BTS GROUP HOLDINGS PCL

Transcription

1 1Q 2018/19 HIGHLIGHTS Services revenue from the provision of E&M works and the train procurement service for the Southern and Northern Green Line extensions of THB 926mn was recorded in 1Q 2018/19 Mass Transit Operation & Maintenance (excluding interest income from train procurement and E&M provision) revenue increased 4.4% YoY to THB 452mn from the contractually agreed increase in the operating fee of the existing green line extensions and one additional station (Samrong: E15) on the Southern Green Line extension Despite the deduction of free-trip allowance to passengers from train services disruption, 1Q 2018/19 farebox revenue continued to grow at 1.1% YoY to THB 1,640mn on the back of an increase in average fare (rose 2.7% YoY to THB 28.7 per trip). Following the successfully signed contract for the Pink and Yellow Line in June 2017, the Notice-to-Proceed (NTP) for the Pink and Yellow Line was issued on 29 June 2018, marking the start of a 39-month construction period to completion. BTSC and Krungthep Thanakom (KT) entered into a 30-year Operation and Maintenance (O&M) Services Agreement on 31 July 2018 and Sale and Installation of Electrical and Mechanical (E&M) Works Agreement of the Gold Line Project Phase 1 (Krung Thonburi BTS Station Khlong San District Office, 1.7km and 3 stations). The first of a series of 4-carriage trains from Siemens was delivered to the Company on 5 August 2018 to accommodate the full operation of Southern Green Line extension, which is targeted to begin commencement of operations in December Media business revenue of THB 1,077mn in 1Q 2018/19, a 26.8% or THB 228mn increase YoY from the solid performance of all Outof-Home (OOH) Media business segments Operating EBITDA was THB 1,128mn in 1Q 2018/19, growing by THB 212mn or 23.1% YoY Recurring net profit (after MI) of THB 472mn, an increase of THB 80mn or 20.4% YoY chiefly from the improvement in recurring gross profit, an increase in share of net profit from associates/jvs and lower corporate income tax, being partially offset by higher finance cost Reported net profit (after MI) of THB 387mn, decreasing by THB 18mn or 4.4% YoY from higher non-recurring selling and administrative expenses, higher financial cost and an increase in profit to non-controlling interests of subsidiaries. SIGNIFICANT EVENTS 2 April 2018: VGI Global Media Public Company Limited (VGI), through VGI Global Media (Malaysia) Sdn Bhd (VGM), successfully acquired 25% of Meru Utama Sdn Bhd (MUSB). MUSB engages in aviation media business at both KL International Airport and a low cost carrier terminal. 4 April 2018: the Board of Directors of BTS Group Holdings Public Company Limited (BTSG or the Company) approved the reduction of paid-up capital of THB 383,359,600mn by writing-off the treasury stock of 95,839,900 registered shares (par value at THB 4 per share), which have been repurchased and remained unsold under the Company s past share repurchase programme. The remaining registered shares after the write-off were 16,417,974,357 ordinary shares, of which 11,844,529,054 are issued and fully-paid shares. 18 June 2018: BTS Group bought Terms of Reference (TOR) of a High Speed Rail Project that connects 3 main airports (Don Mueang, Suvarnabhumi and U-Tapao), which were made available for purchase by the State Railway of Thailand (SRT). The bid submission is 12 November 2018, the bid envelope opening date on 13 November 2018 and the winning bids are expected to be announced by the end of June 2018: The Notice-to-Proceed (NTP) for the Pink Khae Rai to Min Buri; 34.5km, 30 stations) and Yellow Line (Lad Prao to Sam Rong; 30.4km, 23 stations) was issued on 29 June 2018, marking the start of a 39-month construction period to completion. The full operation of these two lines are expected to begin in October June 2018: VGI recorded receivables from the exercise of VGI s warrant number 1 (VGI-W1) on 29 June 2018 of THB 7.1bn 1. Of this, BTSG and BTSC exercised its rights totaling THB 5.4bn. The cash received by VGI was utilised for the acquisition of Kerry Express (Thailand) Limited (Kerry TH) and used for the subscription of shares in the announced rights offering of Master Ad Company Limited (MACO) and expansion of other digital and online-related businesses. 1/10

2 5 July 2018: The Annual General Meeting of Shareholders 2018 of VGI approved (i) the acquisition of 276,000 ordinary shares or 23% of total shares in Kerry TH from KLN Logistics (Thailand) Limited, Gather Excellence Limited and Siam Chao Phraya Express Limited for a total purchase price of THB 5.9bn, as well as (ii) the issuance and offering of 121,578,525 VGI s newly issued ordinary shares with a par value of THB 0.10, to the Sellers at the offering price of THB 7.28 per share, totaling THB 885,091,662. Kerry TH is the leading domestic express delivery services with more than 800,000 parcels a day. Completion took place in July July 2018: The company established Turtle 23 Companly Limited as a new subsidiary with an initial captital of THB 350mn, divided into 3.5mn ordinary shares with a par value of THB 100 per share. The objective is to invest in food and beverage business and to engage in investment in securities of other food and beverage companies including restaurant and other related businesses. 18 July 2018: The Extraordinary General Meeting of Shareholders of MACO approved the acquisition of 75% in VGM with a total investment value of THB 360mn. This transaction is expected to be completed within the 3 rd quarter of FY 2018/19. VGM is a holding company investing in advertising-related companies in various potential areas such as, airport, cinema, highway, major supermarket, office building and mass transit. 23 July 2018: The Annual General Meeting of Shareholders 2018 approved the final dividend for FY 2017/18 of approximately THB 2,191mn or THB per share which will be paid on 16 August 2018, bringing the total annual dividend paid up to THB 4,145mn (or THB 0.35 per share), or equivalent to an annual dividend yield of 3.95%. The issuance of BTS-W4 warrants (BTS-W4) up to 1,755mn units 2 at a ratio of 9:1 with exercise price of THB was approved by shareholders at the same date. 31 July 2018: Bangkok Mass Transit System Public Company Limited (BTSC) and Krungthep Thanakom Company Limited (KT) entered into a 30-year O&M Services Agreement of the Gold Line Project Phase 1 (Krung Thonburi BTS Station Khlong San District Office, 1.7km and 3 stations) for a total O&M value of approximately THB 13,520mn (inclusive of VAT). Moreover, in order to maintain continuity of service for the passengers and high standard of E&M works, BTSC has entered into a Sale and Installation of E&M Works Agreement on 27 February 2018, with a total value of approximately THB mn (inclusive of VAT). The commercial operation date for Gold Line Phase 1 is targeted in September August 2018: The first in a series of 22 4-carriage trains from Siemens was successfully delivered. At least 6 of the 4-carriage trains will be gradually delivered and ready for operation by early December in order to accommodate the increase in passengers on the existing Green Line network, as well as in the Southern Green Line extension, where full operation is targeted to begin in December Subsequently, on 1 August 2018 (VGI-W1 final exercise date), VGI received additional cash of THB 1.4bn, making total proceeds from the exercises of VGI-W1 of THB 8.6bn, or 72% of maximum proceeds. 2 The issuance of new warrants (BTS-W4) up to 1,755mn units, is calculated based on the assumption that all BTS-W3 warrants, BTS-WB warrants and BTS-WC warrants which are entitled to exercise are fully exercised, and hence the number of shares with the right to receive BTS-W4 will total 15,795.3mn shares. 2/10

3 1Q 2018/19 PERFORMANCE (THB mn) 1Q 2018/19 1Q 2017/18* % YoY Operating revenues 3,049 3,110 (2.0)% Other recurring revenues (59.2)% Total recurring revenues 3,114 3,269 (4.7)% Operating costs 1,579 1,832 (13.8)% Operating selling and administrative expenses (3.3)% Operating EBITDA 1, % Finance cost % Pre-tax recurring profit % Non-recurring items (85) 12 N.A. Earnings before tax (0.5)% Corporate income tax (35.1)% Minority interests % Recurring net income (loss) to equity holders of the parent % Net income (loss) to equity holders of the parent (4.4)% *includes performances from discontinued operation The Group reported total consolidated revenues from continued operation of THB 3,216mn in 1Q 2018/19. This represented an increase of 1.3% YoY or THB 41mn from THB 3,175mn in 1Q 2016/17. The revenue growth was chiefly attributed to (i) an increase in service income of THB 194mn mainly from higher revenue of our Media business, and (ii) growth in interest income of THB 134mn, chiefly from (a) receivables under an agreement with the government for the provision of E&M works and train procurement services for the Southern and Northern Green Line extensions and (b) loans to related parties. The revenue growth was partly offset by a decline in revenues from installation and construction services and train procurement services of THB 249mn, due mostly to reduced recognition of E&M revenue and the train procurement services revenue for the Southern and Northern Green Line extensions. Total consolidated expenses from continued operation amounted to THB 2,406mn in 1Q 2018/19, an increase of THB 171mn or 7.6% YoY largely from an increase in selling and administrative expenses of THB 388mn (which included a co-sponsorship expense of THB 100mn in this quarter for the World Cup s TV rights in Thailand). The increase in total expenses were partially offset by a decrease in cost of installation and construction services and train procurement services of THB 227mn, which were largely costs related to the provision of E&M works and the train procurement services for the aforesaid Southern and Northern Green Line extensions. Reported share of net profit from associates/jvs (including share of profit in BTSGIF) was THB 111mn (compared to THB 99mn in 1Q 2017/18). The YoY increase was mainly from a lower share of net loss from U City. Finance costs increased by 7.2% YoY or THB 21mn to THB 315mn, primarily from interest expense of THB 7bn BTSG debentures issued by BTSG in December 2017 and loans from financial institutions. As a result, pre-tax recurring profit (before minority interests) increased by THB 95mn or 15.9% YoY to THB 691mn. Recurring net profit (before minority interests) increased by THB 155mn or 36.5% YoY to THB 580mn. Recurring net profit (after minority interests of THB 108mn), stood at THB 472mn, an increase of 20.4% YoY or THB 80mn chiefly from the improvement in recurring gross profit, an increase in share of net profit from associates/jvs and lower corporate income tax, being partially offset by higher finance cost. Despite the growth in recurring net profit (after minority interests), profit attributable to the equity holders of the Company decreased by 4.4% YoY to THB 387mn, predominantly from higher non-recurring selling and administrative expenses and an increase in profit to non-controlling interests of subsidiaries. The net profit margin attributable to the equity holders of the Company in 1Q 2018/19 was 11.6% (versus 12.2% in 1Q 2017/18). 3/10

4 OPERATING REVENUE AND OPERATING GROSS PROFIT MARGIN BY BU Operating Revenue 3 (THB mn) 1Q 2018/19 % of Total 3 1Q 2017/18 % of Total 3 % Change (YoY) 1Q 2018/19 1Q 2017/18 GP Margin 8 GP Margin 8 Mass Transit 4 1, % 1, % (9.0)% 38.3% 32.9% Media 5 1, % % 26.8% 71.3% 65.4% Property % % (45.1)% 15.6% 35.3% Services % % (35.5)% N.A. 12.9% Total 3 3, % 3, % (2.0)% 48.2% 41.1% 3 Operating revenue from the operational performance of 4 BUs EXCLUDES non-mass transit related interest income, dividend income and non-recurring items 3 4 Mass Transit revenue includes: i) Share of net profit (loss) from BTSGIF (included in Share of profit (loss) from investments in associates in statement of comprehensive income) ii) Service Income from Train & Bus Operation Management (included in Service income under Revenues from provision of operating services ) and Interest Income from Train Procurement as well as Interest Income under purchase and installation of operating system agreement iii) Services Income from the provision of E&M works and the train procurement service 5 Media revenue includes performances of VGI Group and Rabbit Group. Rabbit group (classified to be under Digital Services Business) comprises of BSS & BSSH and subsidiaries but excludes two companies which are Bangkok Payment Solutions Co., Ltd. (BPS) and Rabbit Rewards Co., Ltd. (RR) 6 Property includes Sales from Real Estate, Rental and Service Income, Revenue from group of Hotels and Service income related to Thana City Golf & Sports Club Co., Ltd. 7 Services revenue includes revenue from Rabbit Rewards, BPS, HHT construction and ChefMan Restaurants (up to 3 August 2017). 8 Operating gross profit calculated based on the operational performance of 4 BUs 9 Operating EBITDA calculated based on the operational performance of 4 BUs EXCLUDES non-mass transit related interest income, dividend income, share of net profit (loss) from other associates (except from BTSGIF) and joint ventures and other non-recurring items Total operating revenue 3 in 1Q 2018/19 reached THB 3,049mn, a decrease of 2.0% YoY or THB 61mn. Revenues from the Mass Transit, Media, Property and Services businesses accounted for 59.5%, 35.3%, 2.6% and 2.6% of total operating revenue, respectively. The decline in operating revenue was largely as a result of lower Mass Transit, Property and Services operating revenues, which decreased by 9.0%, 45.1% and 35.5% YoY respectively. The decline was chiefly as a result of (i) the reduced recognition of E&M revenue and the train procurement services revenue for the Southern and Northern Green Line extensions, causing subsequently lower recognition of services revenue, (ii) the deconsolidation of Chef Man Group s business in 2Q 2017/18 and the deconsolidation of UE following the EBT of UE in 4Q 2017/18. Nevertheless, the decline in operating revenue was, however, partially offset by a 26.8% or THB 228mn YoY increase in revenue from the Media business, which was bolstered by a robust performance across all OOH business segments. Operating costs decreased by 13.8% YoY to THB 1,579mn primarily from lower cost recognition of the provision of E&M works and train procurement services for the aforesaid Southern and Northern Green Line extensions. As the decrease in total operating costs outweighed the decrease in total operating revenue, operating gross profit 8 grew 15.0% YoY to THB 1,470mn and operating EBITDA 9 rose by THB 212mn or 23.1% YoY to THB 1,128mn. As there was lower contribution from services income for the provision of E&M works and train procurement (which have lower margins), operating gross profit margin this quarter increased to 48.2% from 41.1% in the prior year and operating EBITDA margin increased to 37.0% from 29.5% in 1Q 2017/18. SEGMENTAL PERFORMANCE MASS TRANSIT BUSINESS Total Mass Transit revenue was THB 1,813mn, decreasing by 9.0% YoY or THB 180mn, primarily from the reduced recognition of E&M works and the train procurement services revenue for the Southern and Northern Green Line extensions, causing lower recognition of services revenue of THB 926mn (decreased from THB 1,224mn in the prior year). Nevertheless, this quarter we continued to record (i) an increase in interest income from train procurement and E&M provision, (ii) higher O&M revenue, and (iii) a growth in net profit from share of investment in BTSGIF. O&M revenue (excluding interest income from train procurement and E&M provision) rose by 4.4% YoY or THB 19mn to THB 452mn. The increase was mainly attributable to the contractually agreed increase in the operating fee of the existing Green Line Sukhumvit extension and Silom extension together with an additional operating fee of Samrong station (the first station of Southern Green Line extension which was opened in April 2017). Interest income from train procurement and E&M provision also rose from the previous year (up 148.7% YoY or THB 116mn) to THB 193mn. 4/10

5 % -50.0% BTS GROUP HOLDINGS PCL Core Network performance this quarter was affected by lower number of weekdays, as well as disruption of train services during June 2018, together being the main cause in the reduction of ridership by 1.5% YoY to 57mn trips. Nevertheless, the average fare continued to increase, rising by 3.9% YoY to THB 29.0 per trip, driving growth of 2.3% YoY to THB 1,659mn in quarterly farebox revenue. Given the aforesaid train services disruption, 6 free trips for monthly-pass ticket holders and 3 free trips for stored value ticket holders can be redeemed during the claimable period of 7-31 July As a result of this, a free-trip allowance of THB 19mn was deducted from farebox revenue this quarter, lowering the increase to 1.1% YoY and farebox revenue thereby at THB 1,640mn. The application of such an allowance, consequently affected the growth in share of net profit from investment in BTSGIF this quarter, which increased by 4.4% YoY to THB 227mn. More commentary on Core Network performance can be found in 1Q 2018/19 BTSGIF management discussion and analysis: Historical Ridership and % Growth Historical Average Fare and % Growth 7.1% 2.8% 0.8% -3.4% % 0.2% -1.5% -2.2% -1.0% -5.0% % -0.6% -0.2% -0.6% 3.2% 3.3% 3.9% 3.2% 0.4% 0.8% * 1Q 2017/18 2Q 2017/18 3Q 2017/18 4Q 2017/18 1Q 2018/19 1Q 2017/18 2Q 2017/18 3Q 2017/18 4Q 2017/18 1Q 2018/19 Ridership (mn trips) Passenger Growth (YoY) Passenger Growth (QoQ) Average Fare (THB/trip) Average Fare Growth (YoY) Average Fare Growth (QoQ) *Excluding the impact of free-trip allowance to passengers from train services disruption The decline in mass transit revenue was also reflected in costs, which decreased by THB 218mn to THB 1,120mn, largely from lower recognition in cost of services related to the provision of E&M works and train procurement services for the aforesaid Green Line extensions. The operating EBITDA margin increased to 38.7% from 33.3% in the previous year, as a result of the lower recognition of services revenue for the provision of E&M works and the train procurement services as aforementioned. Excluding the provision of E&M works and train procurement services, the operating EBITDA margin of the Mass Transit business would be 69.2%. MEDIA BUSINESS Our Media business posted impressed performance for the start of the fiscal year 2018/19 and maintained steady growth momentum from last year. Total Media revenue grew solidly by 26.8% YoY or THB 228mn in 1Q 2018/19 from THB 849mn in the previous year to THB 1,077mn. OOH Media includes Transit, Outdoor and Office Building and Other Media. OOH media contributed 93% of total Media revenue or THB 996mn. Revenue in the OOH media segment rose by 36.9% or THB 268mn YoY largely from synergies of O2O Solutions services, a higher utilisation rate, digital billboards products as well as the full quarter consolidation of Co-Mass Company Limited (Co-Mass) in the Outdoor media segment. Digital Services Business contributed 7% of total revenue or THB 81mn, decreasing by 33.5% YoY or THB 34mn as a result of a decrease in project management fees. As an increase in promotion and marketing activities and expenditures was recorded during this quarter, we recognised a share of net loss from investment in Rabbit LinePay (our joint venture) of THB 24mn (versus share of net loss of THB 20mn in 1Q 2017/18). 5/10

6 Media Revenue (THB mn) 1Q 2018/19 % of Total 1Q 2017/18 % of Total % Change (YoY) OOH media % % 36.9% Transit % % 26.0% Outdoor % % 67.4% Office & Other % % 39.1% Digital Services % % (33.5)% Total 1, % % 26.8% Cost of Sales increased by 5.1% YoY from THB 294mn to THB 309mn, primarily from costs related to the launch of 35 digital billboards and full year consolidation of Co-Mass by MACO. As a result of higher sales, improved operational efficiency and cost management, especially in OOH media business, operating EBITDA margin for our Media business in this quarter improved to 54.5% from 49.6% in the previous year. More commentary on Media business can be found in 1Q 2018/19 VGI Global Media s management discussion and analysis: PROPERTY BUSINESS Following completion of the EBT of UE to U City, the majority of the BTS s property business, including 3 hotels; U Sathorn, U Chiang Mai, U Inchantree Kanchanaburi, TST Tower office building, land and our 50% stake in the JV with Sansiri, were deconsolidated on 16 March The majority of BTS s property-related income is hence recognised as a share of net profit/ (loss) from U City (equity method). Nevertheless, certain assets remain directly held by the Company and these will continue to generate and contribute to BTS s property revenue. Total property operating revenue in 1Q 2018/19 decreased by 45.1% YoY to THB 80mn, which was primarily attributable to the deconsolidation of the aforementioned property business. Total operating costs decreased in tandem with the decline in operating revenue, reducing by 28.4% YoY or THB 27mn to THB 68mn. Commercial Property revenue in this quarter was THB 71mn, which now mainly comprises of revenue from Thana City Golf & Sports Club. The decrease of THB 70mn or 49.5% YoY in Commercial Property revenue was chiefly due to the deconsolidation of the 3 aforesaid hotels following the EBT of UE to U City. The Company recognised narrower share of net loss from investment in U City, our associate, of THB 8mn (compared to a share of net loss of THB 59mn in the previous year) mainly from the release of deferred gain according to transfer progress of Sansiri-JVs. Residential Property increased by 79.9% YoY or THB 4mn to THB 8mn from higher housing unit sales at Thana City. SERVICES BUSINESS 1Q 2018/19 Services business revenue was THB 79mn, mainly comprising of construction revenue generated from HHT Construction Company Limited (HHT) and services revenue from Bangkok Payment Solutions Company Limited (BPS). Services business revenue decreased by THB 43mn or 35.5% YoY as a result of the deconsolidation of Chef Man Group s businesses since 2Q 2017/18. Operating costs decreased by 21.9% YoY or THB 23mn to THB 83mn and SG&A expenses amounted to THB 25mn, a decrease of THB 55mn or 69.0% YoY. This was in-line with the aforesaid reasons. 6/10

7 \ BTS GROUP HOLDINGS PCL Share of Income / (Loss) from Investments in Joint Ventures & Associates (THB mn) 1Q 2018/19 1Q 2017/18* 1Q 2018/19 share of net profit/ (loss) breakdown by BU Share of income/ (loss) from investments in joint ventures (90) (183) Bayswater (64) (52) Rabbit Line Pay (24) (20) Chefman (13) - SPV AEON-Rabbit 9 2 Media s JV 2 - Sansiri JV - (113) Share of income/ (loss) from investments in associates BTSGIF Media s associates (17) 9 U City (8)** (59) AHS - 1 (THB mn) (30) (73) (13) Mass Transit Media Property Services Total *includes performances from discontinued operation **After Purchase Price Allocation (PPA) adjustment and deferred gain FINANCIAL POSITION (THB mn) (THB mn) 106, , , ,467 21,278 23,674 Total current assets 22,923 24,918 Total current liabilities 84,980 86,793 Total non-current assets 36,971 37,038 Total non-current liabilities Total shareholders' equity 46,364 48, Mar Jun Mar Jun 18 Total assets as of 30 June 2018 stood at THB 110,467mn, an increase of THB 4,209mn or 4.0% from 31 March The increase was primarily attributed to (i) an increase in receivable from the exercise of VGI-W1 from other parties of THB 1,743mn on 29 June 2018, (ii) an unbilled receivables under agreements with government authorities and an increase in receivable under purchase and installation of operating systems agreement of THB 1,096mn from the provision of E&M works and train procurement for the Southern and Northern Green Line extensions as well as (iii) an increase in other long term investments of THB 624mn and (iv) an increase in trade and other receivables of THB 230mn. The increase, however, was partially offset by (v) a decrease in cash & cash equivalents of THB 4,884mn (see cash movement in Cash Flow section). Total liabilities increased from 31 March 2018 by 3.4% or THB 2,061mn to stand at THB 61,955mn largely due to (i) an increase in net loans from financial institutions of THB 6,532mn, (ii) an increase in income tax payable of THB 403mn mainly from tax payable of the Company from gain on sales of investments in subsidiary, but partially offset by a decrease in (iii) bills of exchange payables of THB 4,218mn, and (iv) a reduction in trade and other payables of THB 973mn. Total equity increased from 31 March 2018 by THB 2,148mn or 4.6% YoY to THB 48,512mn, mainly from an increase in non-controlling interests in subsidiaries of THB 2,101mn, of which, chiefly from (i) an increase in non-controlling interests of VGI s group of THB 2,062mn as a result of an increase in VGI s shareholder equity following the exercise of its warrants and (ii) an increase in profit to non-controlling interests of the subsidiaries of THB 103mn, which was largely from the improving overall performance of VGI s group. As of 30 June 2018, 7/10

8 total issued and fully paid-up shares of BTS Group stood at 11,845.2mn shares. Return on equity for 1Q 2018/19 was 10.1%, which increased from 4.3% in 1Q 2017/18. CASH FLOW For 3-month ended 30 June 2018, cash and cash equivalents stood at THB 4,574mn, a decrease of 51.6% or THB 4,884mn. Cash used in operating activities was THB 1,606mn (versus cash from operating activities of THB 676mn in 1Q 2017/18). This was derived from profit before tax of THB 606mn, being partially offset by (i) non-cash reconciling items of THB 187mn and (ii) changes in net working capital of THB 2,025mn, chiefly from (i) an investment in E&M works and trains procurement for the Southern and Northern Green Line extensions of THB 1.5bn and (ii) an advance payment for civil works and E&M works of the Pink and Yellow lines of THB 228mn. After deducting net cash paid for corporate income tax of THB 56mn (1Q 2017/18: THB 60mn) and net cash paid for interest expenses of THB 448mn (1Q 2017/18: THB 359mn), net cash used in operating activities was THB 2,110mn. Net cash used in investing activities was THB 5,703mn. The key components were (i) cash paid by BTSG and BTSC to exercise VGI-W1 on 29 June 2018 of THB 5,377mn, (ii) net cash paid for acquisitions of current and other-long term investments of THB 747mn, (iii) dividend income of THB 437mn and (iv) interest income of THB 208mn Net cash from financing activities was THB 2,896mn. The key components were (i) a net increase in loans from financial institutions and bills of exchange of THB 2,255mn, and (ii) net cash received mainly from sales of VGI of THB 665mn. 3 months Cash Flow Snapshot (THB mn) 9,458 (2,110)* (5,703) 2, ,574** Beginning cash (31/3/18) CFO CFI CFF Others Ending cash (30/6/18) * After corporate income tax of THB 56mn, interest expenses of THB 448mn and investment in E&M works and train procurement for the Southern and Northern Green Line extensions of THB 1.5bn and an advance payment for civil works and E&M works of the Pink and Yellow lines of THB 228mn. ** Excluding liquid investments and cash to be received from clearing house - share subscription of subsidiary of THB 26.2bn 8/10

9 KEY FINANCIAL RATIOS Profitability ratios 1Q 2018/19 1Q 2017/18* 4Q 2017/18 Gross operating profit margin (%) 48.2% 41.1% 46.2% Operating EBITDA margin (%) A 37.0% 29.5% 32.3% Recurring pre-tax profit margin (%) B 22.2% 18.3% 29.2% Net profit margin (%) C 11.6% 12.2% 41.1% ROA (%) D 4.6% 2.4% 4.8% ROE (%) E 10.1% 4.3% 10.5% Liquidity ratio Current ratio (times) 0.95x 1.39x 0.93x Leverage ratios Interest bearing debt to equity (times) 1.02x 0.92x 1.02x Adjusted net debt F to equity (times) 0.39x 0.10x 0.37x Adjusted net debt F to recurring EBITDA (times) 3.23x 1.21x 3.02x Interest coverage (times) G 3.58x 3.12x 3.71x Per share ratios H Basic earnings per share (THB) Book value per share (THB) Note: * Includes performances from discontinued operation A Excludes non-operating items and interest income B Calculated based on pre-tax recurring profit / total recurring revenue C Calculated based on accounting net profit (after MI) / total accounting revenue including shares of income / (loss) from investments in associates and JVs and gross revenue under profit from discontinued operation for the period D Calculated based on accounting net profit / total average assets E Calculated based on accounting net profit / total average shareholders equity F Calculated based on interest bearing debt - cash and cash equivalent and liquid investment - cash to be received from clearing house-share subscription of subsidiary G Calculated based on operating EBITDA / finance cost H Calculated based on weighted average number of shares at par value of THB 4.0 per share 9/10

10 MANAGEMENT OUTLOOK Our Mass Transit business, during June to August 2018 saw a number of developments that firmly signaled progress in this unit. The first of which was the Notice-to-Proceed (NTP) of the Pink and Yellow lines being issued on 29 June, marking the start of a 39-month construction period to completion. The full operation of these two main lines are expected to begin in October The Southern Green line extension (Samrong - Samutprakarn) is currently at the tail-end stage of electrical and mechanical works (E&M) construction and is expected to begin its full operation in December While the Northern Green line (Mo Chit - Khu Kot) civil works are 69.3% completed (as of July 2018) and is targeted to commence operations of the first station (N9) at Ladprao Intersection in mid 2019 and full operations in mid The first in a series of 4-carriage new trains from Siemens arrived on 5 August. A minimum of six 4-carriage trains will be gradually delivered and ready for operation by early December in order to accommodate the increase in passengers for the existing Green Line network as well as in the Southern Green Line extension. On 18 June, the Company bought Terms-of-Reference (TOR) of the 220km High Speed Rail project that connects 3 main airports (Don Mueang, Suvarnabhumi and U-Tapao). We are currently studying its feasibility in preparation for a potential bid. The bid submission date is set on 12 November and the winning bids are expected to be announced by the end of On 31 July, BTSC and KT entered into a 30- year Operation and Maintenance (O&M) Services Agreement of the Gold Line Project Phase 1 (Krung Thonburi BTS Station Khlong San District Office), totalling 1.7km and 3 stations. Moreover, BTSC also entered into the Sale and Installation of E&M Works Agreement in order to maintain the continuity of service for the passengers and the good standard of E&M works. Commercial operation date for Gold Line phase 1 is targeted in September Within our Media business, VGI posted solid performance for the start of the fiscal year 2018/19, steadily continuing the growth trend established in the last few quarters. During the quarter, VGI reported an increase in revenue from THB 849mn to THB 1,077mn, or an increase of 27% YoY. For 2018/19 as a whole, VGI maintains its revenue target in the range of THB 4,400mn to THB 4,600mn and expects the net profit margin of 20 25%. Furthermore, VGI received total proceeds from the exercise of VGI-W1 of THB 8.6bn or 72% of maximum proceeds. Of this, BTSG and BTSC paid THB 5.4bn for this exercise. The cash received by VGI was utilised for the acquisition of Kerry TH, while the remaining balance is expected to be used for the subscription of shares in the announced rights offering of MACO and expansion of the digital and online-related businesses. In our Property business, U City, our designated property vehicle, will continue to prudently manage its operating assets, especially its hotels as it enters into the higher seasons of the later period of the year and continue to recognise a sizeable backlog of condominium projects for the remainder of the year. U City also expects to make further progress on its remaining THB 2.3bn in assets to be divested during 2H Rangsin Kritalug (Executive Director and Chief Operating Officer) 10/10