Liquidity and Capital Structure In 2023, current ratio was 1.05 times decreasing by 0.16 times compared with that in 2022 of 1.14 times. This was mainly owing to a decrease in inventory. Thus, the company has sufficient liquidity for its operations. At the end of 2022, net interest bearing debt to equity ratio was 0.86 times being similar to that in 2022. The company could complete all payments on due date and comply with all of the Financial Covenants. Other Factors Influencing Financial Performance 2024 Business Outlook 1. Petroleum Business 2024 Crude oil outlook: The global oil demand forecast is approximately 104 million barrels per day improving by around 2 million barrels per day from 102 million barrels per day in 2023 thanks to the relieved COVID-19 situations. Nevertheless, petroleum business seems to face various challenges including China’s property crisis being thought to still affect the overall oil demand, along with new production capacity in China and the Middle East that started up in late-2023 being expected to curb the Gross Refining Margin (GRM). Plus, the crude oil supply from countries outside OPEC and allies are at a high level, while OPEC and allies’ spare capacity is seen to be above 6 million barrels per day, which is considered high, making OPEC and allies’ crude oil production cut more difficult. The Dubai crude oil price in 2024 is foreseen to be in a range of USD 75-85 per barrel being close to the 2023 average price of about USD 82 per barrel. Key possible factors navigating the crude oil price are the policy interest rate, which can help grow the economy if decreased, while the U.S.’ current crude oil production is at around 13 million barrels per day being considered high and may pressure the price. Moreover, the conflict in the Middle East seems to remain a risk for the crude oil supply. 2. Petrochemical Business 2024 Petrochemical outlook: The petrochemical industry is seen to continue facing ongoing challenges from the previous year including increasing new capacity in China. Meanwhile, market demand is expected to increase at a lower rate than that of the supply. Petrochemical product demand in 2024 is projected to increase by around 2-3% after experiencing a low base in 2023 indicating a gradual recovery. During 2H24, signs of recovery in demand may begin to emerge after inflation slows down probably leading central banks in several countries to gradually decrease interest rates, which tends to increase consumers’ purchasing power. End-user industry demand is expected to gradually recover such as food and beverage packaging being benefitted from the continuously improving tourism sector. Also, the electrical appliances and electronics industries have shown signs of a demand upturn since late-2023. Moreover, exports of countries in ASEAN are expected to expand further aligning with the forecasted global trade recovery. However, increasing risks and pressures in the supply resulting from the increased new capacity in China will likely modify trade flows in the Asian region. Consequently, manufacturers exporting to China may need to explore additional 186 Management Discussion and Analysis (MD&A) IRPC Public Company Limited
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