Ratch : MD&A Q2/2022

RATCH Group Public Company Limited Management Discussion and Analysis

For the Three-month and Six-month Periods Ended 30 June, 2022

	Management Discussion and Analysis
	For the Three-month and Six-month Period Ended 30 June, 2022
Abbreviation
The Company	RATCH Group Public Company Limited
The Group	RATCH Group Public Company Limited and its subsidiaries
EGAT	Electricity Generating Authority of Thailand
COD	Commercial Operation Date
EBITDA	Earnings before Interest, Tax, Depreciation and Amortization
FX	Foreign Exchange Rate
IPP	Independent Power Producer
PPA	Power Purchase Agreement
SPP	Small Power Producer

Projects/Companies

BAFS	Bangkok Aviation Fuel Services Public Company Limited, a direct associate in proportion of
	15.53 percent
FRD	Fareast Renewable Development Pte. Ltd., RHIS in proportion of 90 percent
HKP	Hin Kong Power Company Limited, a direct joint venture in proportion of 51 percent
HPC	Hongsa Power Company Limited, an indirect joint venture in proportion of 40 percent
NNEG	Nava Nakorn Electricity Generating Company Limited, an indirect joint venture in proportion of
	40 percent
NRER	Nexif Ratch Energy Rayong Company Limited, an indirect joint venture wholly-owned by NRES
NRES	NEXIF RATCH ENERGY SINGAPORE PTE LTD, a direct joint venture in proportion of 49
	percent
PNPC	Xe-PianXe-Namnoy Power Company Limited, a direct joint venture in proportion of 25 percent
RAC	RATCH-Australia Corporation Pty Ltd, a wholly-owned indirect subsidiary
RCO	RATCH Cogeneration Company Limited, a subsidiary in proportion of 99.97 percent
RG	Ratchaburi Electricity Generating Company Limited, a wholly-owned subsidiary
RHIS	RH International (Singapore) Corporation Pte Ltd, a wholly-owned indirect subsidiary
RIAU	PT Medco Ratch Power RIAU, an indirect joint venture in proportion of 49 percent
RL	RATCH-Lao Services Company Limited, a wholly-owned subsidiary
SCG	Sahacogen (Chonburi) Public Company Limited, a subsidiary in proportion of 51.67 percent
Yandin	Yandin WF Holding Pty Ltd., an associate in proportion of 70 percent by RAC

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Management Discussion and Analysis

For the Three-month and Six-month Period Ended 30 June, 2022

Executive Summary

								Unit : Million THB
	Quarter 2	Increase	%		6-Month	Increase	%
	2022	2021	(Decrease)		2022	2021	(Decrease)
Total revenues	18,449.70	10,516.14	7,933.56	75.4		36,699.36	19,217.47	17,481.89	91.0
Cost of sales and rendering of services	14,551.32	7,604.23	6,947.09	91.4		30,045.74	13,707.41	16,338.33	119.2
EBITDA	3,979.98	3,031.36	948.62	31.3		6,974.62	5,681.40	1,293.22	22.8
Finance costs	751.00	425.63	325.37	76.4		1,559.32	836.67	722.65	86.4
Tax expense	266.12	(57.91)	324.03	559.5		734.69	(37.49)	772.18	n.a.
Profit to owner of the Company	2,196.10	2,122.84	73.26	3.5		3,775.45	4,210.70	(435.25)	(10.3)
Profit before FX	2,217.22	2,189.47	27.75	1.3		3,383.60	4,009.67	(626.07)	(15.6)

Total Revenues

• In the 2nd quarter of 2022 and the six-month period of 2022, the total revenues increased since the Energy Payment of RG increased due to higher electricity generated than that of the same period of the previous year. Also, the revenues of SCG and FRD have been consolidated since the acquisition in the 4th quarter of 2021. In addition, revenue from sales of RAC increased as Collector Power Plant has commenced COD in June 2021. In addition, the electricity price increased due to the increase in demand.
• In the 2nd quarter of 2022 and the six-month period of 2022, the share of profit of HPC and PNPC increased since the revenue from sales increased. In addition, RIAU Combined-Cycle Power Plant and Nexif RATCH Energy Rayong Combined Cycle Power Plant (held by NRER) have commenced COD on February 10, 2022 and April 30, 2022, respectively.

EBITDA

• In the 2nd quarter of 2022 and the six-month period of 2022, the EBITDA increased since the total revenue increased as mentioned above. Although, the cost of sales increased since the rising of fuel price in response to global energy markets. Also, the EBITDAs of SCG and FRD have been consolidated since the acquisition in the 4th quarter of 2021.

Profit to Owner of the Company

• The operating result for the 2nd quarter of 2022 showed the profit (attributable to owners of the Company), increasing from the increase in the EBITDA as mentioned above. In contrast, the finance cost increased since the finance costs of FRD and SCG have been consolidated. Also, income tax increased due to the tax profit of RG and RAC increased.
• The operating result for the six-month period of 2022 showed the profit (attributable to owner of the Company), decreasing from the increase in the finance cost and income tax. The main reason was FRD recorded the one-timewrite-off deferred debt fees of its existing loans from debt refinancing in the amount of THB 225.73 million, which resulted in the interest saving and loan repayment extension in the 1st quarter of 2022. In addition, FRD recorded the deferred tax expense due to tax rate change of its subsidiary in Indonesia in the amount of THB 337.70 million. These items, in the total amount of THB 563.43 million, were one-time accounting transaction which had no impact on cash flow of the Group.

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Management Discussion and Analysis

For the Three-month and Six-month Period Ended 30 June, 2022

1. Significant Events of the 2nd Quarter of 2022

1.1 Investment in the Expansion of Electricity and Steam Generation Capacity of Nava Nakorn Electricity Generating Company Limited (NNEG)

On May 5, 2022, the Company reported to the Stock Exchange of Thailand that NNEG will invest in an expansion for an addition of 30 megawatts of electricity generating capacity and 5 tons per hour of steam generation capacity with the project cost of approximately THB 1,724 million. The capacity expansion project is planned to begin construction in December 2022 and is expected to be completed and commence commercial operation approximately in June 2024. After the expansion, NNEG will have the total electricity generation capacity of approximately 215 megawatts and the net steam generation capacity of approximately 45 tons per hour.

1.2 Commercial Operation of Nexif RATCH Energy Rayong Combined Cycle Power Plant Project

Nexif RATCH Energy Rayong Combined Cycle Power Plant project with a capacity of 92 megawatts and 25-year Power Purchase Agreement with EGAT, held by NRER through NRES, has officially started commercial operation since April 30, 2022.

1.3 The Publication PPO and Capital Increase

At the Annual General Meeting of the shareholders of the Company held on April 27, 2022, the shareholders approved the increase of the registered capital of the Company from THB 14,500.00 million to THB 22,192.31 million by issuing new ordinary shares in the amount of 769.23 million shares at par value of THB 10 each, totaling THB 7,692.31 million for issuing and offering the shares in proportion to the shareholding of existing shareholders, exclude shareholders whose holding would subject the Company to obligations under the law of other jurisdictions. On May 12, 2022, the Company considered and determined the final offering price at THB 34.48 per share, number of the final offered shares of 725 million shares in the total amount THB 24,998.00 million, and the final offering ratio per share at 2 existing ordinary shares to 1 new ordinary share. The Company registered the change in the paid-up capital increase from this issuance and offering of new ordinary shares with the Ministry of Commerce on June 22,2022.

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Management Discussion and Analysis

For the Three-month and Six-month Period Ended 30 June, 2022

Progress of Projects under Construction (as of June 30, 2022)

	MRT Pink Line Project
Technology		Monorail
Route		Khae Rai-Min Buri
Ownership		10%
Contract Term		30 Years
COD		Year 2023
Progress		Civil Works = 91.01%
		Railway System = 87.90%
	MRT Yellow Line Project
Technology		Monorail
Route		Lad Prao-Sam Rong
Ownership		10%
Contract Term		30 Years
COD		Year 2023
Progress		Civil Works = 94.18%
		Railway System = 93.23%

Hin Kong Power Plant (HKP)

Type of Power Plant	IPP
Type of Fuel	Natural Gas
Install Capacity (MW)	1,540
Location	Ratchaburi Province
Ownership	51%
PPA	25 Years with EGAT
COD	Year 2024 and 2025
Progress	41.10%

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