Mongkol Simaroj

Chairman

2023 was the year of development of partnerships with business partners in both oil businesses, which is the Company's main business, and other non-oil businesses, in which the Company has set a goal to invest more to increase operational potential of the group of the companies. In the past year, the Company made significant developments in two areas to lay the foundation for future growth and make the business more stable, diverse, and sustainable, as follows:

First, the Company has divested 49% of its investment in SUSCO Dealers Co., Ltd., a former subsidiary that the Company held 100 % shares, which later changed its name to SINOPEC SUSCO Co., Ltd., to SINOPEC group, the China's largest oil company, to jointly operate retail oil business through petrol stations in Thailand, jet fuel business, wholesale business, and as a partner in other potential businesses in the future. Since the SINOPEC group is the world's top oil trader with more than 30,000 petrol stations, having extensive networks of related businesses and strong financial position in the world, this joint venture will increase the potential of operating business amidst the increasingly competitive environment of the group of companies. Meanwhile, ESSO (Thailand) Public Co., Ltd., which operated oil refinery with more than 800 petrol stations, has sold its business to Bangchak Corporation Public Co., Ltd. As a result, the Bangchak Corporation Group has increased the number of petrol stations in Thailand to be over 2,200 and there will no longer be any petrol stations operating under the "ESSO" trademark in Thailand. As you can see, the domestic oil industry still has high competition and business plans are being changed consistently, which resulted in the said merger. The Company has some petrol stations managed under the "ESSO" trademark in the northeast and north areas which are currently in the process of negotiating business conditions with the Bangchak Corporation Group after the said merger is completed.

Second, the Company has established SUSCO Beyond Co., Ltd. (SUSCO Beyond) as a subsidiary to invest in new business apart from the oil business. This subsidiary is one of the distributors of electric vehicles under trademark “BYD” from the People's Republic of China which is the number one top selling electric vehicles brand in the world, according to the sales comparison in the 4th quarter of 2023. Moreover, the Thai government has measures to help with taxes and subsidies to allow electric vehicle entrepreneurs to invest in building production bases in Thailand and also stimulate the use of electric vehicles in the country. The Company has foreseen this opportunity. Hence, the Company entered business as a distributor of BYD electric vehicles in the middle of 2023, and at the end of 2023, there were 7 electric vehicles showrooms in Bangkok, Phra Nakhon Si Ayutthaya, and Ang Thong. In 2024, SUSCO Beyond plans to expand the number of electric vehicles showrooms to at least 3 more. Even though the said business began to operate only in the middle of 2023, SUSCO Beyond has been able to sell more than 2,000 electric vehicles which shows that the business has high potential and the demand for electric vehicles in Thailand is still growing rapidly. Electric vehicle registrations in Thailand grew from approximately 9,700 vehicles in 2022 to approximately 78,000 vehicles in 2023, and vehicle sales and registrations are expected to be no less than 120,000 vehicles in 2024. The Company anticipates sustained business growth to mitigate risks associated with the retail oil business where the demand for oil is likely to decline in the future.

From both areas, it is shown that the Company maintains its focus on ensuring the stability of the oil business, whereas there has been an increase in proportion of non-oil business from distributing electric vehicles and developing rental space in service stations to increase revenue for the group of companies.

As for the economic condition of Thailand in 2023, it grew at 1.9 % which was lower than anticipated, indicating that the economy has not fully recovered yet. In 2023, the average fuel consumption was 152.30 million liters per day, increased by 0.4 % compared to the same period in 2022, with the use of gasoline increased by 3.4 %, jet fuel (Jet A1) increased by 50.9 %, and diesel fuel decreased by 15.8 %. In the year 2023, the Company has sales volume of refined oil of 1,090 million liters, approximately the same volume as in 2022, due to the Company had sold some of its investments in the subsidiary to the SINOPEC group as mentioned above. As a result, sales of jet fuel and some petrol stations were not included in the consolidated financial statements since the sale of investments in May 2023, but when including the oil sales volume from SINOPEC SUSCO Co., Ltd., the group's oil sales volume in 2023 reached 1,304 million liters, an increase of approximately 17 % compared to the previous year.

For the 2023 group of companies’ performance, the Company and its subsidiaries had total revenue of Baht 33,706 million, decreased from Baht 33,771 million or 0.19 % in 2022 and had a net profit of Baht 1,226 million, increased from Baht 422 million, which was partly due to profits from the sale of investments in the subsidiary to the SINOPEC group, considering that the group of companies still managed to make good profits in the past year among many negative factors.

The Company has been working with partners to provide electric charging points in more than 20 petrol stations for many years to support the growth of electric vehicles and plans to increase the number of electric charging points. The Company has installed solar panels on the rooftops of 35 petrol stations and is in the process of installing another 15 locations as well as increasing the proportion of rental income from the non-oil businesses such as restaurants, beverage shops, car service center, parcel pick-up and delivery shops and etc. The Company uses the motto “FUEL YOUR DAY” means add energy to your day, the Company foresees that, in the future, petrol stations will be places to recharge various types of energy both cars and customers who come to use the service and then go out with strength. The Company will develop a larger service station called SUSCO SQUARE from 2 locations to 4 locations in order to respond to the changing lifestyles of consumers. The Company has collaborated with partners such as Drive Thru restaurants and beverages to increase the proportion of non-oil businesses with an emphasis on giving consumers access to products and services with convenience, speed, and safety.

On behalf of the Board of Directors, I would like to express my sincere gratitude to all stakeholders for the continued support to our businesses and also to executives and employees of our group of Companies who have devoted their efforts for the Companies. We hope that we shall continuously receive such good support from everyone, so that our Group of Companies will be growing constantly with sustainable growth.