Electricity Generating PCL : 12 November 2018 Management Discussion and Analysis Quarter 3 Ending 30 Sep 2018

Management Discussion and Analysis

For the Financial Result of Quarter 3 Year 2018

Ended September 30, 2018

Note: This Management Discussion and Analysis (MD&A) was made to disclose information and the vision of the management in order to assist investors to better understand the company's financial status and operation. It also supports the "Good Corporate Governance Project" of the Securities and Exchange Commission (SEC).

An English version of the MD&A has been prepared from the Thai version. In the event of a conflict or a difference in interpretation between the two languages, the Thai version shall prevail.

The objective of this MD&A is to present the information and the explanation of financial status and operating results as of the date hereof. However, the information provided in this MD&A may vary if any factors or situation are changed in the future; the investors are, therefore, required to have their own discretion regarding the usage of this information for any purpose. For further detail, please contact Investor Relations Section of the Electricity Generating Public Company Limited at Tel: [phone] or Email:[e-mail]

Management Discussion and Analysis

1. Significant events in the third Quarter of 2018

•  The progress in construction projects

  • - Xayaburi Project, a project of the Xayaburi Power Company Limited, (EGCO holds a 12.50% ownership interest.), is a hydro power plant project, Run-of-River. The project is located in the Laos People's Democratic Republic (Laos PDR). The project has entered into the PPA with EGAT with the contracted capacity of 1,220 MW and Electricite De Laos (EDL) with the contracted capacity of 60 MW for 29 years. The construction of the project has progressed 96.36% (The construction plan was 97.00%). The commercial operation date is scheduled in the fourth quarter of 2019.

  • - SBPL Project, a project of San Buenaventura Power Ltd., Co., (EGCO holds a 49% ownership interest.), is a 500 MW supercritical coal-fired power plant, in Mauban, Quezon province of the Philippines. 455 MW of the plant's capacity and energy are contracted to the Manila Electric Company (MERALCO) pursuant to a 20 years power supply agreement which is extendable for up to an additional 5 years. The construction of the project has progressed 93.69% (The construction plan was 92.41%). The commercial operation date is scheduled in the fourth quarter of 2019.

  • - NT1PC Project, a project of Nam Theun 1 Power Company Limited (EGCO holds a 25% ownership interest.), is a hydro power plant project. The project is located on Nam Kading River in Bolikhamxay, Laos PDR. The project has entered into the PPA with EGAT with the contracted capacity of 514 MW and EDL with the contracted capacity of 130 MW for 27 years. The construction of the project has progressed 39.87% (The construction plan was 53.47%). The commercial operation date is scheduled in the second quarter of 2022.

2. Business overview

EGCO Group have invested in the Independent Power Producer (IPP), Small Power Producer (SPP), Very Small Power Producer (VSPP), Coal Mining, Operating and Maintenance (O&M), Management and Administrative Services (Management Services). Details as at September 30, 2018 of each plant are as follows:

(1) Subsidiaries which can be categorized into 2 businesses:

1. Power Generation

1.1 Local power generation

Khanom Electricity Generating Co., Ltd. (KEGCO)	IPP
EGCO Cogeneration Co., Ltd. (EGCO Cogen)	SPP
Roi-Et Green Co., Ltd. (RG)	SPP
Banpong Utilities Co., Ltd. (BPU)	SPP
Klongluang Utilities Co., Ltd. (KLU)	SPP
Chaiyaphum Wind Farm Co., Ltd. (CWF)	SPP
SPP Two Co., Ltd. (SPP 2)	VSPP
SPP Three Co., Ltd. (SPP 3)	VSPP
SPP Four Co., Ltd. (SPP 4)	VSPP
SPP Five Co., Ltd. (SPP 5)	VSPP
Yanhee EGCO Holding Co., Ltd. (Yanhee EGCO)	Holding Co.
 Solarco Company Limited (Solarco)	VSPP
Theppana Wind Farm Co., Ltd. (TWF)	VSPP
EGCO Plus Co., Ltd. (EGCO Plus)	Holding Co.
1.2 Overseas Power Generation
Quezon Power (Philippines) Limited Co. (Quezon)
Boco Rock Wind Farm Pty Ltd. (BRWF)
2. Other businesses
2.1 Local Other Businesses
EGCO Engineering and Service Co., Ltd. (ESCO)	O&M
2.2 Overseas Other Businesses
Pearl Energy Philippines Operating Inc. (PEPOI)	O&M
Quezon Management Service Inc. (QMS)	Management
Services

• (2) Associated in overseas power generation business

  Star Energy Geothermal Pte. Ltd. (SEG)

  Star Energy Geothermal (Salak - Darajat) B.V. (SEGSD)

• (3) Joint Ventures which can be categorized into 2 businesses:

  • 1. Power Generation

    1.1 Local power generation

    Gulf Electric Public Company Limited (GEC)

    •  Gulf Cogeneration Co., Ltd. (GCC)

    •  Nong Khae Cogeneration Co., Ltd. (NKCC)

    •  Samutprakarn Cogeneration Co., Ltd. (SCC)

    •  Gulf Yala Green Co., Ltd. (GYG)

    •  Gulf Power Generation Co., Ltd (GPG)

    BLCP Power Limited (BLCP)

    Natural Energy Development Co., Ltd. (NED) G-Power Source Co., Ltd. (GPS)

    1.2 Overseas power generation

    Nam Theun 2 Power Co., Ltd. (NTPC)

    San Buenaventura Power Ltd. Co. (SBPL)

    Nam Theun 1 Power Co., Ltd. (NT1PC)

  • 2. Others businesses

    •  Overseas Other Business

    PT Manambang Muara Enim Co., Ltd. (MME)

• (4) Other investments

  •  Xayaburi Power Company Limited (XPCL)

Holding Co. SPP

SPP SPP SPP IPP IPP

SPP & VSPP VSPP

Coal MiningAs of September 30, 2018, EGCO Group's portfolio consists of 26 operating power plants, with a total contracted capacity of 4,260 MW equity and 3 construction projects, with a total contracted capacity of 544 MW equity.

3. Report and Analysis of the Operating Results

EGCO would like to present analysis of the operating results as follows:

Summary of operating results for Q3/2018, Ended of September 30, 2018

Unit: Million Baht

Power Generation

Others

Total

Change Increase (Decrease)Quarter 3

Quarter 3

Quarter 3

Quarter 3

2018	2017	2018
Total Revenues	10,140	8,600	203
Total Expenses	(9,082)	(7,760)	(180)
Share of Profit (Loss)	1,446	2,127	22	25	1,468
Profit (Loss) before the effects of
foreign exchange, deferred income tax,	2,504	2,967	45	50	2,549
and lease income
Deferred income (expense) tax	22	(13)	-	-	22
Profit (Loss) before the effects of
2,526	2,954	45	50	2,571
					foreign exchange and lease income
Profit (Loss) from foreign exchange	2,004	656	-	-	2,004
Net profit (Loss) before the impact of
4,530	3,610	45	50	4,575
					lease income
Impact of lease income	(628)	(143)	-	-	(628)
Net Profit (Loss)	3,902	3,467	45	50	3,947

2017

2017	Amount	%
183 10,343	8,783	1,560	18%
(158) (9,262)	(7,918)	1,344	17%
2,152	(684)	(32%)
3,017	(468)	(16%)
(13)	35	100%
3,004	(433)	(14%)
656	1,348	100%
3,660	915	25%
(143)	(485)	(100%)
3,517	430	12%

2018

To focusing on the operating performance, the impacts of lease income were excluded from the analysis of the operating result.

The operating profit of EGCO Group before the effects of foreign exchange, deferred income tax, impairment and lease income for Q3/2018 were 2,549 million Baht, decreasing by 468 million Baht comparing to Q3/2017, which came from a decrease in power generation business of 463 million Baht and a decrease in other business of 5 million Baht. See more details in 3.1 and 3.2 as follows;