SET Announcements

No. MD. 110/2002 9 August 2002 Re: Management Discussion and Analysis For the Three- Month Period Operating Results ended June 30, 2002 To: President The Stock Exchange of Thailand Management Discussion and Analysis For the Three- Month Period Operating Results ended June 30, 2002 1.Report and Analysis of the Operating Results 1.1 Revenue 1.1.1 Services Income In the second quarter of the year2002, the services income of the company was Baht 208.79 million, decreasing by Baht 11.68 million or 5.30% compared to the first quarter of this year and decreasing by Baht 13.47 million or 6.06% compared to the same period of last year. The major factor accounted for the decreasing in services income would be the volume uplifts which was 867.15 million litres, decreasing by 2.36% from last quarter and slightly increasing by 0.47% compared to the same period of last year. The decreasing volume from the first quarter was due to the fact that the second quarter is a low season period of aviation business or summer season which starting from March to October of each year. Furthermore, the slightly increase in volume from the same period of last year was a result of a reduction of flights stopped at Donmuang of Qantas Airways and British Airways starting from April 2002. However, for the first half of this year, the Company still had a growth of volume uplifts of approximately 1.76% from the same period of last year. The other important factor accounted for the decreasing in services income would be the exchange rate. Since the Baht appreciated substantially against US Dollar, the second quarter average exchange rate was Baht 42.79/USD which appreciated 6.94% compared to the same period of last year and 3.11% compared to last quarter. 1.1.2 Rental Income The rental income of the second quarter of 2002 was Baht 12.34 million which comprised of office and pipeline receiving system rental to FPT of Baht 12 million, land and utilities system rental to THAPPLINE of Baht 0.3 million and office rental to TARCO of Baht 0.05 million. The rental income was at the same rate as last year. 1.1.3 Other Income Other income was Baht 7.39 million for Q2/2002 which comprised of interest income from short term investment of approximately Baht 5.53 million and FPT interest and principal repayment as specified in the repayment schedule of the Debt Restructuring Agreement No.3 of approximately Baht 2.40 million. 1.2 Expenses 1.2.1 Cost of Services Cost of services was Baht 76.32 million, decreasing by Baht 1.82 million or 2.32% from Q1/2002 and increasing by Baht 4.37 million or 6.07% compared to the same period of last year. Other than normal growth of expenses, the major factor leading to the increase in the cost of services was a substantially increase in insurance expenses of Baht 2.90 million due to the terrorist attack in the U.S.A. last year. 1.2.2 Administrative Expenses Administrative expenses was Baht 39.17 million, increasing by Baht 8.82 million or 29.05% due to the post IPO advertising and public relations expenses of Baht 4.74 million and legal fee of Baht 1.25 million. 1.3 Operating Results Net profit for three-month period ended June 30, 2002 was Baht 78.24 million, decreasing by Baht 18.71 million or 19.30% from the same period of last year as a result of various factors as discussed above. From the Company's operating results for the six-month period ended June 30, 2002, the Company had earning per share of Baht 0.57 using weighted average number of shares. The Board of Directors' Meeting No. 4/2002 held on August 9, 2002 resolved to pay interim dividend from the first half of 2002's performance at the rate of Baht 0.25 per share as specified in the Company's dividend policy to pay out the dividend of approximately 50% of net profit. 2.Report and Analysis of Financial Position 2.1 Assets As at June 30, 2002, the Company and its subsidiary had total assets in the amount of Baht 1,844 million, reduced by Baht 155.92 million or 7.80% compared to last quarter. The important details are as follows: 2.1.1 Cash and cash equivalent reduced from Baht 757.39 million in the first quarter of 2002 to Baht 292.25 million in the second quarter of 2002 as a result of the dividend payout from 2001 performance of Baht 154.50 million and investing in short term investment of Baht 250 million. The remaining was investment in Depot Project at Suvarnabhumi Airport of approximately Baht 50 million. 2.1.2 Short term investment was Baht 706 million, rose Baht 250 million from investment in promissory notes of financial institutions which yielded higher return than bank deposit. 2.1.3 Investments accounted for under equity method was Baht 171.68 million, rose by Baht 19.21 million from a payment of capital increase of Thai Aviation Refueling Co.,Ltd. of Baht 20 million. 2.2 Liabilities As at June 30, 2002, the Company and its subsidiary had total liabilities of Baht 324.42 million, decreased Baht 234.31 million or 41.94% compared to the last quarter due to the decrease in proposed dividend payable of Baht 154.50 million and other accrued expenses of approximately Baht 70.68 million. In addition, there was a decrease in liability under agreement to purchase rights of claim of Baht 17.296 million. At present, the Company had no long term liabilities from any financial institutions. 2.3 Shareholders' Equity As at June 30, 2002, shareholders' equity was Baht 1,519.62 million, increasing from last quarter of Baht 78.39 million due to the second quarter net profit. Please be informed accordingly. Respectfully yours, (M.R. Supadis Diskul) Managing Director