Analysis of Financial Statements Quarter 1/2002 Performance in Q1/2002 Overall performance Central Pattana Public Company Limited announced the net income for Quarter1/2002 of 258.1 Million Baht, significantly increased from Q1/2001 by 102.4 Million Baht or 66%. Such increase mainly came from increase in rental and service revenue by 27.3% and decrease in loss on foreign exchange rate due to redemption of Euro Convertible Debentures in April 2001. Revenues Consolidated revenues comprised of Rental & Service income and Food & Beverage sales of the first quarter of 2002 amounted to 846.7 Million Baht, increased from the first quarter of 2001 by 181.5 Million Baht. Main reason of the increase in revenues derived from consolidation of the new subsidiary's Project, Central City Bangna. The Company has increased its share holding from 20% to 99% in September 2001. Other reasons for such increases are: 1. Rental & Service income - These income increased by 28.7 Million Baht from the first quarter of 2001 because of increase in occupancy rate and average rental rate of Shopping centers and Office buildings. Especially Central Plaza Lardprao and Central Plaza Pinklao, their current occupancy rate of shopping centers and office buildings are 99%. While the current occupancy rate of Central Airport Plaza Chiangmai, Central Festival Pattaya, Central City Bangna and Central Rachada Rama3 are at 98%, 96%, 94% and 91% respectively. Furthermore, the company has continuously developed and improved its shopping centers and office buildings such as JunctionX at Pinklao, Brew House Pattaya and SFX Lardprao which have been opened in order to attract more customers traffic. The company always keep it centers trendy by adding the modern retails with strong potential. For office buildings, the tenants group was expanded to musical training centers, educational institutions and health care centers. 2. Food & Beverage sales - The revenue from food and beverage increased 10% from the same quarter of previous year due to consolidation of Central City Bangna's food center. 3. Other income - Other income comprised of Gain from sales of assets, property tax, advertisment, insurance and other miscellaneous income totaled 30.8 Million Baht, decreased by 32%. This is due to gain on sales of investment in subsidiaries amounted to 15.4 Million Baht and gain on redemption of Euro Convertible Debentures amounted to 3 Million Baht, in the first quarter of 2001. Cost of sales and Administrative expenses Cost of sales Cost of sales comprised of cost of rental and service and cost of food and beverage sales. The cost of sales of the first quarter of 2002 was 398.3 Million Baht, increased by 28% from the first quarter of 2001. The main reason is the increase in cost from Central City Bangna and the followings : (1) Cost of rental and service The cost of rental and service mainly consisted of depreciation expenses, electricity and water. The increase by 30% from Q1/2001 was due to increase in the rates of electricity and water as well as increase in the number of units consumed in all projects. (2) Cost of food and beverage Cost of food and beverage increased 11% Q-O-Q, directly related to the increase in Sales. Administrative expenses Administrative expenses mainly were people cost, advertising and promotion expenses. These expenses of the first quarter amounted to 79.2 Million Baht, increased 15% from the same quarter of prior year because of the increase in people cost of the new projects like Bangna, Chaingmai Phase 2B and Rama2. Gross Profit and Net Income Gross profit margin was 53% of Net Sales which is in line with that of Quarter1/2001. Whereas net income increased by 66% ,compared to Quarter1/2001, which is mainly came from increase in rental revenue and decrease in loss on exchange rate. Return on Equity Return on Equity (ROE) of Q1/2002 was 25%, significantly increase as compare to 15% of Q1/2001. The shareholders has approved the resolution to pay cash dividend at 2.75 Baht/share on April 26, 2002. Financial Position Assets As at March 31,2002, the Company had total assets of 15,092 Million Baht, increased from December 31, 2002 by 348.4 Million Baht.The significant increase was the increase in short-term investment. It mostly came from cashflow from operation and short term loan which have been reserved for payment of construction cost in Rama2 and Chaingmai. The quality of accounts receivable, the collection of accounts receivable has been more efficient and effective. The account receivable turnover in days has been reduced continuously. The average receivables turnover in days of Q1/2002 was 12 days, resulting the favorable increase in operating cash flow. Liabilities As at March 31,2002, the Company had total liabilities of 10,883.3 Million Baht, increased 369 Million Baht or 4% from December 31, 2001 due to the issuance of short-term bill of exchange amounted of 384 Million Baht for Rama2's project . Shareholders' Equity The Shareholders' Equity increased by 412 Million Baht due to a higher cashflow from operation. Liquidity The company had an appropriate liquidity level. As at March 31, 2002, the company had cash on hand, cash at bank and short-term investment of 2,491 Million Baht, increased from December 31, 2001 by 14%. Moreover, the liquidity ratio stated appropriately at 0.9 as at March 31,2002. Capital Expenditure The capital expenditure of Q1/2002 was 171.3 Million Baht, which mainly came from the construction of Rama2, Chaingmai and Bangna. Source of funds : The company had appropriate capital structure with " Debt to Equity Ratio" at 1.2 : 1 - Shareholder's Equity The shareholder's Equity of Q1/2002 increased 235 Million Baht or 5.9% due to the increase in net income, regardless the dividend announcement's amounted 275 Million Baht in March 2002. - Interest bearing debt as at March 31, 2002 amounted to 5,248 Million Baht. The detail are as follows : Type of liabilities Due date Due amount Interest rate Secured Assets 1. Unsecured Bond 30 Mar. 2003 2nd 120 Million Baht 7.75% None 3rd 780 Million Baht MLR-0.5% 2. Unsecured Bond 28 Jun. 2006 1,000 Million Baht MLR-0.375% None 3. Property Fund 1 31 Aug. 2011 514 Million Baht Yr. 1-5 MLR-1% Building, Structural (60.53% Yr. 6-7 MLR-0.75% and Leasehold Right Yr. 8-10 MLR-0.5% of Rama3 4. Property Fund 2 21 Dec. 2011 1,756 Million Baht a) Yr.1-5 MLR-1% Building, Land and Yr. 6-7 MLR-0.75% structural lease right Yr. 8-10 MLR-0.5% of Pinklao b) Yr.1-2 6.875% Yr.3-10 7% 5. Short-term Bill of Exchange 579 Million Baht 4.25-6.05% None 6. Bank Loan Chaingmai 5 Million Baht MLR Land and constructiion 7. Bank Loan Bangna 494 Million Baht In Process of debt Office building and restructuring. Leasehold right of 6th Floor Central Pattana Public Co., Ltd. and Subsidiaries Key Ratio As at 31 Dec. 31 Dec. 2001 31 Mar. 2001 31 Mar. 2001 LIQUIDITY RATIO Liquidity Ratio 1.32 0.95 0.88 Account receivables turnover in days 13 14 12 PROFITABILITY RATIO Gross Profit Ratio 52.7% 53.2% 53.0% Net Income Ratio 20.2% 21.4% 29.0% ROE 14.9% 15.6% 24.5% EFFICIENCY RATIO ROA 4.3% 5.5% 6.9% FINANCIAL POLICY RATIO Interest Bearing Debt to Equity 2.5 1.0 1.2 EBITDA/Interest Expense 6.9 3.8 5.0