SET Announcements

MD. /2009 November 10, 2009 Re: Management Discussion and Analysis For the Three Months Period Operating Results ended September 30, 2009 To: President The Stock Exchange of Thailand Management Discussion and Analysis For the Three Months Period Operating Results ended June 30, 2009 1. Report and Analysis of the Operating Results Although total revenues of BAFS and subsidiaries was affected from global recession, political turmoil in the country and the Pandemic (H1N1) 2009 flu, but from the exertion of Cost Reduction Program of management team and every level of employee such as volunteer cutting salary 5%-20% of management, reduction in cost of living and fringe benefit of staffs, lessen overtime rate etc. brought the results of operations of three months period ended September 30, net profit was Baht 134.8 million as compared to net income of Baht 129.5 million of the same period in last year which was only increasing by Baht 5.3 million or 4.1% and increased by Baht 11.5 million from last quarter or 9.4% increased (q-o-q). The main reasons for changes are as follows: 1.1 Revenue For the three months period ended September 30, 2009, total revenues of BAFS and its subsidiaries amounted to Baht 497.7 million, an decrease of Baht 15.0 million or 2.9% 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 489.0 million, an decrease of Baht 10.8 million or 2.2% 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 3.2% (y-o-y) to 1,008.3 million litres from 1,041.9 million litres of last year. 1.1.2 Other Income 1.1.2.1 Rental Income The rental income of the consolidated financial statement of company's group in Q3/2009 was Baht 3.7 million, decreasing by Baht 1.0 million or 21.0% compared to that of the last year. 1.1.2.2 Other Income Other income of the consolidated financial statement of company's group was Baht 5.0 million, decreasing by Baht 3.2 million or 39.2% compared to that of the last year. Which FX loss was decreased by Baht 0.2 million as result of Thai Baht appreciated against US$ from 34.04 Bt./US$ in Q2/09 to 34.01 Bt./US$. 1.2 Expenses 1.2.1 Cost of Services For the consolidated financial statement of company's group in Q3/2009, Cost of services was Baht 212.1 million, decreased by Baht 7.0 million or 3.2% compared to that of the last year. Major items which decreased cost of services are 1) decreasing in salaries and other employee's expense of Baht 5.3 million 2) decreasing in maintenance expense by Baht 1.7 million 3) decreasing in Air port Concession Fee by Baht 0.4 million that was in line with dropping of volume. But depreciation and amortization expense was increased by Baht 1.4 million. 1.2.2 Administrative Expenses Administrative expenses for the consolidated financial statement in Q3/2009, was Baht 48.5 million, decreasing by Baht 10.0 million or 17.1% compared to that of the last year which mainly came from the success in Cost Reduction Program of company. Major items which decreased administrative expenses are 1) decreasing in salaries and other employee's expense of Baht 4.4 million, decreasing in computer and equipment expense by Baht 1.2 million and depreciation and amortization expense was decreased by Baht 0.2 million. 1.2.3 Finance Costs Finance Costs for the consolidated financial statement in Q3/2009 was Baht 25.4 million which decreasing by Baht 15.7 million or 38.3% when compared to that of the last year as decreasing in market rate. Mainly comprised of interest payment for long term loan and interest payment for financial lease of BAFS at amounted of Baht 18.2 million. Besides that of these items was TARCO's and JP-One's Finance Costs. 1.3 Operating Results Net profit for Q3/2009 of BAFS and its subsidiaries was Baht 134.8 million increasing by Baht 5.3 million or 4.1% from last year of Baht 129.5 million which is equivalent an earning per share of Baht 0.26, as a result of various factors as discussed above. 2. Report and Analysis of Financial Status 2.1 Assets As at September 30, 2009 the Company's group had total assets in the amount of Baht 6,784.7 million, decreased by Baht 143.5 million or 2.1% from June 30, 2009. The important details are as follows: 2.1.1 Cash, cash equivalent and short term investment of the Company's group is Baht 665.1 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 211.8 million from consolidated net profit before minority interest of Q3/2009 of Baht 141.7 million adjusted with cash inflow items such as depreciation and amortization of Baht 91.6 million, amortization of concession of subsidiary of Baht 7.1 million, decreased in other current asset by Baht 8.8 million. And increased in other current liabilities of Baht 15.7 million. - Cash outflow items comprised of reversal allowance for bad debts of Baht 3.8 million, allowance for retirement benefit of Baht 1.7 million, Unrealized FX gain of Baht 0.3 million, increased in account receivable of Baht 10.4 million, decreased in account payable of Baht 33.2 million and payment for income tax of Baht 79.8 million. - Cash flow used in investment was Baht 1.2 million which was decreased in short term investments and loan to related company by Baht 3.8 million, interest received of Baht 2.6 million, purchased in other asset and equipment at amount of Baht 5.3 million. Besides that in this quarter for the Separate Financial Statement of BAFS has received dividend from the 1st half of 2009 of TARCO's operation at amount of Baht 58.0 million - Cash flow used in financing was Baht 263.7 million which was dividend payment for 1H/2009 of the company at the amount of Baht 66.3 million, long term loan principle payment and financial lease at the amount of Baht 158.1 million and interest payment was of Baht 32.9 million respectively. 2.1.2 Property, leasehold improvement and equipment at September 30, 2009 was Baht 5,147.8 million decreased by Baht 84.6 million or 1.6% from June 30, 2009 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 691.0 million. 2.2 Liabilities As at September 30, 2009, the Company's group had total liabilities of Baht 3,616.3 million, decreased by Baht 212.5 million or 5.5% compared from June 30, 2009 and resulted in debt to equity ratio of 1.14 : 1 time. Liabilities comprised of major items as follows: 2.2.1 Account payable of Baht 44.9 million which comprised of account payable - related company's group of Baht 33.0 million and others account payable of Baht 11.9 million. 2.2.2 Portion of long term loan which to be paid of Baht 621.3 million which are comprised of long term loan which to be paid for BAFS of Baht 346.6 million, TARCO's long term loan which to be paid of Baht 250.7 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 12.5 million which was belonging to BAFS Baht 9.4 million, TARCO's Baht 2.4 million and JP-One's Baht 0.8 million 2.2.3 Other current liabilities of Baht 81.7 million which comprised of major items such as accrued corporate income tax of Baht 32.8 million and others of current liabilities of Baht 48.9 million. 2.2.4 Long term loan from bank of Baht 2,585.7 million decreased by Baht 226.7 million or 8.1% compared to June 30, 2009 which comprised of : - The first portion of Baht 355.6 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 1,405.0 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 forth portion was TARCO's loan of Baht 551.2 million from BBL which comprised of USD loan that TARCO already swap to Baht 122.4 million and THB baht loan of 428.8 million which was quarterly principle repayment and will be due in 2012. - The remaining portion was JP-One loan at amount of Baht 54.0 million from BBL which was monthly principle repayment and will be due in 2012. 2.3 Shareholders' Equity As at September 30, 2009, shareholders' equity of the Company's group was Baht 3,168.4 million, increasing from June 30, 2009 by Baht 69.0 million or 2.2%. 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 801.9 million. (including portion to be paid in one year) 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 39.0 million (including portion to be paid in one year) Please be informed accordingly. Yours sincerely, (M.R.Supadis Diskul) Managing Director Legal and Securities Division Tel 0-2834-8914