SET Announcements

MD.079/2009 May 13, 2009 Re: Management Discussion and Analysis For the Three Months Period Operating Results ended March 31, 2009 To: President The Stock Exchange of Thailand Management Discussion and Analysis For the Three Months Period Operating Results ended March 31, 2009 1. Report and Analysis of the Operating Results For the results of operations of three months period ended March 31, 2009, Bangkok Aviation Fuel Services Plc. or BAFS and its subsidiaries' net profit was Baht 108.0 million as compared to net income of Baht 140.8 million earned during the same period in 2008 which is decreasing by Baht 32.8 million or 23.3% due to economics recession together with rising political tension in the country. The main reasons for changes are as follows: 1.1 Revenue For the three months period ended March 31, 2009, total revenues of BAFS and its subsidiaries amounted to Baht 510.5 million, an decrease of Baht 79.7 million or 13.5% when compared with that for the last year which details are follows. 1.1.1 Services Income Services income of BAFS and its subsidiaries amounted to Baht 503.0 million, an decrease of Baht 70.4 million or 12.3% when compared with that of last year. Which the major factor influent the decreasing in services income of company's group was decreased in volume of fuel serviced by 14.9% (y-o-y) to 1,035.9 million litres. For the moving domestic flights of Thai Airways from Don Mueang Airport (DMK) to Suvarnabhumi Airport (BKK), didn't take much effect to BAFS as Thai Airways is still the company's customer. And BKK's Into-plane services fee was reduced by 7% from last year which was less than the reduction of volume. Service income of BAFS was Baht 342.8 million, TARCO's was Baht 138.1 million and JP-One's was 22.2 million respectively. 1.1.2 Other Income 1.1.2.1 Rental Income The rental income of the consolidated financial statement of company's group in Q1/2009 was Baht 4.7 million, decreasing by Baht 0.3 million or 6.4% compared to that of the last year. 1.1.2.2 Dividend receive from subsidiaries Dividend receive from subsidiaries Q1/2009 was Baht 75.7 million increasing by Baht 71.8 million when compared to that of the last year which was dividend from TARCO and JP-One of Baht 74.5 million and Baht 1.2 million respectively. In Q1/2009 TARCO's Share Holder Meeting on March was approved dividend payment which was earlier than April of last year, leading to sharply increased in net profit of BAFS's Separate Financial Statement when compared to that of last year. 1.1.2.3 Other Income Other income of the consolidated financial statement of company's group was Baht 2.8 million, decreasing by Baht 9.0 million or 76.2% compared to that of the last year. Which Baht 5.9 million came from decreased in FX gain that mainly as a result of interest rate and cross currency swap for US$ long term loan of TARCO as Thai Baht depreciated against US$ from 32.26 Bt./US$ last year to 35.64 Bt./US$. 1.2 Expenses 1.2.1 Cost of Services For the consolidated financial statement of company's group in Q1/2009, Cost of services was Baht 224.8 million, decreased by Baht 12.8 million or 5.4% compared to that of the last year. Major items which decreased cost of services are 1) decreasing in Air port Concession Fee by Baht 9.6 million that was in line with dropping of volume 2) decreasing in maintenance expense by Baht 4.2 million 3) decreasing in salaries and other employee's expense of Baht 2.7 million. However, in this quarter depreciation and amortization was increased of Baht 5.3 million. Moreover, TARCO's and JP-One's cost of services were Baht 26.9 million and Baht 15.7 million respectively. 1.2.2 Administrative Expenses Administrative expenses for the consolidated financial statement in Q1/2009, was Baht 67.6 million, decreasing by Baht 1.5 million or 2.2% compared to that of the last year. Which TARCO's and JP- One's administrative expenses were Baht 9.3 million and Baht 3.1 million respectively. 1.2.3 Interest Expenses The interest expenses for the consolidated financial statement in Q1/2009 was Baht 31.5 million which decreasing by Baht 10.6 million or 25.2% when compared to that of the last year. Mainly comprised of interest payment for long term loan and interest payment for financial lease of BAFS at amounted of Baht 22.3 million. Besides that of these items was TARCO's and JP-One's which were Baht 7.9 million and Baht 1.3 million respectively. 1.3 Operating Results Net profit for Q1/2009 of BAFS and its subsidiaries was Baht 108.0 million decreasing by Baht 32.8 million or 23.3% from last year of Baht 140.8 million which is equivalent an earning per share of Baht 0.21, as a result of various factors as discussed above. Q1/2009 Net profit of BAFS's Separate Financial Statement was sharply increased by Baht 76.7 million or 70.7% from last year to Baht 130.9 million. As a consequence of early recognized TARCO's dividend when compare to Q1/2008 that was recognized on April 08 (Q2/2008). However, from dividend mismatched recognition on Separate Financial Statement didn't affected to the Company's Consolidated Financial Statement. 2. Report and Analysis of Financial Status 2.1 Assets As at March 31, 2009 the Company's group had total assets in the amount of Baht 7,047.2 million, decreased by Baht 13.5 million or 0.2% from December 31, 2008. The important details are as follows: 2.1.1 Cash, cash equivalent and short term investment of the Company's group is Baht 619.5 million. The details of important sources and uses of cash and short term investment are as follows: - The Company's group had cash flow from operations of Baht 245.8 million from consolidated net profit of Q1/2009 of Baht 114.5 million adjusted with cash inflow items such as depreciation and amortization of Baht 92.3 million, allowance for retirement benefit of Baht 22.4 million, amortization of concession of subsidiary of Baht 6.9 million, unrealized FX loss of Baht 0.5 million and increased in other current liabilities of Baht 26.3 million. - Cash outflow items comprised of allowance for bad debts of Baht 2.5 million, increased in account receivable and other current assets of Baht 37.4 and Baht 4.9 million. - Cash flow used in investment was Baht 2.7 million which was purchased in other asset and equipment at amount of Baht 7.4 million, decreased in short term investments and loan to related company by Baht 2.5 million and decreased in received interest Baht 2.4 million. - Cash flow used in financing was Baht 197.4 million which was long term loan principle payment at the amount of Baht 155.4 million and interest payment was of Baht 39.5 million 2.1.2 Property, leasehold improvement and equipment at March 31, 2009 was Baht 5,319.3 million comprised of TARCO's and JP-One's property, leasehold improvement and equipment of Baht 1,618.5 million and 641.8 million, respectively. 2.1.3 Concession of subsidiary was incurred from the acquisition of TARCO's shares at the price higher than its book value up to present this concession was Baht 703.8 million. 2.1.4 Right of use of land leased by a subsidiary was incurred from the acquisition of JP- One's shares at the price higher than its book value up to present this item was Baht 0.04 million 2.2 Liabilities As at March 31, 2009, the Company's group had total liabilities of Baht 3,950.1 million, decreased by Baht 119.7 million or 2.9% compared from December 31, 2008 and resulted in debt to equity ratio of 1.28 : 1 time. Liabilities comprised of major items as follows: 2.2.1 Account payable of Baht 57.5 million which comprised of account payable - related company's group of Baht 49.6 million and others account payable of Baht 7.8 million. 2.2.2 Portion of long term loan which to be paid of Baht 535.0 million which are comprised of long term loan which to be paid for BAFS of Baht 316.6 million, TARCO's long term loan which to be paid of Baht 194.4 million and JP-One's long term loan which to be paid of Baht 24.0 million. Besides that the financial lease which to be paid in one year was Baht 11.7 million which was belonging to BAFS Baht 8.6 million, TARCO's Baht 2.3 million and JP-One's Baht 0.7 million 2.2.3 Other current liabilities of Baht 125.9 million which comprised of major items such as accrued corporate income tax of Baht 69.3 million and others of current liabilities of Baht 43.2 million. 2.2.4 Long term loan from bank of Baht 2,932.0 million decreased by Baht 170.4 million or 5.5% compared to ending of last year which comprised of : - The first portion of Baht 406.3 million was long term loan from KBANK which was semi-annual, principle repayment : Baht 50.8 million/period and will be due in 2014. - The second portion of Baht 1,535.0 million was long term loan from BBL which was quarterly, principle repayment : Baht 50.0 million/period and will be due in 2014. - The third portion of Baht 220.0 million was long term loan from NFS which was quarterly, principle repayment : Baht 6.3 million/period and the rest principle will be paid in last period which will be due in 2015. That first principle payment will be on March,2011. - The third portion was TARCO's loan of Baht 704.6 million from BBL which comprised of USD loan that TARCO already swap to Baht 149.6 million and THB baht loan of 555.0 million which was quarterly principle repayment and will be due in 2012. - The remaining portion was JP-One loan at amount of Baht 66.0 million from BBL which was monthly principle repayment and will be due in 2012. 2.3 Shareholders' Equity As at March 31, 2009, shareholders' equity of the Company's group was Baht 3,097.0 million, increasing from last year by Baht 106.2 million or 3.5%. 3. Major factors that may affect operating performance or financial status 3.1 The Company's group has contingent liability from providing a bank guarantee to TARCO for outstanding amount from total long term loan of Baht 899.0 million. (including portion to be paid in one year) TARCO had net profit in Q1/2009 of Baht 63.5 million which was net profit margin at 46.0%. Resulting from services income of Baht 138.1 million, cost of services and administrative expenses of Baht 26.9 million and Baht 10.4 million respectively. Moreover, the Company has contingent liability from providing a bank guarantee to JP-One for a proportion of 50.0% of outstanding amount from total long term loan since established which up to present the amount is Baht 45.0 million (including portion to be paid in one year) JP-One had net profit in Q1/2009 of Baht 2.0 million and has net profit margin at 9.2%. Resulting from services income of Baht 22.2 million compared with cost of services and administrative expenses was of Baht 15.7 million and Baht 3.3 million respectively. Please be informed accordingly. Yours sincerely, (M.R. Supadis Diskul) Managing Director Legal and Securities Division Tel 0-2834-8914 Fax 0-2834-8920