Ratch : Management Discussion and Analysis Quarter 3 Ending 30 Sep 2020

RATCH Group Public Company Limited

Management Discussion and Analysis

For the Three-month and Nine-month Periods Ended 30 September, 2020

Management Discussion and Analysis

For the Three-month and Nine-month Periods Ended 30 September, 2020

Abbreviation

The Company	RATCH Group Public Company Limited
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

ABEIF	An Binh Energy and Infrastructure Fund
HKH	Hin Kong Power Holding Company Limited, a joint venture in proportion of 51 percent
HKP	Hin Kong Power Company Limited, an indirect joint venture wholly-owned by HKH
HPC	Hongsa Power 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
	NERS
NRES	NEXIF RATCH ENERGY SINGAPORE PTE LTD, an indirect joint venture in proportion of 49
	percent
PNPC	Xe-PianXe-Namnoy Power Company Limited, an indirect 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
	Ratchaburi World Cogeneration Company Limited, an indirect joint venture in proportion of 40
RWC
	percent

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Management Discussion and Analysis

For the Three-month and Nine-month Periods Ended 30 September, 2020

Executive Summary

								Unit : Million baht
	Quarter 3	Increase			9-Month	Increase
			%				%
			(Decrease)				(Decrease)
	2020	2019			2020	2019
Total revenues *	3,887.50	3,669.65	217.85	5.9		12,089.91	12,071.86	18.05	0.1
Total cost and expenses *	2,302.07	2,141.33	160.74	7.5		7,988.17	6,664.32	1,323.85	19.9
EBITDA	2,307.47	2,340.30	(32.83)	(1.4)		7,104.18	8,217.65	(1,113.47)	(13.5)
Gain (Loss) on FX	136.81	(163.48)	300.29	183.7		55.50	(349.13)	404.63	115.9
Profit to owner of the Company	1,722.23	1,364.84	357.39	26.2		4,157.21	5,058.41	(901.20)	(17.8)
Profit before FX	1,585.42	1,528.32	57.10	3.7		4,101.71	5,407.54	(1,305.83)	(24.1)
* excluding fuel cost

The operating result for the 3rd quarter of 2020 showed the profit (attributable to owners of the Company) of THB 1,722.23 million, increasing from the same period of the previous year by THB 357.39 million. The gain on FX increased the profit in the amount of THB 300.29 million. Without consideration of the effect of FX of the Company and subsidiaries, the operating result for the 3rdquarter of 2020 showed the profit of THB 1,585.42 million.

The operating result for the nine-month period of 2020 showed the profit (attributable to owners of the Company) of THB 4,157.21 million, decreasing from the same period of the previous year by THB 901.20 million. The decrease is owing to the decrease in the profit of RG from the decrease in Base Availability Credit, as specified in the PPA and the decrease in the profit of HPC from planned maintenance shutdown. Without consideration of the effect of FX of the Company and subsidiaries, the operating result for the nine-month period of 2020 showed the profit of THB 4,101.71 million.

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Management Discussion and Analysis

For the Three-month and Nine-month Periods Ended 30 September, 2020

1. Significant Events of the 3rd Quarter of 2020

An Binh Energy and Infrastructure Fund ("ABEIF") Project in Socialist Public of Vietnam

On July 15, 2020, RHIS has signed of transaction documents with respect to its partnership with Geleximco Group Joint Stock Company ("Geleximco"). RHIS and Geleximco will hold ownership interest of 49 percent and 51 percent of the charter capital of ABEIF, respectively. The ABEIF is a Vietnam focused power sector fund which has potential investment consideration in various power and infrastructure projects in the Socialist Republic of Vietnam.

On August 18, 2020, ABEIF has made its first investment in the power generation sector. ABEIF has acquired 45 percent indirect ownership of Thang Long Power Plant, one of the largest currently operating coal-fired power plants under the Build-Own-Operate ("BOO") framework, located in the North of Vietnam with a gross capacity of 620 megawatts. The plant has a 25-year PPA with the state- owned Vietnam Electricity.

The Expansion of Power and Steam Generating Capacity of RATCH Cogeneration Company Limited ("RCO")

On August 4, 2020, RCO had received EGAT's consent for its expansion of power generating capacity by approximately 30 megawatts and steam generating capacity by approximately 5.46 tons per hour in order to sell the additional power and steam to users in Navanakorn Industrial Promotion Zone in Pathum Thani Province and neighboring areas. The construction is scheduled to begin in February 2021 and the project is expected to commence the COD in July 2022.

Quang Tri 1 Thermal Power Plant Project

On September 16, 2020, the Company entered into a Joint Development Agreement of Quang Tri 1 Thermal Power Plant Project in the Socialist Public of Vietnam with EGAT International Company Limited ("EGATi") and Electricity Generating Public Company Limited ("EGCO") with the shareholding proportion of 30, 40 and 30 percent respectively.

Quang Tri 1 Thermal Power Plant Project is a coal-fired power plant project with the installed capacity of 1,320 megawatts (2 units with the capacity of 660 megawatts each), located in Quang Tri Economic Zones, Central Vietnam. The project's generated electricity will be sold to Vietnam Electricity ("EVN") under the long-term PPA. Currently, the Project is under green-field development and under negotiation process with the expected COD in 2025.

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