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To Our Shareholders

On behalf of the Board of Directors, I am very proud to present to you the outstanding 2017 financial and operating results delivered by the dedicated employees of Esso Thailand. This past year has been a blend of steadfast dedication to operations excellence and exciting opportunities to position our company for success in the years ahead.

Our evaluation of performance will always begin with an assessment of safety and environmental results. Esso achieved 5 consecutive years without a lost-time injury, a remarkable accomplishment given the risks we face every day in operations. Our fuels terminals and distribution organization achieved 24 years without a lost-time incident, which demonstrates the long-term commitment of employees to safety, and the quality of our safety management programs. Esso had no reportable spills in 2017, and our vehicle safety results were the best we’ve had in the last 4 years. We remain committed to supporting the communities we operate in, with Corporate Social Responsibility (CSR) investment across Thailand focused on education, health, safety and environmental conservation.

The refinery in Sriracha delivered excellent results in 2017, allowing shareholders to fully benefit from improved industry conditions. The refinery safely completed a significant maintenance program in the second quarter, which enabled outstanding reliability and high capacity utilization in the second half of the year. The refinery continues to identify cost-effective ways to improve profitability, including the diversification of feedstocks to increase production of higher value light and middle-distillate products.

Notwithstanding the excellent performance in our base business, some of the most exciting progress came from efforts to expand our product offering and strengthen Esso’s position in Thailand. In April, we launched a new fuels product Supreme+ Gasohol 95. With higher performance benefits than standard formula fuels, Supreme+ Gasohol 95 provides customers with superior engine performance. The launch of this new product was a great success, with distribution to our network of service stations exceeding target coupled with strong customer response. In November, we launched a new lubricant Mobil SuperTM 3000, a fully-synthetic product which provides enhanced protection, and prolongs engine life.

In addition to new products, Esso established a partnership with Pure Thai Energy Company Limited for the conversion of 49 Pure Thai retail sites to the Esso brand. Partnerships like this provide shareholders the opportunity to expand the retail footprint and brand presence of Esso in Thailand in a cost-effective way. In total, the network of Esso branded retail stations grew by 11 to 553 at the end of 2017, our highest total since 2009. The expanded network allows greater flexibility for customers to leverage loyalty programs like Smiles Driver Rewards, which has grown since its May 2016 launch to more than 1.3 million members.

All of these efforts to deliver base performance and expand our line-up of quality products underpinned financial results in 2017. Net profit for the year was a record of Baht 7.3 billion, an increase of Baht 0.6 billion from 2016 driven by improved industry refining margins and increased production of higher value products. Most importantly, earnings during the year were sufficient to position Esso to deliver a dividend to shareholders in 2018. Cash flow from operations has continued to be strong, and we emerge from 2017 in excellent financial condition with record low debt levels.

The strong financial and operating performance reflects the dedication and commitment our employees have made to deliver value to shareholders. Coupled with investments we have made in new products and an expanded retail footprint, I am excited for the future of our company. On behalf of the Board of Directors, I thank you for your continued support of Esso.

Mr. Jeremy Robert Osterstock
Chairman and Managing Director
Esso (Thailand) Public Company Limited