Company Coverage
PTT Oil and Retail (OR TB): 2Q26: Weaker-than-expected Results
HOLD (Maintained)
Current price:
Target price:
Upside:
Previous TP :
Bt12.60
Bt12.50
-1.57%
Bt11.90
Analyst
Highlights
- OR reported a 2Q26 net loss of Bt1.78b, primarily due to a substantial inventory loss that significantly compressed marketing margin, while the business also entered its seasonal low period, weighing on earnings.
- 3Q26 earnings expected to turn profitable, but government intervention remains a key risk.
- Maintain HOLD with a target price of Bt12.50 (Previously Bt11.90).
Analysis
- Results came in well below expectations. PTT Oil and Retail (OR) reported a 2Q26 net loss of Bt1.78b (vs a net profit of Bt2.42b in 1Q26 and Bt2.23b in 2Q25), missing our forecast and consensus by 45% and 37%, respectively. The weaker-than-expected result was primarily due to a sharper-than-expected decline in marketing margin. The earnings reversal was driven by weaker marketing margins, lower sales volume in the mobility business, and higher operating expenses in the lifestyle business, which weighed on lifestyle EBITDA margin.
- Weaker marketing margin and lower sales volumes. The mobility business posted an EBITDA loss of Bt1.25b, mainly due to: a) Marketing margin (including stock loss) declining to Bt0.49/litre in 2Q26 (vs Bt0.74/litre in 1Q26 and Bt0.89/litre in 2Q25), primarily reflecting substantial inventory losses as crude procurement costs remained elevated early in the quarter. Excluding these one-off inventory losses, underlying marketing margin improved to Bt1.50/litre (vs Bt0.45/litre in 1Q26); and b) Oil sales volume falling to 5,558m litres, down 16% qoq and 13% yoy, mainly due to a high base in 1Q26, when panic buying was triggered by surging oil prices and concerns over domestic fuel shortages, as well as the seasonal slowdown during 2Q26.
- Café amazon sales reached another record high. Café Amazon recorded another record-high sales volume of 117 m cups, supported by continued store expansion. However, higher operating expenses, particularly advertising and promotional spending – reduced lifestyle EBITDA margin to 30.8% (vs 31.7% in 1Q26).
- Cambodia continued to weigh on the global business. The global business remained under pressure from the ongoing conflict in Cambodia. As of end-2Q26, OR operated 85 PTT Stations in Cambodia (vs 91 stations in 1Q26), resulting in a 15% qoq decline in fuel sales from its overseas operations.
- 3Q26 outlook. We expect 3Q26 earnings to return to profitability, supported by the gradual recovery in retail oil prices, which should stimulate fuel demand, like the trend seen in 1Q26. OR is also expected to recognise inventory gains as oil prices recover. Nevertheless, the earnings recovery is likely to be partially offset by the marketing margin normalising to around Bt0.85/litre.
- Looking into 2H26. We expect greater clarity regarding OR's investment strategy in Cambodia. As of end-2Q26, OR's book value of assets in Cambodia stood at US$85m. We have already incorporated a Bt1.5b impairment charge related to the Cambodia operations into our earnings forecasts.
Highlights
- OR reported a 2Q26 net loss of Bt1.78b, primarily due to a substantial inventory loss that significantly compressed marketing margin, while the business also entered its seasonal low period, weighing on earnings.
- 3Q26 earnings expected to turn profitable, but government intervention remains a key risk.
- Maintain HOLD with a target price of Bt12.50 (Previously Bt11.90).
Analysis
- Results came in well below expectations. PTT Oil and Retail (OR) reported a 2Q26 net loss of Bt1.78b (vs a net profit of Bt2.42b in 1Q26 and Bt2.23b in 2Q25), missing our forecast and consensus by 45% and 37%, respectively. The weaker-than-expected result was primarily due to a sharper-than-expected decline in marketing margin. The earnings reversal was driven by weaker marketing margins, lower sales volume in the mobility business, and higher operating expenses in the lifestyle business, which weighed on lifestyle EBITDA margin.
- Weaker marketing margin and lower sales volumes. The mobility business posted an EBITDA loss of Bt1.25b, mainly due to: a) Marketing margin (including stock loss) declining to Bt0.49/litre in 2Q26 (vs Bt0.74/litre in 1Q26 and Bt0.89/litre in 2Q25), primarily reflecting substantial inventory losses as crude procurement costs remained elevated early in the quarter. Excluding these one-off inventory losses, underlying marketing margin improved to Bt1.50/litre (vs Bt0.45/litre in 1Q26); and b) Oil sales volume falling to 5,558m litres, down 16% qoq and 13% yoy, mainly due to a high base in 1Q26, when panic buying was triggered by surging oil prices and concerns over domestic fuel shortages, as well as the seasonal slowdown during 2Q26.
- Café amazon sales reached another record high. Café Amazon recorded another record-high sales volume of 117 m cups, supported by continued store expansion. However, higher operating expenses, particularly advertising and promotional spending – reduced lifestyle EBITDA margin to 30.8% (vs 31.7% in 1Q26).
- Cambodia continued to weigh on the global business. The global business remained under pressure from the ongoing conflict in Cambodia. As of end-2Q26, OR operated 85 PTT Stations in Cambodia (vs 91 stations in 1Q26), resulting in a 15% qoq decline in fuel sales from its overseas operations.
- 3Q26 outlook. We expect 3Q26 earnings to return to profitability, supported by the gradual recovery in retail oil prices, which should stimulate fuel demand, like the trend seen in 1Q26. OR is also expected to recognise inventory gains as oil prices recover. Nevertheless, the earnings recovery is likely to be partially offset by the marketing margin normalising to around Bt0.85/litre.
- Looking into 2H26. We expect greater clarity regarding OR's investment strategy in Cambodia. As of end-2Q26, OR's book value of assets in Cambodia stood at US$85m. We have already incorporated a Bt1.5b impairment charge related to the Cambodia operations into our earnings forecasts.
HOLD (Maintained)
Current price:
Target price:
Upside:
Previous TP :
Bt12.60
Bt12.50
-1.57%
Bt11.90
Analyst
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