Mr. Piyasvasti Amranand
To drive PTT and Thailand onto the world stage, PTT is committed to growing its businesses in parallel with its sustainable stewardship of society, communities, and the environment. PTT believes in the virtue of a strong human capital, whose knowledgeability and capability are key to successful national development. We treasure a knowledge-based society, which leads to sustainable development. This year, we scored resounding success in laying down a foundation to equip people with scientific and technological knowledge with an educational institution to turn the Thai society into an "intellectual society" to extend national development onto the world stage. On 6 August 2015, HRH Princess Maha Chakri Sirindhorn graciously inaugurated PTT Group's Kamnoetvidya Science Academy (KVIS) and Vidyasirimethi Institute of Science and Technology (VISTEC), both located at Wang Chan, Rayong. Both academies were graciously named by the princess, meaning an academy of science and an institute of science experts, respectively.
PTT's overall business has followed a sustainable growth strategy in pursuit of a High-Performance Organization (HPO) with relentless development of technology, innovation, and knowledge of the management of work processes, production, sale, and services; strict Good Corporate Governance (CG) and focusing on transparency, fairness, and accountable business conduct; and Corporate Social Responsibility (CSR) in its mission of becoming a high-performance organization. We are striving for national energy security while supplementing business value throughout our supply chain to help the corporation grow steadily. This year, PTT achieved a 20-year agreement on LNG supply with Qatar Liquefied Gas Company Limited and completed laying the onshore Fourth Gas Transmission Pipeline linking Rayong to Kaeng Khoi, Saraburi, which connected our pipeline network at the LNG terminal with the Central Region (Nakhon Sawan) and the Northeast (Nakhon Ratchasima); the launch of the 500th NGV service station to cover 54 provinces nationwide; the inauguration of PTT's Platinum Service Stations under the PTT Life Station concept in Laos, Cambodia, and the Philippines to accommodate AEC (ASEAN Economic Community); the expansion of retail, non-oil businesses in and outside service stations, including the Texas Chicken restaurant brand, the joint venture with Daddy Dough, and the expansion of the Café Amazon franchise. All these have contributed to our retail oil market leadership for 23 consecutive years. Finally, to accommodate the power business expansion of PTT Group, we succeeded in the IPO (initial public offering) of GPSC as a public limited company to mobilize funds.
To underscore the image of a national energy company that relies on good governance and anti-corruption, PTT has always stressed corporate governance through assorted activities. This year, we organized the PTT Group CG Day to turn our practices into corporate cultures. We supported Anti-Corruption Organization of Thailand (ACT)'s "Active Citizen…Fight Corruption" event, with PTT Group executives and staff participating in a show of force with ACT, while supporting the anti-corruption policy ("Together against Corruption").
Another crucial mission of PTT is to actively promote and support local community security and self-reliance, particularly in energy consumption, mostly based on their available natural resources and on PTT's emphasis on instituting management through a participatory process integrating the capability of communities, social capital, and cultural capital with PTT's skills and experience so as to establish a strong society and communities. Also, this year we launched a successful community energy development project involving a biogas system from a pig farm at Tha Manao, Lop Buri. Here, we applied our expertise of the management of natural gas production and distribution so that communities may apply renewable energy for the generation of electricity and LPG in households. Our transfer of knowledge for communities' self-management of such a system has led to a prototype project for energy self-reliance and a learning center housing innovation and a truly participatory alternative-energy management system. This undertaking won PTT an Energy Award presented by the Ministry of Energy along with an Outstanding State Enterprise Award (outstanding socio-environmental operation), presented by the State Enterprise Policy Office.
All these success also led to numerous other awards, including our ranking for the fourth consecutive year among the world's top 100 major corporations by Fortune Magazine at No. 93, comparable to last year; ranking for the fourth consecutive year on DJSI; Green Rankings 2015 at No. 111 worldwide (against No. 136 last year) and No. 2 in the energy group worldwide (against No. 10 last year); and The Asset Corporate Award 2015 (Platinum Award Winner). Incidentally, PTT was the only Thai company to have won such platinum awards for seven straight years, a result of hard work by PTT Group's executives and staff in addition to the management capability of the Boards and the excellent support of shareholders and stakeholders.
Mr. Tevin Vongvanich
President & Chief Executive Officer
However, this was another year of grave challenges for the worldwide petroleum industry, as the world oil prices have been plunging, a situation that is expected to continue until 2016 because of market gluts brought about by the rise in shale oil production in the US. Meanwhile, the OPEC continued to keep their outputs high to preserve their market shares. Equally important, the achievement of the agreement (with the World Powers) concerning Iran's nuclear project capabilitydowngrading and the global economy in which China's economy shrank, which lowered crude oil demand so much that the surplus supply had to be kept in stock, thus keeping a lid on prices in the near term. This oil price crisis has spared no one in the oil business, particularly the upstream petroleum business, where the bulk of business performances are tied to the world oil price. It is no doubt then that PTT Group suffered losses due to the impairment of assets and accounting currency exchange rates (which had no bearing on the cash flow). For the year, PTT and its affiliates derived THB 2,026,911.57 million in sales revenue and THB 19,936.42 million in net profit, including THB 74,155.15 million in accounting impairment of assets. To survive, PTT has leveraged cost reduction measures, productivity improvement, value addition, and portfolio management of the Group for maximum flexibility and efficiency. Finally, PTT has developed scenario planning to accommodate future oil price volatility.
As PTT grows, we remain committed to our vision of becoming a Thai Premier Multinational Energy Company by 2020, while striking a balance among all stakeholders. We will adhere to our mission of supplying sufficient volumes of oil and natural gas for Thais to satisfy Thailand's demand; develop petroleum infrastructure for consumers; manage fair prices to sustainably strengthen national energy security while galvanizing Thais' faith and pride of their national energy company; and, finally, fulfill key business mechanisms in driving Thailand.
On behalf of the Board of Directors, we wish to express our sincere appreciation to all our stakeholders for their excellent support and trust in PTT Group over the years. Please rest assured that the Board, executives, and all employees will remain committed to dedicating themselves to their missions so that PTT may remain The Pride and Treasure of Thailand.