Central Pattana Public Company Limited Analysis of the company performance and financial position for Quarter 4/2003 OVERALL PERFORMANCE Q4/2003 Central Pattana Public Company Limited reported the profit from operation of Q4/2003 amounted to 482.3 MB., increased Y-O-Y by 302.8 MB. or 168.7% mainly due to revenue and profit from CentralPlaza Rama2, Central World Plaza and Central Airport Plaza Chiangmai Phase2B. Net income of Q4/2003 amounted to 284.2 MB., higher than 101.6 MB of last year due to higher operating income as mentioned earlier.In addition there was gain from early repayment of restructured debt of Central Play Land Co., Ltd. amounted to 67.4 MB. While there were additional VAT and tax expenses and provision for loss on impairment of asset amounted to 22.8 MB and 27.8 MB respectively last year. Revenues Total rental, service and food and beverage revenues of Q4/2003 amounted to 1,311.7 MB.,increased Y-O-Y by 315.7 MB. or 31.7%. Which is mainly from Central Plaza Rama2, Central World Plaza and Central Airport Plaza Chiangmai Phase2B. There were also rental from increase in salable areas such as cinema at Central Plaza Pinklao and IT zone and Education zone at Central City Bangna.Other income was 149.1 MB,higher from 37.8 MB of last year by 111.3 MB or 295.2% due to gain from early repayment of restructured debt of Central Play Land Co., Ltd. amounted to 67.4 MB Cost of goods sold and Selling&Administrative expenses Cost of goods sold of Q4/2003 was 747.6 MB.,higher Y-O-Y by 245.7 MB or 49.0% due to cost of new projects, comprising of land rental cost, depreciation, property tax, insurance cost and utilities cost.Gross profit margin of Q4/2003 was 43.0%, decreased from 49.6% of last year due to increasing in cost as mentioned above. It is considered normal for the newly opening projects. It usually takes 2-3 times,that the profitability ratio shall be higher than 50%.Administrative expenses of Q4/2003 amounted to 244.4 MB., lower than 337.4 MB of Q4/2002 by 93 MB. or 27.6%. It was mainly due to expenses of new projects, especially people cost and advertising expenses for relaunch of Central City Bangna as well as the provision for losses on disputed construction contract amounted to 36.5 MB. Financial Position Assets As at December 31, 2003, the consolidated assets were 23,549.9 MB, increased from December 31, 2002 by 2,176.8 MB. or 10.2 % mainly came from development and renovation of Central World Plaza , acquisition cost of Siam Jusco Rattanathibet,renovation of Central City Bangna and construction cost and land cost of Central Airport Plaza Chiangmai Phase2B. Current assets increased by 1,063.4 MB. or 60.5% due to higher cash and cash equivalent from cash flow from operation and higher short-term investment in debt security.Accounts receivable as at 31 Dec. 2003 was lower than last year due to decrease in number of collection day especially Central Plaza Rama2 Liabilities As at December 31, 2003, the consolidated liabilities were 15,594.3 MB, increased from December 31, 2002 by 259.9 MB. or 1.7% due to higher long term borrowing in replace of short term borrowing carried from last year. CPN set up the property funds, Thai Business Fund# 4 for Central World Plaza, and Thai Business Fund# 5 for Central City Bangna and drawdown project financing loan of Central Airport Plaza Chiangmai Phase2B and Central Plaza Rama2. As a result, long term loan increased from 3,453.1 MB as at December 31, 2002 to 6,961.6 MB as at December 31, 2003, while current portion of long term loan decreased from 4,085.5 MB as at December 31, 2002 to 1,033.5 MB as at December 31, 2003. CPN also repaid the long-term loan from related parties amounted 43.5 MB . Guarantee for leasehold right decreased from last year due to completion of transfer of lease contract of Central Plaza Rama2 during the year 2003. Contractor payable as at end of year 2003 was lower than last year because Central Plaza Rama2, Central Airport Plaza Chiangmai Phase2B and Central City Bangna had been under construction in 2002, while construction work of such projects has mostly been completed within the year 2003. Unearned income and deposits received from customers in 2003 increased from 2002 due to opening of Central Airport Plaza Chiangmai Phase2B. Shareholder's Equity Shareholders' equity as at December 31, 2003 was 7,955.6 MB., higher from ended of the year 2002 by 1,916.9 MB. , mainly came from net income of the year 2003 and increase in share capital from issuance of 1,000 MB. convertible preferred stock with 35,714,200 shares sold to Thailand Equity Fund at 28 Baht/share. Major investors of the fund were International Finance Corporation (IFC), California Public Employees Retirement System (CalPERS) and Asian Development Bank, etc. Dividend from net profit of 2002 was paid on May 17, 2003 amounted to 400 MB. Financial Ratio Analysis Profitability Gross profit of Q4/2003 was 43%, lower than 49.6% of the same period last year due to increase in cost and expenses, including premise cost, utilities cost, people cost and advertising expenses. This is considered normal for the newly opening projects. It usually takes 2-3 years, that the profitability ratio shall be higher than 50%. While net profit and ROE of Q4/2003 was 20.2% and 14.3%, higher than 9.5% and 6.7% of Q4/2002 respectively. Liquidity and Financial Policy The liquidity of Q4/2003 was improved. Cash flow from operation of Q4/2003 amounted to 900.9 MB, increased from 828.3 MB of Q4/2002 by 72.6 MB or 8.8% came from operating income from Central Plaza Rama2, Central World Plaza and Central Airport Plaza Phase2B. The liquidity also improved due to lower collection days in receivable from 11 days as at December 31, 2002 to 7 days as at December 31, 2003. Moreover, the restructured debt of Central Play Land Co., Ltd. was early prepaid. Net interest bearing debt to equity ratio as at December 31, 2003 was 0.7 times, while Interest coverage ratio as for the year ended December 31, 2003 was 7.9 times, decreased from 8.6 times of last year due to higher interest expenses. Efficiency of Assets Utilization ROA as for the year ended December 31, 2003 was 5.1%, higher than 4.4% of last year principally due to higher operating income of full year operation of Central Plaza Rama2 and opening of Central Plaza Chiangmai Phase2B in April 2003. Key Financial Ratio Q4/2003 Q4/2002 Y2003 Y2002 Profitability Gross Profit (%) 43.0 49.6 45.6 52.3 Net Profit (%) 20.2 9.5 21.9 24.6 ROE (%) 14.3 6.7 15.0 15.7 Y2003 Y2002 Liquidity Current Ratio (Time) 0.77 0.25 Collection in accounts receivable (Days) 7 11 Efficiency of assets utilization ROA (%) 5.1 4.4 Financial Policy Interest Coverage Ratio (Times) 7.9 8.6 Net interest bearing debt/Cash (Times) 0.7 1.0