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MD&A
Management Discussion and Analysis for the three- month and six-month period ended March 31st, 2007 and 2006 for Airports of Thailand Public Company Limited and its subsidiaries
1.Operating results of Airports of Thailand Public Company Limited and its subsidiaries (AOT)
1.1The operating results for the three-month period
Operating results of Airports of Thailand Public Company Limited and its subsidiaries (AOT) for the 2nd Quarter of 2007, (January 1st- March 31st,2007), AOT has operating revenues of Baht 4,894.21 million, a year-on-year increase of Baht 616.03 million,ora 14.40% rise.The increase is attributable to:
An increase in aeronautical revenues of Baht 964.95 million, a year-on-year increase of 35.19% due to an increasing number of aircraft and passenger movements of 12.36% and 7.71% accordingly and also the increase in the passenger service charges for international passenger from Baht 500 to Baht 700 and domestic passenger from Baht 50 to Baht 100 since February 1,2007 by including in the ticket at agency level.
A decrease in non-aeronautical revenues of Baht 348.92 million, a year-on-year decrease of 22.72% mainly due to the reduction of the revenues from both duty free and commercial activities between AOT and King Power Duty Free Plc. and King Power International Plc which has been recognized as the revenues since the commercial operations of Suvarnabhumi airport. The resolution of the AOT Board of Director's meeting No. 10/2007 on 22 March 2007 stated that the duty free contract between AOT and King Power Duty Free Plc. and commercial activities contract between AOT and King Power International Plc.,which haven't been followed the Public-Private Joint Venture Act, were illegitimated and any commitments between these parties should be invalid. On 3 May 2007
AOT has notified King Power Duty Free Plc.and King Power International Plc of the illegitimacy of these contracts. Consequently, AOT would not recognize any revenues from King Power Duty Free Plc.and King Power International Plc. of Baht 1,101.11 million in the 2nd Quarter of fiscal year 2007, Baht 834.55 million in the 1st Quarter of fiscal year 2007 and Baht 20.87 million in the fiscal year 2006 which totaled of Baht 1,956.53 million.
AOT has operating expenses of Baht 4,074.74 million, a year-on-year increase of Baht 2,352.49 million,or a 136.59% rise due to the commercial operations of Suvarnabhumi Airport and Novotel Suvarnabhumi Airport Hotel which is our subsidiary. An increase of the areas leads to an increasing numbers of outsourced workers,the utilities expenses and also the higher insurance premium. A decrease of foreign exchange gain leads to a drop in the net profit of Baht 3,281.56 million,ora 87.94% drop resulting in a decrease of the basic earnings per share,which is at Baht 0.31, lower than the 2nd Quarter of 2006 which is at Baht 2.61.
The comparison between key operating results of the 2nd Quarter of fiscal year 2007 and 2006 is as follows:
|
Unit: Million (Baht) |
Q2/2007 |
Q2/2006 (Decrease) |
Increase |
%changes |
| Operating revenues |
4,894.21 |
4,278.18 |
616.03 |
14.40 |
| Aeronautical revenue |
3,707.06 |
2,742.11 |
964.95 |
35.19 |
| Non- aeronautical revenue |
1,187.15 |
1,536.07 |
(348.92) |
22.72 |
| Operating Expenses |
4,074.74 |
1,722.25 |
2,352.49 |
136.59 |
| Operating Income |
819.47 |
2,555.93 |
(1,736.46) |
(67.94) |
| Gain(Loss)on foreign exchange |
417.44 |
1,848.31 |
(1,430.87) |
(77.42) |
| Earning before income tax expenses |
1,367.96 |
4,956.13 |
(3,588.17) |
(72.40) |
| Net profit |
449.82 |
3,731.38 |
(3,281.56) |
(87.94) |
| Basic earnings per share (Baht) |
0.31 |
2.61 |
(2.30) |
Aeronautical Revenues AOT has aeronautical revenues of Baht 3,707.06 million, a year-on-yearincrease of Baht 964.95 million, or a 35.19 % rise. The increase is attributable to:
- Landing and Parking Charges of Baht 930.19 million,a year-on-year increase of Baht 40.98 million or a 4.61% rise
- Passenger Service Charges of Baht 2,665.92 million,a year-on-year increase of Baht 891.12 million or a 50.21% rise
- Aircraft Service Charges of Baht 110.95 million,a year-on-year increase of 32.85 million or a 42.06% rise
Non-aeronautical Revenues AOT has non-aeronautical revenues of Baht 1,187.15 million, a year-on-year decrease of Baht 348.92 million or a 22.72% drop.The decrease is attributable to:
- Office and State Property Rental of Baht 223.85 million, a year-on-year decrease of Baht 17.38 million or a 7.20% drop
- Service Revenues of Baht 722.97 million, a year-on-year increase of Baht 495.31 million or a 217.57% rise. The increase is also comprised of the operating revenues of Novotel Suvarnabhumi Airport Hotel.
- Concession Revenues of Baht 240.33 million, a year-on-year decrease of Baht 826.85 million or a 77.48% drop
The Operating Expenses AOT has total operating expenses of Baht 4,074.74 million, a year-on-year increase of Baht 2,352.49 million or a 136.59% rise due to the commercial operations of Suvarnabhumi airport which can be shown as follows:
- Personnel Expenses of Baht 599.28 million, a year-on-year increase of Baht 93.66 million or an 18.52 % rise due to the employment of new workers and an annual salary adjustment.
- Operating Expenses of Baht 1,210.30 million, a year-on-year increase of Baht 561.35 million or an 86.50% rise due to an increasing numbers of outsourced workers at Suvarnabhumi Airport and the public transportation center and also of the Novotel Suvarnabhumi Airport Hotel's operating expenses. Moreover, the increase is also comprised of an increase in the utility expenses, the insurance premium and also the increase in the passenger service charge collecting fee.
- Repair and Maintenance Expenses of Baht 154.31 million, a year-on-year increase of Baht 104.37 million or a 208.99 % rise due to the repair and maintenance expenses of baggage handling conveyors,elevators, escalators, moving sidewalks and other construction.
- State Property Rental of Baht 208.77 million, a year-on-year increase of Baht 14.78 million or a 7.62% rise, which is risen in accordance with a rise in operating revenues
- Depreciation and Amortization of Baht 1,902.08 million, a year-on-year increase of Baht 1,578.33 million or a 487.52% rise.
- A decrease in foreign exchange gain of Baht 1,430.87 million, a 77.42% drop due to the foreign exchange rate adjustment at the end of the 2nd Quarter of 2007 of Baht 1,831.18 million and also a decrease in a loss from the cross currency swap of Baht 400.31 million.
- An increase in interest expenses of Baht 576.08 million mainly due to the loan for Suvarnabhumi airport and Novotel Suvarnabhumi Airport Hotel which is recorded as assets under construction in the 2nd Quarter of 2006.
1.2 The operating results for the six-month period (October 1, 2006-March 31,2007)
AOT has the net profit of Baht 1,226.20 million, a year-on-year decrease of Baht 5,804.65 million, or a 82.56% drop resulting in a decrease of the basic earnings per share, which is at Baht 0.86, lower than the previous year period which is at Baht 4.92.
The comparison between key operating results of the six month period ended March 31th,2007 and 2006 is as follows:
|
Unit: Million (Baht) |
Q2/2007 |
2006 (Decrease) |
Increase |
%changes |
| Operating revenues |
9,051.41 |
8,284.77 |
766.65 |
9.25 |
| Aeronautical revenue |
6,445.59 |
5,263.90 |
1,181.69 |
22.45 |
| Non- aeronautical revenue |
2,605.82 |
3,020.86 |
(415.04) |
(13.74) |
| Operating Expenses |
7,978.02 |
3,323.86 |
4,654.16 |
806.41 |
| Operating Income |
1,073.39 |
4,960.91 |
(3,887.51) |
(78.36) |
| Gain(Loss)on foreign exchange |
1,515.89 |
3,111.83 |
(1,595.94) |
(51.29) |
| Earning before income tax expenses |
2,987.42 |
8,949.67 |
(5,962.24) |
(775.54) |
| Net profit |
1,226.20 |
7,030.85 |
(5,804.65) |
(82.56) |
| Basic earnings per share (Baht) |
0.86 |
4.92 |
(4.06) |
2.The financial statements of Airports of Thailand Public Company Limited and its subsidiaries as at March 31st, 2007 compared with the end of fiscal year 2006 (September 30th, 2006)
As at March 31th, 2007, AOT has total assets of Baht 143,449.27 million, a decrease from the end of fiscal year 2006 (September 30th, 2006) of Baht 7,055.79 million or a 4.69% drop. The assets comprise current assets and non-current assets, which account for 12.91% and 87.09% of total assets respectively.The assets can be elaborated in details as follows:
|
March 31st, 2007 |
September 30th, 2006 | |||
|
Million(Baht) |
% of total assets |
Million(Baht) |
% of total assets | |
| Total current assets |
18,517.04 |
12.91 |
23,539.06 |
15.64 |
| Investments |
513.61 |
0.36 |
567.60 |
0.38 |
| Property, plant and equipment-net |
111,139.26 |
77.48 |
114,077.98 |
75.80 |
| Assets under construction |
5,171.02 |
3.60 |
4,670.14 |
3.10 |
| Intangible assets and other non-current assets |
8,108.34 |
5.65 |
7,650.28 |
5.08 |
The current assets have decreased for Baht 5022.02 million, a 21.33% drop mainly due to a decrease in bank deposit in order to pay an annual dividend of 2006.
Property, plant and equipment-net have decreased for Baht 2,938.72 million, a 2.58% drop due to the depreciation of Suvarnabhumi airport and Novotel Suvarnabhumi Airport Hotel.
Assets under construction have increased for Baht 500.88 million, a 10.73% rise due to an additional construction work at Suvarnabhumi airport and regional airports.
As at March 31th, 2007, AOT has total liabilities of Baht 73,759.80 million, a decrease of Baht 5,697.29 million or a 7.17% drop, which comprise
|
March 31st, 2007 |
September 30th, 2006 | |||
|
Million(Baht) |
% of total liabilities |
Million(Baht) |
% of total liabilities | |
| Current liabilities (including current portion of long-term loans) |
9,134.47 |
12.38 |
13,993.24 |
17.61 |
| Long-term loans |
53,007.56 |
71.87 |
55,942.02 |
70.41 |
| Concession revenue |
4,460.00 |
6.05 |
4,460.00 |
5.61 |
| Other non-current liabilities |
7,112.17 |
9.59 |
5,016.46 |
6.31 |
Current liabilities (including current portion of long-term loans) have decreased from the end of fiscal year 2006 by Baht 4,858.77 million or a 34.72% 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 2006 by Baht 2,934.46 million or a 5.25% drop due to the repayment of the loan for Suvarnabhumi airport's construction.
Other non-current liabilities have increased from the end of fiscal year 2006 by Baht 2,095.94 million or a 22.01% rise due to the application of financial derivative of cross currency swap on both principal and interest of the foreign loan.
As at December 31st, 2006 AOT has shareholder's equity of Baht 69,689.47 million, a year-on-year decrease of Baht 1,358.50 million or a 1.91% drop partly due to an annual dividend payment of 2006.
For cash flow position as at March 31st, 2006, cash and cash equivalents totals Baht 6,487.12 million, a decrease from the beginning of fiscal year 2007 (October 1, 2007) of Baht 13,272.54 million or a 67.16% drop. In short, the details of the sources and uses of funds are as follows:
- Net cash received from operating activities accounts for Baht 129.97 million.
- Net cash payment for investing activities accounts for Baht 11,660.32 million, mostly in the construction of Suvarnabhumi Airport.
- Net cash received from financing activities accounts for Baht 1,742.18 million due to the repayment of long-term loan for Baht 570.08 million, annual dividend payment for Baht 2,571.43 million and an additional disbursement for Baht 1,411.18 million.
