MD&A for Q2/06

No. MD. 110/2006
                                                August 10, 2006

Re:Management Discussion and Analysis
   For the Three Month Period Operating Results ended June 30, 2006
To:President
   The Stock Exchange of Thailand

Management Discussion and Analysis
For the Three Month Period Operating Results ended June 30, 2006

1. Report and Analysis of the Operating Results
1.1 Revenue
1.1.1 Services Income
     In Q2/2006, services income of the company was Baht 269.62 million,
decreasing by Baht 8.14 million or 2.93% compared to that of the last year.
There are two major factors influent the services income which are volume
of fuel serviced and the exchange rate. In Q2/2006, the company had volume
of fuel serviced of 1,024.76 million litres, increasing 33.47 million litres
or 3.38% from Q2/2005.
     The other important factor accounted for the movement of services
income is the exchange rate. Thai Baht has been appreciated against US Dollar
in Q2/2006 and negatively affected the services income since the service fees
are charged in US Dollar based. Thai Baht appreciated against US Dollar from
the average rate of Baht 40.44 per US Dollar in Q2/2005 to Baht 37.92 per US
Dollar in Q2/2006 which accounted for 6.23% appreciation. Together with the
increase in volume serviced of 3.38%, the services income increased by 2.93%.

1.1.2 Rental Income
     The rental income of Q2/2006 was Baht 8.21 million which comprised of
land, office and pipeline receiving system rental to Fuel Pipeline
Transportation Limited (FPT) of Baht 7.79 million and land and utilities
system rental to Thai Petroleum Pipeline Co., Ltd. (THAPPLINE) of Baht. 0.41
million. The rental income decreased Baht 1.46 million or 15.12% from last year.
The decrease in rental income was due to the decrease in pipeline receiving
system rental to FPT of Baht 1.62 million which charged at a variable rate
referenced to FPT's Jet A-1 transportation revenue according to the
decrease in volume of fuel transported of 39.47% from Q2 of last year.

1.1.3 Other Income
     Other income in Q2/2006 was Baht 15.93 million, mostly comprised of
interest income from short term investment of Baht 1.93 million, interest
income from FPT of Baht 1.14 million, principal repayment as specified in
the repayment schedule of the third debt restructuring and principal prepayment
received from FPT of approximately Baht 4.13 million. Besides, there was
guarantee fee from TARCO of Baht 2.48 million and guarantee fee from JP-One
of Baht 0.09 million. Besides, there was gain from exchange rate of TARCO of
Baht 4.26 million recorded from the depreciation of the outstanding US Dollar
loan.

1.2 Expenses
1.2.1 Cost of  Services
     In Q2/2006, cost of services was Baht 93.02 million. Major items in cost
of services are pipeline rental charge from Airports of Thailand PLC. (AOT) of
Baht 18.71 million , land rental of Baht 4.59 million, maintenance expense of
Baht 4.49 million, utilities of Baht 3.87 million, insurance expenses comprised
of all risk insurance of Baht 1.97 million and third party legal liability
insurance of Baht 4.08 million, depreciation of Baht 10.59 million, salary of
Baht 21.22 million and overtime of Baht 6.45 million. Besides, there was
retirement benefit recorded as cost of service of Baht 4.22 million.
     When comparing to Q2/2005, cost of services increased only Baht 1.07
million or 1.16%.  The increase in cost of services was in normal level.
Some major increased expenses that would worth mentioned were the increase
in salary of Baht 2.5 million, overtime of Baht 1.29 million and utilities of
Baht 1.8 million.
     Other than increasing expenses, there were important decreasing expenses
which were depreciation expense of Baht 4.81 million and retirement benefit of
Baht 1 million.

1.2.2 Administrative Expenses
     Administrative expenses was Baht 56.48 million, comprised of salary of
Baht 15.07 million, real-estate taxes of Baht 4.97 million, advertising and
public relations expenses of Baht 5.81 million, retirement benefit of Baht 2.34
million, depreciation of Baht 3.57 million and computer supplies of Baht 1.83
million.
     The Administrative expenses decreased by Baht 9.37 million or 14.23% from
Q2 of last year due to decrease in foreign exchange loss of BAFS of Baht 11.95
million, decrease in foreign exchange loss of TARCO of Baht 11.89 million from
the US dollar loan of USD 8 million. When THB appreciated against USD, TARCO
incurred exchange gain instead of loss in Q2/2005. Moreover there was a decrease
in retirement benefit of Baht 1.78 million. However, there were some increasing
expenses such as salary of Baht 1.82 million, advertising and public relations
of Baht 5.08 million and real-estate taxes of Baht 4.97 million.

1.2.3 Interest Expenses
     The Company had the interest expenses in Q2/2006 of Baht 9.46 million
which comprised of the interest from long term loan from KBANK of Baht 800
million of Baht 9.27 million and interest from financial lease of Baht 0.19
million.

1.3 Operating Results
     Net profit for the second quarter ended June 30, 2006 was Baht 101.06
million, increasing by Baht 9.60 million or 10.5% from Q2/2005 of Baht 91.46
million as a result of various factors as discussed above and the earning per
share was Baht 0.24.
     From the Company's operating results for the six-month period ended June
30, 2006, the Company had net profit of Baht 228.08 million, increasing  Baht
20.53 million or 9.89% from the same period last year, and had earning per
share of Baht 0.54. The Board of Director's Meeting No.4/2006 held on August 10,
2006 resolved to pay interim dividend from the first half of 2006's performance
at the rate of Baht 0.20 per share or totaling Baht 85 million accounted to
37% of dividend payout ratio which was lower than the Company's dividend
payment policy to pay out the dividend of at least 50% of net profit. Since
the Company has to maintain financial liquidity for the future operations
until Suvarnabhumi Airport commercially open with its full capacity.

2. Report and Analysis of Financial Status
2.1 Assets
      As at June 30, 2006, the Company and its subsidiaries had total assets
in the amount of Baht 6,824.87 million, increased by Baht 10.66 million or
0.16% from that of Q1/2006. The important details are as follows:

2.1.1 Cash and cash equivalent decreased from Baht 303.19 million at the end
of Q1/2006 to Baht 223.46 million as at Q2/2006 or decreasing by Baht 79.73
million. The details of important sources and uses of cash and cash equivalent
are as follows:
     - The Company and its subsidiaries had cash flow from operations of Baht
100.69 million from net profit of Baht 101.06 million, adjusted with cash
inflow items such as depreciation of Baht 14.51 million, increase in
retirement benefit of Baht 3.6 million, decrease in account receivable of
Baht 16.94 million and decrease in other current assets of Baht 7.41 million.
     Cash outflow items comprised of reversal of allowance for doubtful
account of Baht 4.13 million, unrealized gain from exchange rate of Baht
5.47 million and decrease in other current liabilities of Baht 33.22 million.
     - Cash flow from investment was Baht 163.91 million mainly comprised
of investment in Depot and Into-plane of Baht 79 million, investment in Hydrant
of TARCO of Baht 49.12 million, investment in Pipeline transportation from
Mukkasan to Suvarnabhumi Airport of JP-One of Baht 17.95 million.
     - Cash flow from financing was Baht 16.52 million. The Company had
increase in long term loan of Baht 142.16 million of which Baht 90 million
was drown by BAFS to invest in Depot and Into-plane Projects whereas TARCO had
increase in long term loan of Baht 47.69 million from drawing long term loan
from US Dollar portion of USD 0.58 million and from THB portion of Baht 30
million as well as unrealized exchange gain of Baht 4.26 million due to Baht
appreciation causing TARCO's long term loan to decrease. Moreover, there was
dividend payment of Baht 157.25 million.
     2.1.2 Property, leasehold improvement and equipment was Baht 5,566.28
million comprised of the Company's property, leasehold improvement and equipment
of Baht 3,251.14 million and TARCO's and JP-One's work in progress of Baht
1,636.91 million and 675.47 million, respectively.
     2.1.3 Goodwill was incurred from the acquisition of TARCO's shares
at the price higher than its book value in August 2003. The goodwill was
recorded at Baht 768.01 million and will be amortized along with the
concession period for 30 years starting from the opening of Suvarnabhumi
Airport.

     2.2 Liabilities
      As at June 30, 2006, the Company and its subsidiaries had total
liabilities of Baht 4,317.54 million, increased Baht 67.38 million or 1.59%
compared to that of the end of Q1/2006 resulted in debt to equity ratio of
1.72 : 1 time. Liabilities comprised of major items as follows:
     2.2.1 Account payable of Baht 40.48 million which comprised of account
payable - related company of Baht 30.67 million which was airport concession
fee collected from oil suppliers to pass to Airports of Thailand Plc. and
account payable - others of Baht 9.81 million.
     2.2.2 Other current liabilities of Baht 146.95 million which comprised
of major items such as accrued corporate income tax of Baht 55.37 million and
others of Baht 64.68 million which mainly were account payable from construction
of the Company and its subsidiaries. Other current liabilities decreased Baht
80.20 million from last quarter.
     2.2.3 Retention was Baht 357.67 million, comprised of the Company's
retention of Baht 195.81 million, TARCO's retention of Baht 112.52 million
and JP-One's retention of Baht 49.34 million.
      2.2.4 Long term loan from bank of Baht 3,488.95 million (including
current portion of long term loan) comprised of :
     - The first portion of Baht 800 million was long term loan from KBANK
with 7 years time to maturity starting from 2004, interest rate of 4.65% fixed,
and 3 years grace period. The Company will repay the first installment of
Baht 88.89 million in February 2007.
     - The second portion of Baht 1,720 million was long term loan from BBL
with a total credit facilities of Baht 2,000 million used to finance Depot and
Into-plane projects with 10 years time to maturity starting from 2004, interest
rate of 3-month FDR +1.25% and 3 years grace period.
     - The third portion was TARCO's loan for construction of Hydrant of Baht
1,036.64 million from BBL with a total credit facility of USD 8 million at the
rate of Libor+1.75% and Baht 700 million at the rate of 3- month Fixed Deposit
Rate +1.75%. The loan has 10 years time to maturity starting from 2002 and a
grace period of 5 years. Moreover, TARCO had additional loan of Baht 300 million
from BBL with the interest rate of MLR-2.50%. The interest rate will increase
0.25% every 6 month from contract date on May 2, 2006 until reach MLR-1.5%.
A grace period is 4 years and the loan has approximately 8 years time to
maturity. The additional loan would be used to invest in additional work as
expanded by AOT.
     - The remaining portion was JP-One loan for construction of Pipeline
transportation from Mukkasan to Suvarnabhumi Airport of Baht 70 million from
BBL with a total long term credit facility of Baht 120 million at the rate of
MLR-2.50%. The interest rate will increase 0.25% every 6 month from contract
date on December 1, 2005 until reach MLR-1%. A grace period is up to December
30, 2007 and the loan has approximately 7 years time to maturity. The interest
rate at the end of Q2/2006 was MLR - 2.25%
            Upon the completion of the drawdown period, the Company's Debt
to Equity Ratio will increase significantly. However, the Company has a policy
to maintain D/E Ratio in the level of not more than 2:1 time to maintain
financial flexibility and strength of financial status. Eventually, D/E Ratio
will drop rapidly after the opening of Suvarnabhumi Airport.

2.3 Shareholders' Equity
      As at June 30, 2006, shareholders' equity was Baht 2,507.32 million,
decreasing from last quarter by Baht 56.73 million due to the company's net
profit of Q2/2006 of Baht 101.06 million and the dividend payment of Baht
157.25 million.

3. Major factors that may affect operating performance or financial status
     The Company has contingent liability from providing a bank guarantee
to TARCO for a total loan of Baht 1,000 million and USD 8 million and interest
as well as other expenses incurred by a lender to force TARCO to pay its
liability. The liability will incur to the Company only for the remaining amount
not covered by the liquidation of TARCO's property, when TARCO has defaulted
the loan agreement and has been charged and forced to sell its property by
auction.
     TARCO had net profit in Q2/2006 of Baht 1.50 million resulting from gain
from exchange rate of Baht 4.26 million and administrative expenses of Baht
2.99 million. TARCO had retained loss as at Q2/2006 of Baht 24.80 million.
At the end of Q2/2006, TARCO had liabilities in Thai Baht Currency of Baht 730
million and liabilities in US Dollar Currency of USD 8 million. TARCO had
registered and paid-up capital of Baht 530 million.
     The Company has contingent liability from providing a bank guarantee to
JP-One for a proportion of 50% of outstanding amount from total long term loan
facility of Baht 120 million. JP-One had net loss in Q2/2006 of Baht 1.41
million resulting from interest income of Baht 0.15 million and administrative
expenses of Baht 1.57 million. JP-One had retained loss in Q2/2006 of Baht
10.12 million. JP-One had registered and paid-up capital of Baht 600 million.

Please be informed accordingly.

Respectfully yours,


(M.R. Supadis Diskul)
Managing Director