SET Announcements

MD.127/2010 August 11, 2010 Re: Management Discussion and Analysis For the Operating Results ended June 30, 2010 To: President The Stock Exchange of Thailand Management Discussion and Analysis For the Three Months Period Operating Results ended June 30, 2010 1. Report and Analysis of the Operating Results In Q2/2010, volume of BAFS and subsidiaries was increased by 2.4% (y-o-y) to 996 million litres compared with that of Q2/2009 which was 973 million litres while the growth of total flights services of group was 2.4% (y-o-y) to 35,327 flights from 34,485 flights. For this reason, total revenues of BAFS and subsidiaries was increased by Baht 39.7 million or 8.2% (y-o-y) to Baht 522.0 million from Baht 482.3 million. Moreover, net profit in Q2/2010 was increased by Baht 23.5 million to Baht 146.7 million or 19.1 (y-o-y) from Baht 123.3 million which earning per share of this quarter was equal Baht 0.29. 1.1 Revenue For Q2/2010, total revenues of BAFS and its subsidiaries was amounted to Baht 522.0 million which details are following, 1.1.1 Services Income Services income of BAFS and its subsidiaries amounted to Baht 512.4 million, an increased of Baht 40.0 million or 8.5% (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 Q2/2010, was Baht 4.1 million, decreasing by Baht 0.1 million or 3.0% (y-o-y). 1.1.2.2 Other Income Other income was Baht 5.5 million, decreased by Baht 0.1 million or 2.5% (y-o-y) which major factor came from the decreasing of principal repayment as specified in the repayment schedule of debt restructuring and principal prepayment received from FPT of Baht 1.3 million. 1.2 Expenses 1.2.1 Cost of Services In Q2/2010, Cost of services was Baht 215.8 million, increased by Baht 10.2 million or 5.0% (y-o-y). Major items which increased cost of services are 1) increased in salaries and other employee's expense of Baht 8.3 million 2) increased in Air port Concession Fee by Baht 0.9 million that was in line with the raising of volume and 3) increased in maintenance expense by Baht 2.5 million. 1.2.2 Administrative Expenses Administrative expenses in Q2/2010, was Baht 67.2 million, decreased by Baht 1.6 million or 2.3% (y-o-y) which mainly came from decreasing in real estate tax of Baht 7.1 million although salaries and other employee's expense was increased by Baht 4.1 million. Moreover in this quarter, management benefit expenses was decreased by Baht 3.6 million. In this quarter depreciation and amortization expense was Baht 96.3 million, decreased by Baht 1.2 million when compared with Q2/2009. 1.2.3 Finance Costs Finance Costs in Q2/2010 was Baht 21.6 million which decreasing by Baht 4.5 million or 17.3% (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 15.9 million. Besides that of these items were TARCO's and JP-One's finance costs which were amounted of Baht 4.9 million and Baht 0.8 million respectively. 1.3 Operating Results For Q2/2010, Net profit of BAFS and its subsidiaries amounted to Baht 146.7 million, a increase of Baht 23.5 million or 19.1% (y-o-y) which is equivalent an earning per share of Baht 0.29 when compared with Baht 123.3 million of Q2/2009. 2. Report and Analysis of Financial Status 2.1 Assets As at June 30, 2010 the Company's group had total assets in the amount of Baht 6,629.3 million, decreased by Baht 0.2 million or 3.1% 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 772.4 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 265.6 million from consolidated net profit before minority interest of Q2/2010 of Baht 153.7 million adjusted with cash inflow items such as depreciation and amortization of Baht 89.3 million, amortization of concession of subsidiary of Baht 7.0 million, increase in reserve for employees' benefit of Baht 1.2 million, decreased in account receivable of Baht 22.6 million and unrealized loss on exchange rate of Baht 0.6 million. - Cash outflow items comprised of decreased in other current liabilities of Baht 9.5 million. - Net Cash outflow from investment was Baht 0.6 million which was decreased in short term investments and loan to related company by Baht 4.3 million, interest received of Baht 3.2 million, purchased in other asset and equipment at amount of Baht 7.1 million. - Net Cash flow used in financing was Baht 317.8 million which was long term loan principle payment and financial lease at the amount of Baht 140.8 million, interest payment was of Baht 16.0 million and dividend payment for the 2nd of 2009 of Baht 153.0 million 2.1.2 Property, leasehold improvement and equipment at June 30, 2010 was Baht 4,899.7 million decreased by Baht 166.0 million or 3.3% 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 671.8 million. 2.2 Liabilities As at June 30, 2010, the Company's group had total liabilities of Baht 3,233.7 million, decreased by Baht 337.2million or 9.4% compared from December 31, 2009 and resulted in debt to equity ratio improved to 0.95 : 1 time from 1.09 : 1 time. Liabilities comprised of major items as follows: 2.2.1 Account payable of Baht 43.0 million which comprised of account payable - related company's group of Baht 30.2 million and others account payable of Baht 12.8 million. 2.2.2 Portion of long term loan which to be paid of Baht 667.5 million which are comprised of long term loan which to be paid for BAFS of Baht 374.1 million, TARCO's long term loan which to be paid of Baht 269.4 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 11.6 million which was belonging to BAFS Baht 7.7 million, TARCO's Baht 2.5 million and JP-One's Baht 1.4 million respectively. 2.2.3 Other current liabilities of Baht 117.6 million which comprised of major items such as accrued corporate income tax of Baht 73.8 million and others of current liabilities of Baht 43.7 million. 2.2.4 Long term loan from bank of Baht 2,107.4 million decreased by Baht 340.0 million or 13.9% 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 1,210.0 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 207.5 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 349.1 million from BBL which comprised of USD loan that TARCO already swap to Baht 81.6 million and THB baht loan of 267.5 million which was quarterly principle repayment and will be due in 2012. - The remaining portion was JP-One loan at amount of Baht 36.0 million from BBL which was monthly principle repayment and will be due in 2012. 2.3 Shareholders' Equity As at June 30, 2010, shareholders' equity of the Company's group was Baht 3,395.6 million, increasing from December 31, 2009 by Baht 123.0 million or 3.8%. 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 618.6 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 30.0 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