SET Announcements

MD.088/2010 May 13, 2010 Re: Management Discussion and Analysis For the Operating Results ended March 31, 2010 To: President The Stock Exchange of Thailand Management Discussion and Analysis For the Three Months Period Operating Results ended March 31, 2010 1. Report and Analysis of the Operating Results Although domestic political turmoil effected to volume of fuel services, however in Q1/2010, volume of BAFS and subsidiaries was increased by 9.1% (y-o-y) to 1,130 million litres compared with that of Q1/2009 which was 1,036 million litres while the growth of total flights services of group was 9.9% (y-o-y) to 38,362 flights from 34,922 flights. For this reason, total revenues of BAFS and subsidiaries was increased by Baht 44.1 million or 8.6% (y-o-y) to Baht 554.6 million from Baht 510.5 million. Moreover, net profit in Q1/2010 was increased by Baht 15.4 million to Baht 123.4 million or 14.2% (y-o-y) from Baht 108.0 million which earning per share of this quarter was equal Baht 0.24. 1.1 Revenue For Q1/2010, total revenues of BAFS and its subsidiaries was amounted to Baht 554.6 million which details are following, 1.1.1 Services Income Services income of BAFS and its subsidiaries amounted to Baht 544.7 million, an increased of Baht 41.7 million or 8.3% (y-o-y) consistency with the expansion of fuel services volume. 1.1.2 Other Income 1.1.2.1 Rental Income The rental income in Q1/2010, was Baht 4.2 million, decreasing by Baht 0.5 million or 10.8% (y-o-y). 1.1.2.2 Other Income Other income was Baht 5.7 million, increased by Baht 2.9 million or 103.1% (y-o-y) which major factor came from the incremental of principal repayment as specified in the repayment schedule of debt restructuring and principal prepayment received from FPT of Baht 2.1 million. 1.2 Expenses 1.2.1 Cost of Services In Q1/2010, Cost of services was Baht 237.1 million, increased by Baht 15.3 million or 6.9% (y-o-y). Major items which increased cost of services are 1) increased in salaries and other employee's expense of Baht 8.9 million 2) increased in Air port Concession Fee by Baht 7.4 million that was in line with the raising of volume and 3) increased in maintenance expense by Baht 1.9 million, however depreciation and amortization expense and insurance premium was decreased by Baht 1.9 million and Baht 0.3 million respectively. 1.2.2 Administrative Expenses Administrative expenses in Q1/2010, was Baht 98.6 million, increased by Baht 15.0 million or 18.0% (y-o-y) which mainly came from 1) increased in real estate tax of Baht 6.9 million 2) increased in salaries and other employee's expense of Baht 6.8 million and 3) increased in maintenance expense of Baht 0.5 million, however, depreciation and amortization expense was decreased by Baht 2.4 million. Moreover in this quarter, management benefit expenses was decreased by Baht 0.9 million. 1.2.3 Finance Costs Finance Costs in Q1/2010 was Baht 22.9 million which decreasing by Baht 8.6 million or 27.3% (y-o-y) as diminishing in long term loan of the companies group which comply by debts payment schedule. Mainly comprised of interest payment for long term loan and interest payment for financial lease of BAFS at amounted of Baht 16.6 million. Besides that of these items were TARCO's and JP-One's finance costs which were amounted of Baht 5.4 million and Baht 0.9 million respectively. 1.3 Operating Results For Q1/2010, Net profit of BAFS and its subsidiaries amounted to Baht 123.4 million, a increase of Baht 15.4 million or 14.2% (y-o-y) which is equivalent an earning per share of Baht 0.24 when compared with Baht 108.0 million of Q1/2009. 2. Report and Analysis of Financial Status 2.1 Assets As at March 31, 2010 the Company's group had total assets in the amount of Baht 6,797.6 million, decreased by Baht 46.0 million or 0.7% from December 31, 2009. The important details are as follows: 2.1.1 Cash, cash equivalent and short term investment of the Company's group is Baht 824.4 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 271.3 million from consolidated net profit before minority interest of Q1/2010 of Baht 131.3 million adjusted with cash inflow items such as depreciation and amortization of Baht 88.3 million, amortization of concession of subsidiary of Baht 6.9 million,increase in reserve for employees' benefit of Baht 23.8 million, decreased in other current assets of Baht 7.6 million and unrealized loss on exchange rate of Baht 0.05 million. - Cash outflow items comprised of reversal allowance for bad debts of Baht 4.6 million and decreased in other current liabilities of Baht 38.8 million. - Net Cash inflow from investment was Baht 6.3 million which was decreased in short term investments and loan to related company by Baht 4.6 million, interest received of Baht 2.7 million, purchased in other asset and equipment at amount of Baht 1.6 million. - Net Cash flow used in financing was Baht 222.0 million which was long term loan principle payment and financial lease at the amount of Baht 191.6 million, interest payment was of Baht 29.4 million and dividend payment from subsidiaries to minority interest of Baht 1.0 million 2.1.2 Property, leasehold improvement and equipment at March 31, 2010 was Baht 4,980.1 million decreased by Baht 85.6 million or 1.7% from December 31, 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 678.2 million. 2.2 Liabilities As at March 31, 2010, the Company's group had total liabilities of Baht 3,402.7 million, decreased by Baht 168.2 million or 4.7% compared from December 31, 2009 and resulted in debt to equity ratio improved to 1.00 : 1 time from 1.09 : 1 time. Liabilities comprised of major items as follows: 2.2.1 Account payable of Baht 42.4 million which comprised of account payable - related company's group of Baht 32.6 million and others account payable of Baht 9.8 million. 2.2.2 Portion of long term loan which to be paid of Baht 661.3 million which are comprised of long term loan which to be paid for BAFS of Baht 367.8 million, TARCO's long term loan which to be paid of Baht 269.5 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 13.6 million which was belonging to BAFS Baht 8.9 million, TARCO's Baht 3.1 million and JP-One's Baht 1.6 million respectively. 2.2.3 Other current liabilities of Baht 147.4 million which comprised of major items such as accrued corporate income tax of Baht 92.6 million and others of current liabilities of Baht 54.8 million. 2.2.4 Long term loan from bank of Baht 2,252.1 million decreased by Baht 195.4 million or 8.0% when compared December 31, 2009 which comprised of : - The first portion of Baht 304.8 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 1,275.0 million was long term loan from BBL which was quarterly step up principle repayment which is Baht 65.0 million/period in this year and will be due in 2014. - The third portion of Baht 213.8 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 416.6 million from BBL which comprised of USD loan that TARCO already swap to Baht 95.3 million and THB baht loan of 321.3 million which was quarterly principle repayment and will be due in 2012. - The remaining portion was JP-One loan at amount of Baht 42.0 million from BBL which was monthly principle repayment and will be due in 2012. 2.3 Shareholders' Equity As at March 31, 2010, shareholders' equity of the Company's group was Baht 3,394.9 million, increasing from December 31, 2009 by Baht 122.3 million or 3.7%. 3. Major factors that may affect operating performance or financial status The Company's group has contingent liability from providing a bank guarantee to TARCO for outstanding amount from total long term loan of Baht 686.0 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 33.0 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 Fax 0-2834-8920