ข่าวแจ้งตลาดหลักทรัพย์

No. MD.089/2007 May 9, 2007 Re: Management Discussion and Analysis For the Three Month Period Operating Results ended March 31, 2007 To: President The Stock Exchange of Thailand Management Discussion and Analysis For the Three Month Period Operating Results ended March 31, 2007 1. Report and Analysis of the Operating Results For the three months period ended 31 March 2007, the Company and subsidiaries have earned a consolidated net income of Baht 162.6 million as compared to net income of Baht 127.01 million earned during the same period in 2006 which is increasing by 28%. The main reasons for changes are as follows: 1.1 Revenue 1.1.1 Services Income In Q1/2007, services income of the consolidated financial statement of company was Baht 565.03 million, increasing by Baht 270 million or 92% compared to that of the last year. There are major factors influent the increasing in services income of company by 25% which are increasing in volume of fuel serviced by 7% to 1,167.7 million litres and the increased in refueling fee in Suvarnabhumi Airport and Donmung Airport. Moreover, in this quarter, TARCO and JP-One have services income at Baht 163.45 million and Baht 27.48 million respectively. 1.1.2 Rental Income The rental income of the consolidated financial statement of company was Baht 3.1 million for this quarter which comprised of office and pipeline receiving system rental to Fuel Pipeline Transportation Limited (FPT) of Baht 1.76 million and land and utilities system rental to Thai Petroleum Pipeline Co., Ltd. (THAPPLINE) of Baht 1.35 million. The rental income decreased Baht 6.9 million or 69% from last year. The decrease in rental income was due to the decrease in pipeline receiving system rental to FPT. 1.1.3 Other Income Other income of the consolidated financial statement of company was Baht 21.2 million, decreasing by Baht 4.8 million compared to that of the last year. Mostly comprised of interest income from short term investment of Baht 5.9 million, guarantee fee from TARCO at rate of 1% of TARCO's outstanding loan of Baht 3 million and gain from exchange rate of TARCO of Baht 11.9 million. 1.2 Expenses 1.2.1 Cost of Services For the consolidated financial statement of company in Q1/2007, cost of services was Baht 220.69 million, increasing by Baht 119.6 million or 118% compared to that of the last year. Major items in cost of services are a) increasing in refueling concession fee charged at Suvarnabhumi Airport from Airports of Thailand Plc. (AOT) at rate of Baht 0.06 per liter which would be varies by volume of fuel services of Baht 63.7 million b) increasing in depreciation at Suvarnabhumi Airport of Baht 33.9 million. Besides, there were cost of services of TARCO and JP-One of Baht 21.9 million and Baht 14.3 million respectively.Although, pipeline rental charge from AOT for this quarter decreasing by Baht 18.7 million. 1.2.2 Administrative Expenses Administrative expenses for the consolidated financial statement of company in Q1/2007 was Baht 61.74 million, increasing by Baht 13.6 million or 28% compared to that of the last year. Which are comprised of increasing in administrative expenses of company of Baht 9 million related from increasing in employee expense of Baht 5.3 million and increasing in depreciation of Baht 3.6 million. Moreover, the administrative expenses of TARCO and JP-One of Baht 8.6 million and Baht 2.4 million respectively. 1.2.3 Interest Expenses The interest expenses for the consolidated financial statement of company in Q1/2007 was Baht 53.57 million which increasing by Baht 44.2 million when compared to that of the last year. Mainly comprised of interest payment for long term loan of the company amounted to Baht 34.7 million and interest payment for financial lease amounted to Baht 0.36 million. Besides that the interest payment of long term loan of TARCO and JP-One are Baht 16.86 million and Baht 1.6 million respectively. 1.3 Operating Results Net profit for the three months period ended 31 March 2007, the Company and subsidiaries was Baht 162.6 million which is equivalent an earning per share of Baht 0.38, increasing by Baht 35.5 million or 28% from the same period of last year of Baht 127 million as a result of various factors as discussed above. For the company only, net profit was Baht 84.8 million. Which the different in net profit in consolidated financial statement and net profit of company only is related from changing in accounting policies for the record of investment in company's subsidiaries. 2. Report and Analysis of Financial Status 2.1 Assets As at March 31, 2007 the Company and its subsidiaries had total assets in the amount of Baht 7,527 million, increased by Baht 18.4 million or 0.2% from that of last year. The important details are as follows: 2.1.1 Cash and cash equivalent and short term investment increased from Baht 604.3 million in December 31, 2006 to Baht 701.86 million in 1Q2007 or increasing by Baht 97.5 million. The details of important sources and uses of cash and short term investment are as follows: - The Company and its subsidiaries had cash flow from operations of Baht 270.5 million from consolidated net profit of Baht 162.6 million adjusted with cash inflow items such as depreciation of Baht 74.96 million, retirement benefit of Baht 14.4 million, Goodwill amortization of Baht 6.3 million, decrease in account receivable and other current asset of Baht 4 million and 20.1 million respectively. And increased in other current liabilities of Baht 34.4 million. Cash outflow items comprised of reversal of unrealized gain from exchange rate of Baht 49.8 million, allowance for doubtful debt of Baht 2.61 million, decrease in account payable of Baht 8.9 million. - Cash flow from investment was Baht 119.7 million mainly comprised of investment in property, leasehold improvement and equipment of Baht 122.3 million and decrease in loan to and long-term receivable from related company of Baht 2.6 million. - Cash flow from financing was Baht 53.3 million. The Company had decreased in long term loan of Baht 51.5 million and decrease in financial lease of Baht 1.8 million. 2.1.2 Property, leasehold improvement and equipment was Baht 5,724.1 million comprised of the Company's property, leasehold improvement and equipment of Baht 3,349.7 million and TARCO's and JP-One's of Baht 1,688.4 million and 685.9 million, respectively. 2.1.3 Goodwill was incurred from the acquisition of TARCO's shares at the price higher than its book value in August 2003. The goodwill was recorded at Baht 768.01 million and will be amortized along with the concession period for 30 years starting from the opening of Suvarnabhumi Airport. Up to March 31, 2007 the goodwill was Baht 755 million. 2.2 Liabilities As at March 31, 2007, the Company and its subsidiaries had total liabilities of Baht 4,684.6 million, decreased Baht 157.6 million or 3.3% compared to that of last year resulted in debt to equity ratio of 1.65 : 1 time. Liabilities comprised of major items as follows: 2.2.1 Account payable of Baht 38.7 million which comprised of account payable- related company of Baht 33.3 million which mainly was refueling airport concession fee and account payable-others of Baht 5.3 million. 2.2.2 Portion of long term loan which to be paid of Baht 300.8 million which are comprised of long term loan which to be paid for the company of Baht 227.78 million, TARCO's long term loan which to be paid of Baht 49.1 million and JP-One's long term loan which to be paid of Baht 24 million. Besides that the financial lease which to be paid in one year was Baht 8.9 million. 2.2.3 Other current liabilities of Baht 172.1 million which comprised of major items such as accrued corporate income tax of Baht 103 million, other account payable of Baht 20.4 million and others of Baht 48.6 million which mainly were account payable from construction of the Company and its subsidiaries. 2.2.4 Retention was Baht 280.2 million, comprised of the Company's retention of Baht 171.9 million, TARCO's retention of Baht 83.96 million and JP-One's retention of Baht 24.4 million. 2.2.5 Long term loan from bank of Baht 3,681.36 million comprised of : - The first portion of Baht 533.33 million was long term loan from KBANK with 7 years time to maturity starting from 2004, interest rate of 4.65% fixed, and 3 years grace period. - The second portion of Baht 1,950 million was long term loan from BBL used to finance Depot and Into-plane projects with 10 years time to maturity starting from 2004, interest rate of 3-month FDR +1.25% and 3 years grace period. - The third portion was TARCO's loan for construction of Hydrant of Baht 1,102.03 million from BBL with a total credit amount of USD 8 million at the rate of Libor+1.75% and Baht 700 million at the rate of 3- month Fixed Deposit Rate +1.75%. The loan has 10 years time to maturity starting from 2002 and a grace period of 5 years. Moreover, TARCO had additional loan of Baht 170 million from BBL with the interest rate of MLR-2.50%. The interest rate will increase 0.25% every 6 month from contract date on May 2, 2006 until reach MLR-1.5%. A grace period is 4 years and the loan has approximately 8 years time to maturity. - The remaining portion was JP-One loan for construction of Pipeline transportation from Mukkasan to Suvarnabhumi Airport of Baht 96 million from BBL with a total long term credit facility of Baht 120 million at the rate of MLR-2.50%. The interest rate will increase 0.25% every 6 month from contract date on December 1, 2005 until reach MLR-1%. A grace period is up to December 30, 2007 and the loan has approximately 7 years time to maturity. 2.3 Shareholders' Equity As at March 31, 2007, shareholders' equity was Baht 2,842.4 million, increasing from last year by Baht 176 million or 6.6%. 3. Major factors that may affect operating performance or financial status The Company has contingent liability from providing a bank guarantee to TARCO for a total loan of Baht 870 million and USD 8 million and interest as well as other expenses incurred by a lender to force TARCO to pay its liability. The liability will incur to the Company only for the remaining amount not covered by the liquidation of TARCO's property, when TARCO has defaulted the loan agreement and has been charged and forced to sell its property by auction. TARCO had net profit in the first quarter of 2007 of Baht 88.31 million which was net profit margin at 54%. Resulting from services income of Baht 163.5 million, cost of services and administrative expenses of Baht 27.7 million and unrealized gain from exchange rate of Baht 10.1 million. The Company has contingent liability from providing a bank guarantee to JP-One for a proportion of 50% of outstanding amount from total long term loan. JP-One had net profit in the first quarter of 2007 of Baht 9 million which was net profit margin at 34%. Resulting from services income of Baht 27.10 million, cost of services and administrative expenses of Baht 16.50 million. Please be informed accordingly. Yours sincerely, (M.R. Supadis Diskul) Managing Director Legal and Securities Division Tel 02-565-3811-8 ext.373