Ratch : Management Discussion and Analysis Q1/2024

RATCH Group Public Company Limited

Management Discussion and Analysis

For the 1st Quarter Ended March 31, 2024

Management Discussion and Analysis

For the 1st Quarter Ended March 31, 2024

Abbreviation

The Company	RATCH Group Public Company Limited
The Group	RATCH Group Public Company Limited and its subsidiaries
PEA	Provincial Electricity Authority
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
CS	Coc San Hydroelectric Power Plant, operated by Lao Cai Renewable Energy Stock Company, a wholly-owned indirect
	subsidiary
LG	Lincoln Gap 1&2 Wind Farm Project, operated by Lincoln Gap Wind Farm Pty Ltd., a wholly-owned indirect subsidiary
	(currently owned by RASA)
HKH	Hin Kong Power Holding Company Limited, a joint venture in proportion of 51%
HKP	Hin Kong Combined-Cycle Power Plants, operated by Hin Kong Power Company Limited, a direct joint venture in
	proportion of 51%
HPC	Hongsa Thermal Power Plants, operated by Hongsa Power Company Limited, an indirect joint venture in proportion of 40%
NN2	Nam Ngum 2 Hydroelectric Power Plant, operated by SouthEast Asia Energy Limited, a direct joint venture in proportion of
	33.33%
PNPC	Xe-PianXe-Namnoy Hydroelectric Power Plant, operated by Xe-PianXe-Namnoy Power Company Limited, a direct joint
	venture in proportion of 25%
RAC	RATCH-Australia Corporation Pty Ltd, a wholly-owned indirect subsidiary
RASA	RATCH-Australia South Australia (Holdings) Pty Ltd., an indirect subsidiary wholly-owned by RAC
RCO	RATCH Cogeneration Power Plant, operated by RATCH Cogeneration Company Limited, a wholly-owned subsidiary
R E N	REN Korat Energy Cogeneration Power Plant, operated by REN Korat Energy Company Limited, a direct joint venture in
	proportion of 40%
RER	RATCH Energy Rayong Power Plant, operated by RATCH Energy Rayong Company Limited
RG	Ratchaburi Power Plants, operated by Ratchaburi Electricity Generating Company Limited, a wholly-owned subsidiary
RHIS	RH International (Singapore) Corporation Pte Ltd, a wholly-owned indirect subsidiary
SCG	Ratch Pathana Energy Public Company Limited (previous name : "Sahacogen (Chonburi) Public Company Limited"), a
	subsidiary in proportion of 51.67%
SP	Snapper Point Gas-Fired Power Plant, operated by Port Adelaide Energy Pty Ltd., a wholly-owned indirect subsidiary
	(currently owned by RASA)

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Management Discussion and Analysis

For the 1st Quarter Ended March 31, 2024

Executive Summary

Industry and Economic Situation

The Bank of Thailand has reported that, the Thai economy slowed down in March 2024 as domestic demands and tourism sector softened after a period of robust expansion and the benefits from the Easy E-Receipt campaign dissipated. Despite the slowdown, the economy showed signs of improvement in the 1st quarter of 2024, compared to the previous quarter. However, the overall growth remained lower on a YoY basis. The tourism sector continued to drive economic activity in the service sector, leading to higher employment. Private investment also increased, particularly in new industries and services while exports and manufacturing production remained stagnant.

The Ministry of Finance projects economic growth of 2.4% in 2024, up from the 1.9% growth in the previous year, this growth is supported by the continued expansion of the tourism sector and the supporting role of fiscal policy for the remaining of the year. Domestically, economic stability is expected to be robust, with an inflation rate forecasted at 0.6% per year, due to the downward adjustment in prices of certain food items. Additionally, the decline in prices of goods in the energy category is attributed to the government's initiatives to alleviate the cost of living.

On April 10, 2024, the Monetary Policy Committee (MPC) decided to maintain the policy rate at 2.50%, as it had done in its two previous meetings since November last year. The current policy rate still aligns with the economic and inflation trends, and is conducive to safeguarding long-term financial and economic stability.

The PRISM Experts reports that global oil prices have remained within the range of 75-90 USD per barrel since the beginning of 2024. This is driven by geopolitical factors. OPEC plus will potentially increase its production after the 2nd quarter of 2024 to alleviate the high oil prices. Additionally, the OPEC plus still have a spare capacity of approximately 5 million barrels per day. Nevertheless, vigilant monitoring of the global economic recovery and adjustments in interest rates by central banks worldwide is imperative, as these factors will impact oil price fluctuations.

On March 27, 2024, the Energy Regulatory Commission (ERC) approved to maintain fuel tariff (Ft), applicable between May and August 2024 at 0.3972 THB per unit which keeps the price of electricity at an average of 4.1805 THB per unit.

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Management Discussion and Analysis

For the 1st Quarter Ended March 31, 2024

Total Revenues and EBITDA

• Total Revenues

• EBITDA

In the 1st quarter 2024, the total revenues were THB 10,997 million. By excluding the Energy Payment (pass- through), the total revenue increased by 6.2% QoQ while decreased by 14.9% YoY. The EBITDA were THB 3,332 million, increased by 11.3% QoQ while decreased by 10.0% YoY. The main reasons were as follows:

• The total revenues and EBITDA increased QoQ mainly as RG had more availability and electricity generating together with the increase in gas price. Moreover, Ft, as approved by the Energy Regulatory Commission (ERC), is at 0.3972 THB per unit for the period January - April 2024 , which has increased from 0 .2048 THB per unit during September - December 2023. As a result, the revenue from sales and EBITDA of SPPs such as RCO, SCG, and RER increased. In addition, the Company recognized an increase in share profit from PNPC from managing the amount of water flowing into the reservoir in the second half of 2023.
• The total revenues and EBITDA decreased YoY as the share profit of HPC decreased mainly due to planned maintenance which has conducted since the end of 2023 to maintain the efficient operation and profit contribution.

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Management Discussion and Analysis

For the 1st Quarter Ended March 31, 2024

Profit to Owner of the Company

In the 1st quarter 2024, by excluding the effect of FX, the operating result was THB 1,416 million, increased by 235.5% QoQ while decreased by 12.9% YoY. The main reasons are in line with the total revenue and the EBITDA as previously mentioned.

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Management Discussion and Analysis

For the 1st Quarter Ended March 31, 2024

1. Significant Events of the 1st Quarter of 2024

Significant Events of the 1st Quarter of 2024 are as follows

1.1 Commercial Operation of Hin Kong Combined-CyclePower Plant Block 1, Ratchaburi Province and LNG import to support electricity production

On March 1, 2024, Hin Kong Combined-Cycle Power Plant Block 1 with contracted capacity of 700 megawatts, located in Hin Kong Subdistrict, Muang District, Ratchaburi Province, has officially commenced commercial operation. Hin Kong Combined-Cycle Power Plant Block 1 and Block 2 with total contracted capacity of 1,400 megawatts were operated by HKP and had PPA with EGAT for 25 years. Hin Kong Combined-Cycle Power Plant Block 2 is expected to commence commercial operation in 2025.

Granted an LNG shipper license in the amount of 1.4 million tons per annum, HKH has successfully imported the first LNG shipment of approximately 62,000 tons on February 28, 2024, in preparation for the commercial operation of Hin Kong Combined-Cycle Power Plant Block 1. This marks HKH as the first private company in Thailand to initiate LNG imports. In addition, the import of such LNG is a vertical integration between the power generation and the gas business, and in line with the Energy Policy and Planning Office's policy to minimize risks in gas procurement and increase energy security for the country as well. In 2024, HKH plans to import a total of approximately 0.64 million tons.

1.2 Signing of Power Purchase Agreement for Wind Farms in the Commonwealth of Australia

On March 28, 2024, RAC has entered into Power Purchase Agreement with ZEN Energy Retail Pty Ltd., an electricity retailer in the Commonwealth of Australia, to sell 20.6% of the electricity generated by the 226.80-megawatt Collector Wind Farm in the New South Wales, and 100% of the electricity generated by the 33- megawatt Starfish Hill Wind Farm in South Australia. Such sale of electricity will begin from April 1, 2024 onwards for the total contract period of 10 years.

Before entering into this Power Purchase Agreement, Collector Wind Farm sold its generated electricity to Iberdrola Australia Energy Markets Pty Ltd. (formerly known as Infigen Energy Markets Pty Ltd.) and ALDI Foods Pty Ltd. at the proportion of 60% and 19.4% respectively, while Starfish Hill Wind Farm sold 100% of its generated electricity to National Electricity Market of the Commonwealth of Australia. After the transaction is complete, the proportion of electricity sold according to Power Purchase Agreements for both wind farms will be 100%.

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Management Discussion and Analysis

For the 1st Quarter Ended March 31, 2024

Progress of Projects under Construction (as of March 31, 2024)

Hin Kong Power Plant (HKP) Block 2

	Type of Power Plant		IPP
	Type of Fuel		Natural Gas
	Install Capacity (MW)		770
	Location		Ratchaburi Province
	Ownership		51%
	PPA		25 Years with EGAT
	COD		Year 2025
	Progress		99.00%
	R E N Korat Energy Power Plant (R E N)
	Type of Power Plant	Cogeneration IPS Power Plant
	Type of Fuel	Natural Gas
	Install Capacity (MW)	31.2
	Location	Nakhon Ratchasima Province
	Ownership	40%
	Customers	Industrial Promotion Zone,
		Nakhon Ratchasima Province
	COD	Year 2024
	Progress	98.77%

The Expansion of NNEG Phase 3

Type of Power Plant	SPP Cogeneration
Type of Fuel	Natural Gas
Install Capacity (MW)	30
Location	Pathumthani Province
Ownership	40%
Customers	Industrial Users
COD	Year 2024
Progress	30.01%

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Management Discussion and Analysis

For the 1st Quarter Ended March 31, 2024

Calabanga Power Plant

Type of Power Plant	Solar Power Plant
Install Capacity (MW)	74.1
Location	Luzon Island, Philippines
Ownership	49%
COD	Year 2024
Progress	90.91%

Song Giang 1 Power Plant

Type of Power Plant	Hydroelectric Power Plant
Install Capacity (MW)	12
Location	Khanh Hoa Province, Vietnam
Ownership	46.22%
COD	Year 2024
Progress	42.59%

Wood Pellet Production and Sale Project

Type	Wood Pellet Production and Sale
Capacity	60,000 Tons per Year
Location	Champasak Province, Lao PDR
Ownership	25%
Contract Term	15 Years
COD	Year 2024
Progress	94.32%

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Management Discussion and Analysis

For the 1st Quarter Ended March 31, 2024

	MRT Pink Line Extension Project
Technology		Monorail
Route		Sirat - Muang Thong Thani
Ownership		10%
Contract Term		30 Years
COD		Year 2024
Progress		Civil Works = 54.44%
		Railway System = 32.97%

Intercity Motorway Bang Pa-In - Nakhon Ratchasima (M6)

Type	Designing, Construction, Civil Works
	Maintenance and Installation of Toll-
	Collection System
Route	Bang Pa-In - Nakhon Ratchasima
Ownership	10%
Contract Term	Phase 1: Designing and
	Construction - 3 Years
	Phase 2: Maintenance - 30 Years
COD	Year 2025
Progress	37.66%

Intercity Motorway Bang Yai - Kanchanaburi (M81)

Type	Designing, Construction, Civil Works
	Maintenance and Installation of Toll-
	Collection System
Route	Bang Yai - Kanchanaburi
Ownership	10%
Contract Term	Phase 1: Designing and Construction
	- 3 Years
	Phase 2: Maintenance - 30 Years
COD	Year 2025
Progress	46.18%

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Management Discussion and Analysis

For the 1st Quarter Ended March 31, 2024

2. Operation Performance according to Consolidated Financial Statement

Analysis of Revenues

				Unit : Million THB
	Q1/2023	Q4/2023	Q1/2024	Increase(Decrease)%
				QoQ	YoY
Revenue from sales and rendering of services
14,493	7,492	8,888	18.6%	-38.7%
RG	9,689	3,747	4,784	27.7%	-50.6%
RAC	1,005	1,038	1,572	51.4%	56.4%
LG*, SP*, CS	935	481	46	-90.4%	-95.1%
RCO	868	666	717	7.7%	-17.4%
SCG	1,426	1,100	1,118	1.6%	-21.6%
RER	540	483	574	19.0%	6.3%
Others	29	(22)	77	454.4%	163.0%
Revenue from leases contracts	627	592	567	-4.2%	-9.6%
Share of profit of associates and joint ventures	1,358	584	946	62.1%	-30.3%
IPPs	1,109	428	602	40.6%	-45.7%
SPPs	93	83	106	26.8%	14.1%
Hydro Power Plants	(1)	100	245	145.8%	n.a.
Renewable Power Plants	103	(35)	28	180.4%	-72.8%
Infrastructure and Others	54	7	(35)	-574.9%	-164.9%
Other incomes	527	1,200	596	-50.4%	13.0%
Management service income	65	119	75	-37.3%	15.2%
Interest income	407	518	434	-16.3%	6.6%
Other income	55	562	87	(0.85)	58.4%
Total revenues	17,005	9,868	10,997	11.4%	-35.3%

Note: * On December 19, 2023, LG and SP were restructured to be under RASA, a subsidiary of RAC.

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