SET Announcements

1600 / 017 / 2004 January 30, 2004 The Stock Exchange of Thailand 62, Ratchadapisek Road, Klongtoey Bangkok 10110 Attention : President of The Stock Exchange of Thailand Subject : Filing Unreviewed Financial Statements and Business Operations' Explanation for the year 2003 Attachment : 1. Unreviewed Financial Statements for the year 2003 (Thai 1 Copy) 2. Unreviewed Financial Statements for the year 2003 (English 1 Copy) As the Bangchak Petroleum Public Company Limited (BCP) has filed unreviewed and unaudited financial statements following the Stock Exchange of Thailand's guidelines for filing unreviewed and unaudited financial statements; The Company would like to file unreviewed financial statements for the year ended December 31, 2003 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 2002 as follow : Regarding to the business operations in 2003, the Company's total revenues were Baht 61,264 million, EBITDA was Baht +1,669 million, interest expense was Baht 1,028 million and Depreciation and amortization was Baht 740 million. Thus, it reported Baht 99 million of profit before the other accounting items. According to the business and financial restructuring plan, the Company posted Baht 1,199 million of the other accounting items, which comprise of Baht 987 million of impairment of assets (Non- cash items) and Baht 212 million of early redemption fee of long- term loans. Therefore, the Company posted Baht 1,298 million of net loss - higher than that in 2002 by Baht 1,832 million (the 2002 net loss was Baht 534 million). Such loss resulted from the following factors: 1. In 2003, Gross Refining Margin (not included inventory gain/ loss) increased by 0.18 $/BBL from 1.31 $/BBL in 2002 to approximately 1.49 $/BBL, since the demand of oil consumption has continuously increased as the economic recovery, as well as, the Company has performed the operation synergies with the other oil companies in order to enhance revenues and reduce costs. However, the BCP's refinery utilization was still 74 KBD closed to that last year, since The Company emphasized only on the highly profit markets, such as, sales through service stations and industry market. 2. In 2003, marketing margin of finished oil products decreased by approximately 0.03 Baht/ Litre, which was the result of intense competition. However, the retail sales of the Company increased by 1.6 KBD to 53.4 KBD, which increased in high profit markets, such as 17% increase in service station sales and 21% increase in industry-market sales, but decrease in low- profit Jobber market sales and decrease in JET fuel sales resulting from SARS. 3. The Company had gains from the changes of oil price and foreign exchange rate on crude and finished oil product inventories (Inventory gain) by Baht 52 million in 2003, comparing to that of Baht 1,609 million in 2002. Therefore, the 2003 EBITDA before inventory gain was Baht +1,617 million, higher than that in 2002 and 2003 target. (Unit : Million Baht) 2003 (A)2002 (B)+ / - (unaudited)(audited)(A) - (B) - EBITDA +1,669 +2,882 - 1,213 - Minus- Inventory Gains (+52) (+1,609) (- 1,557) -Adjusted EBITDA + 1,617 +1,273 + 344 4. Since the Company has expanded the life of BCP refinery's land rent period from 12 years to 30 years, the Company could adjust the refinery depreciation period in accordance with the useful life of the refinery and such longer land rent period. Therefore, the 2003 depreciation of the refinery could reduce by Baht 300 million. 5. According to the business and financial restructuring, the Company has considered the asset utilization plan in order to maximize the efficiency of the asset utilization; however, there are some non- utilizing assets. Therefore, at the end of the year 2003, the Company impaired those non- utilizing assets by Baht 987 million (Non- Cash Item), which comprised of unused lands waiting for sale, non-operating service stations and a part of the tariff prepayment, in order to reflect the market value of those assets. In addition, the Company also redeemed the MOF- guaranteed bonds as a part of the Company's financial restructuring plan, which resulted to the early redemption fee of Baht 212 million. Please be informed accordingly. Yours sincerely, (Watcharapong Saisuk) Assistant Vice President, Corporate Planning Office Corporate Planning Office Tel: 0-2335-4583