SET Announcements

1000 / 150 / 2005 August 11, 2005 Attention : President of The Stock Exchange of Thailand Subject : Filing Reviewed Financial Statements and Business Operation'sExplanation for Quarter 2, 2005 Attachment : 1.Reviewed Financial Statements for Quarter 2, 2005 (Thai 1 Copy) 2.Reviewed Financial Statements for Quarter 2, 2005 (English 1 Copy) According to the SET's Regulation Re: Preparation and Submission of Financial Statements, Financial Reports and Operating Results of Listed Companies, 2001, a listed company shall prepare and submit quarterly financial statements reviewed by the Auditor within 45 days since the last day of each quarter. The Bangchak Petroleum Public Company Limited (BCP) would like to file reviewed financial statements by the Auditor for quarter 2 ending June 30, 2005, and also would like to explain reasons for the variation in business operations in accordance with the profit and loss account more than 20 percent from that of the same period of 2004 as follow : Regarding to the business operations in Quarter 2, 2005, the Company's total revenues were Baht 22,096 million, EBITDA was Baht +1,647 million, net interest expense was Baht 157 million, and Depreciation and amortization was Baht 194 million. Therefore, the Company posted Baht 1,317 million of net profit (net profit of Quarter 2, 2004 was Baht 647 million). Such profit resulted from the following factors: 1. Gross Refining Margin (not included inventory gain/ loss) was 3.28 $/BBL, higher than the same period of last year at the level of 1.83 $/BBL, due to the increase in oil demand corresponding to the economic recovery and the sharply increase in refined oil products demand for feedstock in the petrochemical industry. However, the fuel oil price increased at the lower rate comparing to the other refined oil products and crude, these limited the Company's gross refinery at a certain level, especially the gross refining margin of the Middle East crude which was limited at the low level due to the high portion of fuel oil production. Therefore, the Company decided to reduce the Middle East crude ordering in order to minimize risk of losses from low gross refining margin, as well as, from inventory loss in case of oil price reduction. Consequently, these resulted to the lower utilization of refining capacity. Moreover, the Company had gains from the changes of oil price and foreign exchange rate on crude and finished oil product inventories (Inventory gains) by Baht 967 million, comparing to that of Baht 553 million in the same period of 2004, since oil prices had continuously increased throughout the year. Therefore, in the Quarter 2, 2005, the Company's total gross refining margin was 6.99 $/BBL, while the refinery utilization rate was 65 KBD, decreased from that the same period of last year at the level of 85 KBD, due to the fact that the Company would like to maintain the gross refining margin at the high level, as well as, minimize the inventory loss risk in case of oil price reduction as mention above. Therefore, these measures made the refinery business unit achieved its performance target in this quarter. 2. Marketing Margin (not included jet fuel) was 0.13 Baht/liter, lower than the same period of last year at the level of 0.44 Baht/liter, since the Company could adjust the retail oil prices at the lower rate comparing to its costs that sharply increases following the oil prices in the world market. However, the Company had gained from selling Jet fuel by Baht 27 million or 0.34 Baht/liter. 3. Selling and administrative expenses was Baht 376 million, increased from that the same period of last year by Baht 72 million, due to the increases of Advertising and promotion expenses, and service station maintenance expenses, other fringe benefits, amortization, etc. 4. Net interest expense was Baht 157 million, decreased from that the same period of last year by 23 million, because the Depository Receipt of Convertible debenture (CDDR) amounting Baht 1,426 million were gradually converted to the ordinary shares since the quarter 2 last year, and the Company gradually refinanced the high interest rate bonds with the low interest rate loan from the Krungthai Bank. In addition, in the Quarter 2, 2005, the Company reduced the utilization of short-term loan due to the lower working capital required, since the Company had received cash from oil fund after the floatation of diesel oil price, together with the reduction of capacity utilization and sale volumes. Please be informed accordingly. Yours sincerely, - Signed - (Anusorn Sangnimnuan) President Corporate Planning Office Tel: 0-2335-4583