Ratch PCL : Operating Result Quarter 2 Ending 30 Jun 2019

(Translation)

RATCH 201 / 2019

August 13, 2019

Subject : Interim Financial Statements for the three-month and six-month periods ended June 30, 2019

To: President

The Stock Exchange of Thailand

RATCH Group Public Company Limited ("the Company"), are pleased to submit herewith the interim financial statements for the three-month and six-month periods ended June 30, 2019, independent auditor's report on review of interim financial information, compared with the interim financial statements for the three-month and six-month periods ended June 30, 2018. The details are as follows:-

The operating result according to the consolidated financial statement for the 2nd quarter of 2019 showed the profit (attributable to owners of the Company) of Baht 1,952.31 million or Baht 1.35 per share, decreasing by Baht 179.56 million, or 8.4 percent, compared with the profit of Baht 2,131.87 million or Baht 1.47 per share of the 2nd quarter of 2018. The operating result according to the consolidated financial statement for the 2nd quarter of 2019, withoutconsideration of the effect of foreign exchange gain (loss) of the Company, subsidiaries, associates, and joint ventures showed the profit of Baht 2,262.77 million, compared with the profit of Baht 1,752.04 million of the 2nd quarter of 2018, increasing by Baht 510.73 million, or 29.2 percent. The significant transactions were as follows:-

1. Revenue from sales and rendering of services (excluding fuel costs)

Revenue from sales and rendering of services for the 2nd quarter of 2019 was Baht 2,135.19 million (excluding fuel costs of Baht 7,930.03 million), increasing by Baht 546.97 million or 34.4 percent from revenue from sales and rendering of services in the 2nd quarter of 2018 of Baht 1,588.22 million (excluding fuel costs of Baht 8,296.77 million). The main reason was the increase in revenue from sale of Ratchaburi Electricity Generating Company Limited, a subsidiary, in the amount of Baht 196.49 million due to the increase in Base Availability Credit in 2019 compared to that of 2018, as specified in the Power Purchase Agreement. Additionally, revenue from sale of RATCH-Australia Corporation Pty Ltd, a subsidiary, increased in the amount of Baht 349.98 million, due to the commencement of commercial operation of Mount Emerald Wind Farm Project and Collinsville Solar Power Project on December 12, 2018 and March 21, 2019, respectively.

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2. Finance costs

Finance costs for the 2nd quarter of 2019 was Baht 250.93 million, decreasing by Baht 152.14 million or 37.7 percent from Baht 403.07 million in the 2nd quarter of 2018. The decrease in finance cost of Baht 175.79 million was from the recognition on remeasurement to fair value of the derivative according to the adopted accounting policies for derivatives and hedge accounting.

3. Revenue from finance lease contracts

Revenue from finance lease contracts for the 2nd quarter of 2019 was Baht 738.69 million, decreasing by Baht 114.93 million or 13.5 percent from Baht 853.62 million in the 2nd quarter of 2018. The change was due to the decreased lease receivable, calculated according to the Effective Interest Method.

4. Cost of sales and rendering of services (excluding fuel costs)

Cost of sales and rendering of services for the 2nd quarter of 2019 was Baht 1,265.51 million (excluding fuel costs of Baht 7,930.03 million), increasing by Baht 101.98 million or 8.8 percent from cost of sales and rendering of services in the 2nd quarter of 2018 of Baht 1,163.53 million (excluding fuel costs of Baht 8,296.77 million). The main reason was cost of sales from RATCH-Australia Corporation Pty Ltd, a subsidiary, increased in the amount of Baht 106.33 million, due to the commencement of commercial operation of Mount Emerald Wind Farm Project and Collinsville Solar Power Project on December 12, 2018 and March 21, 2019; respectively.

5. Share of profit of associates and joint ventures

Share of profit of associates and joint ventures for the 2nd quarter of 2019 was Baht 1,281.83 million, decreasing by Baht 445.33 million or 25.8 percent from Baht 1,727.16 million in the 2nd quarter of 2018. The main reasons were as follows:-

1. The share of profit from Hongsa Power Company Limited ("HPC"), a joint venture in proportion of 40 percent, decreased in the amount of Baht 371.00 million. The main reason was that during the 2nd quarter of 2018, HPC recorded gain on exchange rate in the amount of Baht 481.61 million, due to the appreciation of USD currency. In contrast, during the year 2019, HPC had adopted accounting policies for derivatives and hedge accounting, relating to Expenditure Hedging, resulting in decrease of foreign exchange effect.

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1. The share of loss from Xe-PianXe-Namnoy Power Company Limited ("PNPC"), a joint venture which the project is during construction, in proportion of 25 percent, increased in the amount of Baht EFG.HI million. The main reason was that during the 2nd quarter of 2019, PNPC recorded loss on exchange rate in the amount of Baht 78.44 million, due to the depreciation of USD currency. In contrast, during the 2nd

quarter of 2018, PNPC recorded gain on exchange rate in the amount of Baht 104.19 million, due to the appreciation of USD currency.

1. The share of profit from Fareast Renewable Development Pte. Ltd. ("FRD"), a joint venture investing in Asahan-1 Hydroelectric Power Project in the Republic of Indonesia, in proportion of 50 percent, was Baht 59.40 million. RH International (Singapore) Corporation Pte. Ltd., a subsidiary, has purchased ordinary shares of FRD in December 2018.
2. The share of profit from SouthEast Asia Energy Limited, a joint venture in proportion of
   33.33 percent, increased in the amount of Baht 51.81 million, mainly due to the higher electricity generation.

The operating result of the Company and its subsidiaries for six-month period ended June 30, 2019 showed the profit of Baht 3,693.57 million or Baht 2.55 per share, increasing by Baht 435.11 million or 13.4 percent compared to the Baht 3,258.46 million of the same period in 2018.

The statement of financial position of the Company and its subsidiaries as at June 30, 2019 showed total assets of Baht 99,156.02 million, decreasing by Baht 2,095.88 million or 2.1 percent from Baht 101,251.90 million as at December 31, 2018.

Please be informed accordingly.

Sincerely yours,

(Mrs. Wadeerat Charoencoop)

Chief Finance Officer

Acting for Chief Executive Officer

Accounting Control and Analysis Division

Tel : [phone]

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