Airports of Thailand Public : Management Discussion and Analysis Yearly Ending 30 Sep 2021

Ref. No. 16258

22 November 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 year ended September 30th, 2021

Overall performance and significant events

The overall air traffic volume of Airports of Thailand Public Company Limited (AOT) from October 2020 to September 2021 significantly decreased compared to the corresponding period of the prior year. This is due to the pandemic situation of the Coronavirus Disease 2019 (COVID-19) since the beginning of the year 2020 which affected travel in and out of Thailand and all over the world. Furthermore, the intensified and widespread COVID-19 pandemic has severely affected the aviation and tourism industry due to international air travel restrictions. With several repeating waves in the country, the government issued strict travel restrictions to control the pandemic. As a result, the number of flights and passengers dramatically decreased. Subsequently, the Civil Aviation Authority of Thailand (CAAT) issued the announcement on guidelines for airport operators and domestic flight operations during the COVID-19 pandemic situation No.5 to allow airlines and airports to resume their operation from September 1st, 2021, onwards until the aforementioned situation ends or there are other announcements which result in a positive effect on the aviation industry, tourism and the overall economy of the country.

AOT has been aware of the impact of the COVID-19 pandemic affecting the operation and liquidity of the concessionaires and airlines which are our trading partners at six airports under AOT's responsibility whereby AOT has continuously imposed relief measures to facilitate their business. Recently, at AOT Board of Director's meeting on August 25th, 2021, approved measures

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to help airlines by postponing the payment of landing and parking charges and aircraft service charge for the payment due from April to December 2021 for further 9 months each and allowing the installment payment to a maximum of 12 months for the airlines affected by the pandemic in response to their request submitted to AOT. However, the assistance measures must be in accordance with the terms and conditions prescribed by AOT.

The air traffic volume for the year ended September 30th, 2021 of the six airports under AOT's responsibility decreased by 52.35% or 245,458 flights compared to that of the corresponding period of the prior year, comprising 67,018 international flights and 178,440 domestic flights. The total number of passengers decreased by 72.45% or 20.01 million compared to that of the corresponding period of the prior year, comprising 0.95 million international passengers and 19.06 million domestic passengers.

In 2021, AOT's operating results decreased by Baht 20,642.69 million compared to, the corresponding period of the prior year of which net profit was Baht 4,320.68 million. Total revenues decreased by Baht 25,295.48 million and, total expenses decreased by Baht 1,740.76 million.

In addition, income tax revenues increased by Baht 5,211.21 million which was in line with a decrease in operating results.

1. Analysis of operations
1.1 Operating results for the year ended September 30th, 2021
				Unit: Million Baht
	2021	2020		Increase		% YoY
				(decrease)
Revenues from sales or services	7,085.60	31,179.10		(24,093.50)		(77.27)
Aeronautical revenue	2,328.69	16,625.69		(14,297.00)		(85.99)
Portion	33%	53%
Non-aeronautical revenue	4,756.91	14,553.41		(9,796.50)		(67.31)
Portion	67%	47%
Other income	752.84	1,954.82		(1,201.98)		(61.49)
Total revenues	7,838.44	33,133.92		(25,295.48)		(76.34)
LessTotal expenses	25,410.38	27,151.14		(1,740.76)		(6.41)
Operating profit (loss)	(17,571.94)	5,982.78		(23,554.72)		(393.71)

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1.1 Operating results for the year ended September 30th, 2021 (cont'd)

Unit: Million Baht

2021 2020 Increase % YoY (decrease)

LessShare of loss from investment in
associate	0.09	-	0.09	100.00
LessFinance cost	2,973.00	646.20	2,326.80	360.07
Profit (loss) before income tax	(20,545.03)	5,336.58	(25,881.61)	(484.98)
LessIncome tax expenses (revenues)	(4,173.17)	1,038.04	(5,211.21)	(502.02)
Net profit (loss) for the year	(16,371.86)	4,298.54	(20,670.40)	(480.87)
Profit (loss) attributable to:
Equity holders of the Company	(16,322.01)	4,320.68	(20,642.69)	(477.76)
Non-controlling interests of the
subsidiaries	(49.85)	(22.14)	(27.71)	(125.16)
Earnings (loss) per share (Baht)	(1.14)	0.30	(1.44)	(480.00)

For the year ended September 30th, 2021, AOT had net loss of Baht 16,322.01 million, while net profit of the corresponding period of the prior year was Baht 4,320.68 million. Revenue from sales or services decreased by Baht 24,093.50 million or 77.27% as a result of a decrease in aeronautical revenue of Baht 14,297.00 million or 85.99% and non-aeronautical revenue of Baht 9,796.50 million or 67.31% because of the decline in the number of flights and passengers. Other income decreased by Baht 1,201.98 million or 61.49%. Total expenses decreased by Baht 1,740.76 million or 6.41% mainly due to a drop in state property rental, outsourcing expenses and repairs and maintenance while depreciation and amortisation expenses increased. In addition, finance cost increased by Baht 2,326.80 million or 360.07% due to an increase in interest expenses on lease liabilities. Income tax revenues increased by Baht 5,211.21 million or 502.02%, which was in line with a decrease in operating results.

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	1.2 Aeronautical Revenue
					Unit: Million Baht
		2021		2020	Increase	%YoY
					(decrease)
	Landing and parking charges	987.04		3,788.81	(2,801.77)	(73.95)
	Departure passenger service charges	1,140.89		12,351.29	(11,210.40)	(90.76)
	Aircraft service charges	200.76		485.59	(284.83)	(58.66)
	Total	2,328.69		16,625.69	(14,297.00)	(85.99)
2021			2020

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

For the year ended September 30th, 2021, aeronautical revenue of Baht 2,328.69 million decreased by Baht 14,297.00 million or 85.99% compared to that of the corresponding period of the prior year because departure passenger service charges reduced by Baht 11,210.40 million or

90.76% due to a 72.45% decline in the number of passengers in the six airports. Moreover, landing and parking charges decreased by Baht 2,801.77 million or 73.95% because of a 52.35% decline in the number of flights. The main reason is the COVID-19 pandemic situation since the beginning of 2020 which has been intensified and the severity is likely to persist due to the mutation of a virus affecting the travel in and out of Thailand. Moreover, AOT established assistance measures to help airlines by giving a discount for the service charges.

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1.3 Non-Aeronautical Revenue

			Unit: Million Baht
	2021	2020	Increase	%YoY
			(decrease)
Office and state property rents	1,436.52	1,838.38	(401.86)	(21.86)
Service revenues	1,946.31	4,550.26	(2,603.95)	(57.23)
Concession revenues	1,374.08	8,164.77	(6,790.69)	(83.17)
Total	4,756.91	14,553.41	(9,796.50)	(67.31)
2021		2020

A proportion of non-aeronautical revenue in each type in FY 2021 differed from that of the corresponding period of the prior year. The majority of non-aeronautical revenue came from service revenues.

For the year ended September 30th, 2021, non-aeronautical revenue of Baht 4,756.91 million decreased by Baht 9,796.50 million or 67.31% compared to that of the corresponding period of the prior year due to a decline in concession revenues of Baht 6,790.69 million or 83.17% in line with a decrease in the number of passengers and service recipients in the airports. Service revenues decreased by Baht 2,603.95 million or 57.23% mainly due to a decline in advance passenger processing service fees. This is mainly because of the COVID-19 pandemic since the beginning of 2020 which has been intensified and the severity is likely to persist due to the mutation of a virus, resulting in a decrease in the number of passengers and service recipients. Besides, AOT has assistance measures to help the concessionaires who have been affected by the crisis.