Management Discussion and Analysis for the three-month period ended December 31st, 2006 and 2005 for Airports of Thailand Public Company Limited and its subsidiaries
1.Operating results of Airports of Thailand Public Company Limited and its subsidiaries (AOT) for the 1st Quarter of 2007, (October 1st ,2006- December 31st , 2006), AOT has operating revenues of Baht 4,991.75 million, a year-on-year increase of Baht 985.16 million, or a 24.59 % rise comprising of an increase in aeronautical revenue of Baht 216.73 million, or a 8.59 % rise due to an increase of aircraft, passenger and cargo movements of 8.15%, 12.53% and 3.31% accordingly. Moreover, the aircraft and passenger movements of LCCs have increased 33.2% and 33.1% respectively. An increase in non-aeronautical revenue of Baht 587.62 million, or a 39.58% rise and also the Suvarnabhumi Airport Hotel's operating revenue ( Started operating on September 10th , 2006), our subsidiary, of Baht 180.81 million.
The operating expenses have increased Baht 2,353.82 million, a year-on-year increase of 146.97 % due to the initial operations of Suvarnabhumi Airport on September 28th, 2006. An increase of the areas leads to an increasing numbers of outsources workers and also the electricity, water, repair and maintenance, depreciation and hotel operating revenue. The profit before income tax expenses, after adjusting the foreign exchange gain, interest expenses and other income, is recorded at Baht 1,813.38 million, a year-on-year decrease of Baht 2,180.17 million, or a 54.59% drop.
The comparison between key operating results of the 1st Quarter of fiscal year 2007 and 2006 is as follows:
Unit: Million (Baht) 2006 2005 Increase(Decrease) %changes Operating revenues 4,991.75 4,006.59 985.16 24.59 Aeronautical revenue 2,738.52 2,521.79 216.73 8.59 Non- aeronautical revenue 2,072.42 1,484.80 587.62 39.58 Hotel operating revenue 180.81 - 180.81 100.00 Operating Expenses 3,955.43 1,601.61 2,353.82 146.97 Operating Income 1,036.32 2,404.98 (1,368.66) (56.91) Gain(Loss)on foreign exchange 1,098.46 1,263.52 (165.06) (13.06) Earning before income tax 1,813.38 3,993.55 (2,180.17) (54.59) Net profit 1,363.18 3,299.47 (1,936.29) (58.68) Basic earnings per share (Baht) 0.95 2.31
Aeronautical Revenues AOT has aeronautical revenues of Baht 2,738.52 million, a year-on-year increase of Baht 216.73 million, or an 8.59 % rise. The increase is attributable to:
- Landing and Parking Charges of Baht 948.31 million, a year-on-year increase of Baht 61.11 million or a 6.89 % rise
- Passenger Service Charges of Baht 1,683.72 million, a year-on-year increase of Baht 127.12 million or a 8.17 % rise
- Aircraft Service Charges of Baht 106.49 million, a year-on-year increase of 28.50 million or a 36.54 % rise
Non-aeronautical Revenues AOT has non-aeronautical revenues of Baht 2,253.22 million, a year-on-year increase of Baht 768.41 million or a 51.75 % rise. The increase is attributable to:
- Office and State Property Rental of Baht 365.44 million, a year-on-year increase of Baht 123.95 million or a 51.33 % rise
- Service Revenues of Baht 655.25 million, a year-on-year increase of Baht 446.14 million or a 213.35 % rise. The increase is comprised of the revenue from the public transportation center at Suvarnabhumi airport with a year-on-year increase of Baht 265.34 million or a 126.89 % rise and also the Novotel Suvarnabhumi Airport Hotel's operating revenues of Baht 180.81 million and others.
- Concession Revenues of Baht 1,232.53 million, a year-on-year increase of Baht 198.33 million or a 19.18 % rise
The Hotel-Related Operating Revenues (Including in the service revenues) The Novotel Suvarnabhumi Airport Hotel has the operating revenues for the 1st Quarter of 2007 of Baht 180.81 million comprising of the accommodation revenue of Baht 123.88 million, food and beverage revenues of Baht 47.84 million and other operating revenues of Baht 9.09 million.
The Operating Expenses AOT has total operating expenses of Baht 3,955.43 million, a year-on-year increase of Baht 2,353.82 million or a 146.97 % rise, which can be shown as follows:
- Personnel Expenses of Baht 568.24 million, a year-on-year increase of Baht 96.10 million or a 20.35 % rise due to an annual salary adjustment and the employment of new temporary workers.
- Operating Expenses of Baht 1,295.53 million, a year-on-year increase of Baht 724.87 million or a 127.02 % rise due to initial operations of Suvarnabhumi Airport on September 28th, 2006 which leads to an increase in the number of outsource workers such as security workers, waste-keeping and cleansing workers, car parking workers also a rise in electricity, water, insurance and any other operating expenses. The public transportation center's operating revenues such as Limousine rental fee including the driver and gas, the shuttle bus, the public transportation rental fee and etc. have also increased.
- Repair and Maintenance Expenses of Baht 145.14 million, a year-on-year increase of Baht 103.82 million or a 251.26 % rise due to the repair and maintenance expenses of elevators, escalators, moving sidewalks, baggage handling conveyors and also the repair expenses of runways and taxiways at the regional airports.
- State Property Rental of Baht 218.65 million, a year-on-year increase of Baht 35.24 million or a 19.21 % rise, which is risen in accordance with a rise in operating revenues
- Depreciation and Amortization of Baht 1,675.69 million, a year-on-year increase of Baht 1,341.61 million or a 401.58 % rise due to the depreciation of Suvarnabhumi Airport and the public transportation center for the 1st Quarter of 2007 of Baht 1,342.10 million.
- Suvarnabhumi Airport Hotel's operating expenses of Baht 159.97 million. Cost of sales and services of Baht 46.85 million. Selling and administrative expenses of Baht 60.94 million. Depreciation of Baht 52.18 million. (Some parts of the Suvarnabhumi Airport Hotel's operating expenses have been included in the personnel expenses and operating expenses)
Other income AOT has other income of Baht 1,365.55 million, a year-on-year decrease of Baht 223.02 million or a 14.04% drop due to an increase in interest income but a decrease in a gain on foreign exchange and any other income.
Interest Expenses AOT has interest expenses of Baht 588.49 million which comprise of the interest expenses from the loan for the Suvarnabhumi airport's construction of Baht 568.59 million and the interest expenses of Suvarnabhumi Airport Hotel of Baht 19.90 million.
2. The financial statements of Airports of Thailand Public Company Limited and its subsidiaries as at December 31st, 2006 compared with the end of fiscal year 2006 (September 30th, 2006)
AOT has total assets of Baht 145,656.42 million, a decrease from the end of fiscal year 2006 of Baht 4,848.64 million or a 3.22 % drop mainly from an investment in assets and operating expenses which lead to a decrease in cash and cash equivalents.
The assets comprise current assets and non-current assets, which account for 13.60 % and 86.40 % of total assets respectively. The assets can be elaborated in details as follows:
December 31st, 2006 September 30th,2005 Million(Baht) % of total assets Million(Baht) % of total assets Total current assets 19,813.93 13.60 23,539.06 15.64 Investments 517.94 0.36 567.60 0.38 Property, plant and equipment-net 112,928.52 77.53 114,077.98 75.80 Assets under construction 4,839.49 3.32 4,670.14 3.10 Intangible assets 2,732.78 1.88 2,803.74 1.86 Other non-current assets 4,823.76 3.31 4,846.54 3.22
AOT has total liabilities of Baht 73,245.66 million, a decrease of Baht 6,190.56 million or a 7.79 % drop, which comprise
December 31st, 2006 September 30th,2005 Million(Baht) % of total liabilities Million(Baht) % of total liabilities Current liabilities (including current portion of long-term loans) 8,768.08 11.97 13,993.24 17.62 Long-term loans 54,437.34 74.32 55,942.02 70.42 Concession revenue 3,619.86 4.94 4,439.13 5.59 Other non-current liabilities 6,420.38 8.77 5,061.83 6.37
Current liabilities (including current portion of long-term loans) has decreased from the end of fiscal year 2005 by Baht 5,225.16 million or a 37.34 % drop because of the payment to the account payable, accrued bonus and payment of interim dividend
Long-term loans have decreased from the end of fiscal year 2005 by Baht 1,504.68 million or a 2.69 % drop. Even though AOT has made an additional disbursement in the 1st Quarter of 2007, the appreciation of Thai Baht from Baht 32.0850 / 100 Yen as at the end of fiscal year 2006 to Baht 30.5787 / 100 Yen as at the end of 1st Quarter of 2007 is the main reason for a decrease in long-term loans.
Advance received concession revenues have decreased Baht 819.27 million or a 18.46 % drop due to the deduction of actual concession revenue. Non-current liabilities have increased from the end of fiscal year 2005 by Baht 1,358.55 million or a 26.84 % rise due to the application of financial derivative of Cross Currency Swap in order to reduce the risk of currency exchange.
Shareholder's equity as at December 31st, 2006 has increased by Baht 1,341.92 million, or a 1.89 % rise mainly due to a rise in net operating income.
For cash flow position as at December 31st, 2006, cash and cash equivalents totals Baht 15,918.51 million, a decrease from the beginning of fiscal year 2006 (October 1, 2005) of Baht 3,841.16 million or a year-on-year decrease of 19.44 %
In short, the details of the sources and uses of funds are as follows:
- Net cash received from operating activities accounts for Baht 1,467.11 million.
- Net cash payment for investing activities accounts for Baht 3,578.21 million, mostly in the construction of Suvarnabhumi Airport and Novotel Suvarnabhumi Airport Hotel.
- Net cash received from financing activities accounts for Baht 1,204.16 million due to an additional disbursement.