Central Pattana Public Company Limited Analysis of the company performance and financial position for Quarter 2/2003 OVERALL PERFORMANCE Financial results Central Pattana Public Company Limited reported the net income for Q2/2003 of 310.3 MB. (EPS 0.78 baht per share), increased Y-O-Y by 68.3 MB. or 28.2%. This is mainly due to the opening of Central Plaza Rama 2, Central Airport Plaza Chiangmai Phase 2 B, and the acquisition of Central World Plaza (World Trade Center Bangkok). Central Airport Plaza Chiangmai Phase 2 B was opened on April 9, 2003 with more than 90% occupancy rate. The company has successfully sold units of Thai Business Fund 4, the owner of Central World Plaza, on June 23, 2003 to financial institutions amounted to 1,575 MB. The company has paid dividend from net profit of the year 2002, at the ratio of 1 baht per share totaling 400 MB., or 42% of net profit to shareholders on May 16, 2003. Revenues Total rental, service and food and beverage revenues for the second quarter of the year 2003 amounted to 1,300.1 MB., increased by 419.7 MB. or 47.7% from the same quarter last year. This mainly came from revenue from Central Plaza Rama 2, Central World Plaza and Central Airport Plaza Chiangmai Phase 2B, and increase in rental rate from renewal of short-term contracts and rental income from percentage of sales contracts. Occupancy rate of most centers also increased. Major Bowl and Fitness First were opened in this quarter at Central Plaza Ratchada Rama 3. Cost of sales and Administrative expenses Cost of sales Cost of sales from rental, service and food and beverage of the second quarter of 2003 was 707.9 MB. or 71%, higher than the same quarter of 2002 by 293.9 MB. This is due to cost of Central Plaza Rama 2 and Central Airport Plaza Chiangmai Phase 2B as well as the increase in utility units consumed as a result of more rented space. Gross profit margin decreased due to more discount given to tenants during the first year of operation of the new centers. Management believes that such discount will be no longer required starting next year. Administrative expenses Administrative expense s amounted 157.3 MB., which is higher by 66.3 MB. Y-O-Y due to expenses of Central World Plaza and Central Plaza Rama 2 as well as advertising expense for the opening of Central Airport Plaza Chiangmai Phase 2B. The company recorded compensation to State Railway of Thailand for building modification of Central Plaza Ladprao in this quarter amounted to 8.3 MB. Financial Position Assets As at June 30, 2003 the company had total assets amounted 23,564.7 MB., increased from December31, 2002 by 2,191.6 MB. or 10.3% mainly came from the construction cost of Central Airport Plaza Chiangmai Phase 2 B and the increase in cash received from sale of units of Thai Business Fund 4. Liabilities As at June 30, 2003 the Company had total liabilities amounted 17,322.8 MB., increased from December 31, 2002 by 1,988.4 MB. or 13% due to set up of property fund for Central City Bangna and sale of units of Thai Business Fund 4. Shareholders' Equity The Shareholders' Equity was higher by 203.2 MB. or 3.4% from December 31, 2002 due to an increase in net income net of dividend paid to shareholders. The Company increased its registered capitals to 2,178,816,000 baht by issuing convertible preferred share with 35,714,200 shares at 28 baht per share, par value 5 baht per share, to Thailand Equity Fund on July 18, 2003. After this capital increase, the Thailand Equity Fund holds approximately 8.2% of total registered capital. Ratio Analysis As at June 30, 2003 the Company has current ratio at 0.9 times. Cash and short-term investments amounted to 3,031.1 MB., increased by 1,758 MB. or 42% from December 31, 2002 while net interest bearing debt to equity ratio was 1:1. Return on Equity (ROE) for this quarter was 19.9%, higher than 15.7% in the same quarter of prior year. Return on Assets (ROA) was 5.3%, slightly higher than 5.2% in the same quarter last year. Key ratio June 30, 03 Dec. 31,02 June 30,02 Liquidity ratio Current assets/Current liabilities (times) 0.9 0.24 0.8 Account receivables turnover (days) 11 11 12 Profitability ratio Gross profit margin (%) 45.5 52.3 53.0 Net profit margin (%) 22.8 24.6 26.0 Return on Equity (%) 20.6 15.7 22.2 Efficiency ratio Return on Assets (%) 5.3 5.2 6.3 Financial Policy Interest coverage (times) 5.1 5.2 5.8 Net interest bearing debt to equity (times) 1.1 1.0 0.7