Central Pattana Public Company Limited Management's Discussion and Analysis Consolidated Financial Results : Q1/2005 OVERALL PERFORMANCE The Company's net profit for Q1/2005 was 364.9 MB.,increase 24.3 MB.or 7.1% Y-O-Y, although interest expenses and income tax were higher than last year.This was mainly came from rental revenue of The Offices at Centralworld, which was opened in November 2004 and increase in rental rates of its existing shopping centers. In Q1/2005 The Offices at Centralworld has been officially opened. Currently, its occupancy rate is approximately 65%. Moreover, Central World Plaza and Central Town Center Rattanathibet are under construction and renovation which resulted in higher borrowings. However, net interest bearing debt to equity ratio in Q1/2005 was 0.8x which was still lower than the company's policy at 1x. The shareholder meeting No.1/2005, held on April 28, 2005 passed the resolution to pay dividend from net profit of 2004 at 0.25 Baht per share, or total amount of 544.7 MB., which is 40% of net income on May 25, 2005. Revenues Total rental & service and food & beverage revenues in Q1/2005 was 1,569.2 MB.,increased Y-O-Y by 175.0 MB.or 12.6%, due to rental revenue from The Offices at Centralworld which was opened in November 2004. This was also due to increase in rental rate of existing projects, and increase in revenue from revenue sharing contract which was driven by continuous promotion activities in shopping centers. Cost and Administrative expenses In Q1/2005, Cost of rental and service and food and beverage was 853.4 MB., increased by 94.5 MB. or 12.4% Y-O-Y. Selling and administrative expenses was 208.9 MB., increased by 40.5 MB. or 24.0% Y-O-Y. These were mainly came from additional operating cost, depreciation cost and administrative expenses of The Offices at Centralworld and Central Park Rama 2,and increase of land lease fee of Centralworld project.Moreover, higher selling and administrative expenses were due to higher advertising and promotion expenses from the grand opening ceremony of The Offices at Centralworld in February 2005 and activities to promote tourism for southern provinces of the Andaman Sea. Financial Position as at March 31, 2005 * Assets As at March 31,2005,the consolidated assets were 27,169.7 MB. ,increased from December 31, 2004 by 65.4 MB. or 0.2%, mainly came from the increase in property and equipment from the construction and renovation of Central World Plaza and Central Town Center Rattanathibet. * Liabilities As at March 31, 2005 , the consolidated liabilities were 18,075.2 MB.,decreased from December 31, 2004 by 285.9 MB. or 1.6%, due to payment of constructors payable and decrease of other payable amounted to 170.0 MB.from payment of the matured promissory note for the purchase of land of new project. * Shareholders' Equity Shareholders' equity as at March 31, 2005 was 9,094.5 MB., higher than December 31, 2004 by 351.3 MB. or 4.0%, came from net income of Q1/2005. Financial Ratio Analysis * Profitability In Q1/2005 Gross profit margin was 45.6% in line with Y-O-Y despite the revenue of The Offices at Centralworld was not covered the costs, especially depreciation. This was due to most of tenants were still under decoration of its premises while gross profit margin of other existing projects were increased. Return on equity (ROE) in Q1/2005 was 16.5%, decreased Y-O-Y from 17.2% and Net profit margin was 22.1% , decreased Y-O-Y from 23.1% due to consolidated performance of The Offices at Centralworld. It is considered normal that its performance will be gradually improved as more tenants move into its premises. * Financial Policy Interest coverage ratio was 4.6x, decreased Y-O-Y from 7.5x because interest expenses were increased. Net interest bearing debt to equity ratio was increased from 0.7x in Q1/2004 to 0.8x in Q1/2005 due to increase in long term loan to support expansion. As at March 31, 2005, interest bearing debt was comprised of 86% fixed and 14% floating interest rate. * * * * * * Key Ratio Q1/2005 Q1/2004 LIQUIDITY RATIO Current Assets/Current Liabilities (Times) 0.6 1.6 Accounts Receivable Turnover (Days) 6 7 PROFITABILITY RATIO Gross Profit Margin (%) 45.6% 45.6% Net Profit Margin (%) 22.1% 23.1% Return on Equity (%) 16.5% 17.2% EFFICIENCY RATIO Return on Assets (%) 5.4% 5.1% FINANCIAL POLICY RATIO Net Interest Bearing Debt to Equity (Times) 0.8 0.7 Interest Coverage (Times) 4.6 7.5