 net loss of Bt5,027m, a reversal from net profits posted in 3Q21 and 2Q22. Stripping out a Bt6,978m inventory loss, a Bt433m FX loss, and a Bt187m loss on derivatives, the core profit would be Bt1,089m, a YoY turnaround but down 82% QoQ. The net loss was 7% shallower than our estimate, due to smaller inventory loss than modeled (but it was 26% deeper than that of the consensus).