Airports of Thailand : Management Discussion and Analysis Quarter 2 Ending 31 Mar 2021

Ref. No. 6501

13 May 2021

Subject: Management Discussion and Analysis of business operation and financial statements

To: President,

The Stock Exchange of Thailand

Airports of Thailand Public Company Limited and its subsidiaries Management discussion and analysis of business operation and financial statements

for the three-month and six-month periods ended March 31st, 2021

Overall performance and significant events

The overall air traffic volume of Airports of Thailand Public Company Limited (AOT) from October 2020 to March 2021 significantly decreased compared to the corresponding period of the prior year. The Coronavirus Disease 2019 (COVID-19) pandemic across the globe, including the new wave and the recurrent pandemic in some countries, has resulted in a drastic decrease of the number of flights and passengers. As a result, AOT revised the forecast of air traffic volume for the fiscal years from 2021 to 2024. Based on the assessment of the impact of the COVID-19 pandemic, if Thailand reopens its borders under the assumption that vaccine is provided across the globe as planned, the passenger will gain the confidence to travel, and thus the air traffic volume is expected to return to the same level as that of the fiscal year 2019 by the fiscal year 2023. However, in the event that Thailand reopens its borders later than January 2022 because under the assumption that the vaccination is delayed due to side effects, disease mutation, manufacture issue, logistics and distribution, and others, the air traffic volume is expected to return to the same level as that of the fiscal year 2019 by the fiscal year 2024. The government has continuously imposed measures to alleviate and recover the Thai economy, including the procurement of the COVID-19 vaccine. In the current situation Thailand has a certain amount of the vaccines on hand, and target groups have been gradually vaccinated since the end of February 2021. However, how fast the positive results of the vaccination will gain tourists and customers' confidence, and the economic recovery depends on the duration and efficiency of the vaccine distribution system to the world and Thai population, as well as the quality of and limitations on the COVID-19 vaccine.

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In the current situation, AOT continuously imposes measures to assist concessionaires and airlines affected by the COVID-19 to reflect the air traffic volume for each airport, defer the compensation payment, rental fees, and service charges to concessionaires and airlines affected by the COVID-19 pandemic at six airports under AOT's responsibility to lessen their burden during the crisis period. However, the assistance measures must be in accordance with the terms and conditions prescribed by AOT.

During the six-month period ended March 31st, 2021, the air traffic volume of the six airports under AOT's responsibility decreased 59.62% or 167,294 flights compared to the corresponding period of the prior year, comprising 31,475 international flights and 135,819 domestic flights. The total number of passengers decreased 75.24% or 15.78 million compared to the corresponding period of the prior year, comprising 0.40 million international passengers and 15.38 million domestic passengers.

During the second quarter of FY 2021 (January 1st, 2021 - March 31st, 2021) AOT incurred net loss of Baht 3,644.08 million while net profit of the corresponding period of the prior year was Baht 3,647.64 million. Total revenues decreased by Baht 10,267.86 million, total expenses decreased by Baht 1,689.57 million and income tax expense decreased by Baht 1,857.41 million which was in line with a decrease in operating results.

1. Analysis of operations

1.1 Operating results for the three-month period ended March 31st, 2021

Unit: Million Baht

	Q2/2021	Q2/2020	Increase	% YoY
			(decrease)
Revenues from sales or services	1,777.60	11,902.10	(10,124.50)	(85.06)
Aeronautical revenue	572.37	6,742.66	(6,170.29)	(91.51)
Portion	32%	57%
Non-aeronautical revenue	1,205.23	5,159.44	(3,954.21)	(76.64)
Portion	68%	43%
Other income	270.31	413.67	(143.36)	(34.66)
Total revenues	2,047.91	12,315.77	(10,267.86)	(83.37)
LessTotal expenses	5,878.23	7,567.80	(1,689.57)	(22.33)
Profit (loss) from operating	(3,830.32)	4,747.97	(8,578.29)	(180.67)

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1.1 Operating results for the three-month period ended March 31st, 2021 (cont'd)

Unit: Million Baht

	Q2/2021	Q2/2020	Increase	% YoY
			(decrease)
LessShare of loss from investment in
associate	0.03	-	0.03	100.00
LessFinance cost	742.82	166.10	576.72	347.21

Profit (loss) before income tax	(4,573.17)	4,581.87	(9,155.04)	(199.81)
LessIncome tax expenses (revenues)	(923.13)	934.28	(1,857.41)	(198.81)
Net profit (loss) for the period	(3,650.04)	3,647.59	(7,297.63	(200.07)
Profit (loss) attributable to:
Equity holders of the Company	(3,644.08)	3,647.64	(7,291.72)	(199.90)
Non-controlling interests of the
subsidiaries	(5.96)	(0.05)	(5.91	(11,820.00)
Earnings (loss) per share (Baht)	(0.26)	0.26	(0.52)	(200.00)

For the three-month period ended March 31st, 2021, AOT had net loss of Baht 3,644.08 million, while net profit of the corresponding period of the prior year was Baht 3,647.64 million. Revenue from sales or services decreased by Baht 10,124.50 million or 85.06% as a result of a decrease in aeronautical revenue of Baht 6,170.29 million or 91.51% and non-aeronautical revenue of Baht 3,954.21 million or 76.64% because of the decline in the number of flights and passengers. Other income decreased by Baht 143.36 million or 34.66%. Total expenses decreased by Baht 1,689.57 million or 22.33% mainly due to a drop in state property rental and outsourcing expenses. However, finance cost increased by Baht 576.72 million or 347.21% due to an increase in interest from lease liabilities. Income tax decreased by Baht 1,857.41 million or 198.81%, which was in line with a decrease in operating results.

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1.2 Operating results for the six-month period ended March 31st, 2021

Unit: Million Baht

		Oct'20 -		Oct'19 -	Increase		% YoY
		Mar'21		Mar'20	(decrease)
Revenues from sales or services	3,953.88		28,006.78	(24,052.90)		(85.88)
	Aeronautical revenue	1,462.28	15,748.22	(14,285.94)		(90.71)
	Portion	37%		56%
	Non-aeronautical revenue	2,491.60		12,258.56	(9,766.96)		(79.67)
	Portion	63%		44%
Other income	834.16	1,425.75	(591.59)		(41.49)
Total revenues	4,788.04	29,432.53	(24,644.49)	(83.73)
LessTotal expenses	12,265.76		15,319.80	(3,054.04)		(19.94)
Profit (loss) from operating	(7,477.72)		14,112.73	(21,590.45)		(152.99)
LessShare of loss from investment in
	associate	0.03	-	0.03	100.00
LessFinance cost	1,491.21	343.72	1,147.49		333.84
Profit (loss) before income tax	(8,968.96)		13,769.01	(22,737.97)		(165.14)
LessIncome tax expenses (revenues)	(1,867.67)		2,772.74	(4,640.41)		(167.36)
Net profit (loss) for the period	(7,101.29)		10,996.27	(18,097.56)		(164.58)
Profit (loss) attributable to:
	Equity holders of the Company	(7,086.06)		10,982.36	(18,068.42)		(164.52)
	Non-controlling interests of the	(15.23)		13.91	(29.14)		(209.49)
	subsidiaries
Earnings (loss) per share (Baht)	(0.50)		0.77	(1.27)		(164.94)

For the six-month period ended March 31st, 2021, AOT had net loss of Baht 7,086.06 million, while net profit of the corresponding period of the prior year was Baht 10,982.36 million. Revenue from sales or services decreased by Baht 24,052.90 million or 85.88 % as a result of a decrease in aeronautical revenue of Baht 14,285.94 million or 90.71% and non-aeronautical revenue of Baht 9,766.96 million or 79.67% because of the decline in the number of flights and passengers. Other income decreased by Baht 591.59 million or 41.49%. Total expenses decreased by Baht

3,054.04 million or 19.94% mainly due to a drop in state property rental and outsourcing expenses.

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However, finance cost increased by Baht 1,147.49 million or 333.84% due to an increase in interest from lease liabilities. Income tax decreased by Baht 4,640.41 million or 167.36%, which was in line with a decrease in operating results.

1.3 Aeronautical Revenue

Unit: Million Baht

	For the three-month period	For the six-month period
	Q2/2021	Q2/2020	Increase	%YoY	Oct'20 -	Oct'19 -	Increase	%YoY
			(decrease)		Mar'21	Mar'20	(decrease)
Landing and
parking charges	245.66	1,584.01	(1,338.35)	(84.49)	531.07	3,495.03	(2,963.96)	(84.80)
Departure
passenger
service charges	273.68	4,965.11	(4,691.43)	(94.49)	805.20	11,844.27	(11,039.07)	(93.20)
Aircraft service
charges	53.03	193.54	(140.51)	(72.60)	126.01	408.92	(282.91)	(69.18)
Total	572.37	6,742.66	(6,170.29)	(91.51)	1,462.28	15,748.22	(14,285.94)	(90.71)
	Q2/2021			Q2/2020

A proportion of aeronautical revenue in each type of the second quarter of FY 2021 differed significantly from that of the corresponding period of the prior year. The majority of aeronautical revenue arose from departure passenger service charges and landing and parking charges.