CentralCentral PattanaPattana Plc.Plc. Property Development & Investment
Opportunity Day Presentation : 4Q 2008 & FY 2008 31st March 2009 the Stock Exchange of Thailand Important Notice
The information contained in this presentation is for information purposes only and does not constitute an offer or invitation to sell or the solicitation of an offer or invitation to purchase or subscribe for share in Central Pattana Public Company Limited (“CPN” and shares in CPN, “shares”) in any jurisdiction nor should it or any part of it form the basis of, or be relied upon in any connection with, any contract or commitment whatsoever.
This presentation may include information which is forward-looking in nature. Forward-looking information involve known and unknown risks, uncertainties and other factors which may impact on the actual outcomes, including economic conditions in the markets in which CPN operates and general achievement of CPN business forecasts, which will cause the actual results, performance or achievements of CPN to differ, perhaps materially, from the results, performance or achievements expressed or implied in this presentation.
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2 Content
Business Highlights
Operations
Developments
Financial Highlights
Appendix
3 Business Highlight 2008 Business Highlights
(3) 2008 total revenue(1) grew by 12% y-o-y(2) to 9,311 MB, Leading Position in Bangkok Retail Space primarily due to higher contribution from CentralWorld, continuous increase in rental rates at all properties, higher
service income after adjustment of service charge (CAM Charge) CPN in Jan 08, and additional incomes from newly opened 24%
Chaengwattana project. The Mall Group Financial 11% (2) 2008 net profit increased by 39% y-o-y to 2,186 MB, Future Park Rangsit supported by organic growth in core business and the efficient 5% cost control. Siam Paragon Others 5% 36% Seacon Square 5% Occupancy rate of retail properties stood at 97%, slightly MBK 2% Siam Future increased from 96% in 2007 with an evident increase in Seri Center Fashion Island 6% occupancy rate at CentralWorld and CentralPlaza Pinklao. 2% 4% Effective rental rate for retail space increased by 3% y-o-y to average 1,259 Bt/sqm/month (after special rental discount at CentralWorld). Shareholder’s Value Appreciation
Operation Occupancy rate of office properties stood at 94%, slightly 5 Years CPN share price compared to SET Index and Property Index increased from last year. Take-up rate at Lardprao, Pinklao B (based price on year 2004) and the Offices@CentralWorld enhanced while that of Pinklao A Comparative index based 100 dropped in 2008. 400 350 SET PROP CPN CentralPlaza Chaengwattana opened on 27 Nov 08. 300 CentralFestival Pattaya Beach launched on 23 Jan 09. 250 200 CentralPlaza Chonburi sales progress (retail space) achieved 85%. The shopping complex will be opened in May 09. 150 100
Development CentralPlaza Khon Kaen sales progress (retail space) reached 50
56%. The shopping complex is scheduled to open in Dec 09. - - Jan-04 Jul-04 Jan-05 Jul-05 Jan-06 Jul-06 Jan-07 Jul-07 Jan-08 Jul-08 Dec-08 Note1: Total revenue includes rental & service income, food & beverage income, and other income Note2: Excluding one-time income of Bt214.3 mil in FY07. 5 Note3: Based on 4Q06 CB Richard Ellis’s report and company’s estimate as of Dec 08. The new sub-lease agreement of CentralPlaza Lardprao
CPN’s shareholder approved the new sub-lease agreement of CentralPlaza Lardprao on 25 March 2009.
Therefore, CPN enters into 20 years new sub-lease agreement of CentralPlaza Lardprao with Central International Development Co.,Ltd (CID) by 28 March 2009.
The sub-leased assets: 1) Land : parcels of land (approximate area of 28 rais) on which CentralPlaza Lardprao project is located. 2) Buildings :
Gross Leaseable Area Net Leaseable Area Occupancy Rate (%) Buildings (Sq.m) (Sq.m) As at 31 December 2008
Shopping Plaza 95,000 55,531(1) 97% Office Building 23,000 17,719 97% Parking Building 90,000 - -
Total 208,000 - -
Leasehold payment of totaling 16,178.3 MB (2) comprises: - Up-front payment of totaling 2,162.3 MB paid in 5 annual installments - Annual lease payment of totaling 14,016.0 MB
CPN is obligated to make an investment cost at least 1,382.6 MB for asset renovation and such renovation is required to complete by 2013. However, any asset renovation or enhancement is required to seek for an approval from SRT.
Note 1: The net leaseable area of the shopping plaza includes the net leasable areas of movie theatres totaling 7,500 sq.m. and the convention hall totaling 9,000 sq.m. 6 2: Please terms of payment in an appendix Operations Leaseable Area and Occupancy: Retail
For CPN’s 12 existing shopping complexes, there are nine shopping centers located in Bangkok Metropolitan Area (BMA) and its vicinity, while the other three shopping centers located in provincial areas.
Bangkok Metropolitan Area : BMA
Leaseable No.of Occupancy Rate (2) Comments CPN Retail Develop- Land area (1) Tenants Properties ment Ownership 4Q08 3Q08 4Q07 (sqm) 4Q08 (1)
1. Ladprao Greenfield Leasehold 55,531 344 97% 99% 100%
2. Ramindra Greenfield Leasehold 17,159 79 100% 99% 99% Higher occupancy rate from the entry of two 3. Pinklao Greenfield Leasehold 55,684 277 98% 99% 91% new anchors and other retailers as a result of tenant mixed. 4. Rama 3 Greenfield Freehold 18,192 69 100% 100% 100%
5. Bangna Acquisition Freehold 57,435 303 98% 98% 99%
6. Rama 2 Greenfield Leasehold 5,937 34 100% 100% 100%
7. Rattanatibet Acquisition Freehold 76,848 222 98% 99% 99% Higher occupancy rate resulted from the 8.CentralWorld Acquisition Leasehold 184,592 464 97% 92% 93% openings of an anchor “Center Point” and other retail fashion outlets. 9.Chaengwattana Greenfield Freehold 64,917 396 91% n/a n/a Newly opened in Nov 08. Target occupancy rate at 95% for the year end 2009. CPN Portfolio in BMA 536,295 2,188 97% 96% 96%
Note 1: Excluding rental agreements < 1 year, such as kiosk, carts, ATMs and coin machines. Note 2: Percentage based on leaseable area. 8 Leaseable Area and Occupancy: Retail (Con’t)
Provinces Comments
Leaseable No.of Occupancy Rate (2) CPN Retail Develop- Land area (1) Tenants Properties ment Ownership 4Q08 3Q08 4Q07 (sqm) 4Q08 (1)
1. Pattaya Center Greenfield Leasehold 15,227 140 100% 100% 100%
2. Chiangmai Acquisition Freehold 76,321 531 99% 99% 98%
3. Pattaya approx Greenfield Freehold n/a n/a n/a n/a The openings of project was in Jan 09. Festival 58,500
CPN Portfolio in Provinces 91,548 671 99% 99% 98%
Total CPN Portfolio for Retail Properties 627,843 2,859 97% 97% 96%
CPNRF Properties
CPNRF Retail Properties
1. Rama 2 Greenfield Leasehold 93,307 321 99% 99% 99% Please see CPNRF.
2. Rama 3 Greenfield Freehold 39,961 228 97% 96% 92% Please see CPNRF. Total CPNRF Portfolio 133,268 549 98% 98% 97%
Note 1: Excluding rental agreements < 1 year, such as kiosk, carts, ATMs and coin machines. Excluded leaseable area of newly opened CentralFestival Pattaya Beach . Note 2: Percentage based on leaseable area. Note 3: Leaseable area of Rama II and Rama III, which are under CPNRF, include rental agreements < 1 year such as kiosk, carts, ATMs and coin machines 9 and CPN acts as the property manager. Leaseable Area and Occupancy: Office & Residential
Leaseable No.of Occupancy Rate (2) Comments Develop- Land Office area (1) Tenants ment Ownership 4Q08 3Q08 4Q07 (sqm) 4Q08 (1)
1. Ladprao Greenfield Leasehold 17,719 56 97% 99% 86%
An anchor moved to CentralPlaza Pinklao 2. Pinklao A Greenfield Leasehold 22,426 48 85% 86% 91%
3. Pinklao B Greenfield Leasehold 11,334 40 92% 84% 75% Opened in 1Q06 after completion its conversion from residential to Grade B office building. 4. Bangna Acquisition Freehold 10,007 27 97% 100% 98%
5. CentralWorld Acquisition Leasehold 82,794 109 96% 96% 95%
Total 144,280 280 94% 94% 93%
Leaseable area (1) Occupancy Rate (2) Residential (sqm) 4Q08 3Q08 4Q07
1. Bangna 1,907 55% 61% 57% Strata title, Asset for sales
2. Langsuan 4,466 75% 81% 74% Leasehold furnished apartment
Total 6,373 69% 75% 69%
Note 1: Including retail space. Excluding storage. Note 2: Percentage based on leaseable area. 10 Contract Types
Types Revenue recognition
72% Fixed Rent 72% • Increase rental rate by Rental income Short term rent 6-8% p.a. • realize on monthly basis • Approx. 1/3 of rental contract (up to 3 years) expires every year Service fee Monthly basis collection 28% • realize on monthly basis % of Sales Utility fee • Tenants: Food centers, • realize on monthly basis Contracts Cineplex and international brands such as “Mac Donalds, KFC ...” Up-front payment 28% • Percentage ranges from 10% - 30% of sales • realize throughout lease contract period on Long term lease • Includes minimum guarantees straight line basis (up to 20 years) Up-front collection Service & Utility fees • Collect and realize on monthly basis
Note1: Percentage based on occupied area. Source: Company estimates as of 31 Dec 2008. 11 Effective Rental Rate
FY08 Effective Rental Rates Growth of 3% yoy (retail tenant only)(1)
For FY08, effective rental rate for retail space averaged Bt1,259 per sqm per month, representing a growth of 3.2% yoy. The below figures are effective rental rates. (net discount given to groups of tenants at CentralWorld and at newly opened CentralPlaza Chaengwattana project during its initial stage ).
yoy 3% 4.2%yoy 1,350 3.6%yoy
oy 1,284 1,291 1,300 y 1,259 5% 1,240 1,240 1,250 1,220
1,200 1 2%yoy 1,164
1,150
1,1001 0%yoy 1,040 1,050
Bt per sqm per month 1,000 945 950
900
850
8002004 2005 2006 2007 2008 4Q07 4Q08 4Q07 4Q08 Including Excluding Newly Opened CentralPlaza Newly Opened CentralPlaza Chaengwattana Project Chaengwattana Project
Note 1 : Effective retail rental rates after discount. Source: Company estimates as of 31 Dec 2008. 12 People Traffic Flow By Properties
200,000 4Q08 overall traffic flow increased by 6% yoy(1)
180,000
160,000 4Q2007 3Q2008 4Q2008 140,000
120,000
100,000
80,000
60,000 person per day (average) 40,000
20,000
0 Lardprao Pinklao Bangna Rama 3 Rama 2 CentralWorld Ram Indra Pattaya ChiangM ai Rattanathibet Chaengwattana % YoY Growth 2% 2% 14% 18% 26% (1%) 13% (27%) (17%) 22%n/a
On-going strategic marketing events and promotions, along with the expansion of surrounding residential community helped attract more visitors and enhance the traffic flow to Rama 2.
Significant increase in traffic at Rattanathibet notably from the openings of new Pet Zone, Take-home food section, and additional parking space.
Significant decrease in traffic at Pattaya and Chiangmai, the popular tourist destinations in Thailand, resulted from the closure of the international airports and persisting of political uncertainty .
Note 1 : To compare with the same base, 4Q08 overall traffic flow figure excluded traffic flow at newly opened CentralPlaza Chaengwattana. However, if include that of CentralPlaza Chaengwattana, 4Q08 traffic flow increased by 16% yoy. 13 Source : Company estimates as at 31 Dec 2008. Developments Newly Opened Project – CentralPlaza Chaengwattana
Project Highlights Investment Cost (1) 5,300 MB Program - Shopping Center (N.L.A) 65,000 sqm (2) - Office (G.A) 27,000 sqm - Parking (G.A) 110,000 sqm (3,200 cars)
Location Suburb of Bangkok (5 km from new government center) Construction Period Sep 2006 to Nov 2008 Opening - Shopping Center 27 November 2008 - Office Building April 2009 Stores and Services Unrivaled 8 mega-stores and more than 300 retail shops - Shopping - Dining Central Department Store, Over 50 restaurants Tops Marketplace, Food Park 700 seats
SuperSports, PowerBuy, - Entertainment /2 Office Depot, B2S SFX Cinema 10 theaters Fitness First Occupancy rate at the opening approximately 85%
Note1: Including land and construction cost of shopping center, office building, and parking building. Note2: Excluding Central Group’s area (department store and CRC specialty stores), however those stores will contribute to people traffic into the shopping center. 15 Newly Opened Project – CentralFestival Pattaya Beach
Project Highlights Investment Cost (1) 4,200 MB Program - Shopping Center (N.L.A) 58,500 sqm (2) - Hotel (G.A) 27,000 sqm (1) (340 rooms) - Parking (G.A) 66,000 sqm (1,935 cars)
Location Pattaya Beach, Chonburi Province (Tourist destination and approximately 1 1/2 hours drive east of Bangkok) Construction Period Jan 2007 to Jan 2009 Opening - Shopping Center 23 January 2009 - Hotel August 2010 (tentative) Stores and Services Unrivaled 5 mega-stores, more than 370 retail shops, and over 70 beach-themed restaurants and trendy bars
- Shopping - Dining /2 Central Department Store, Facing 360 o panoramic sea views Central Food Hall, Food Loft and Food Park SuperSports, PowerBuy, - Entertainment Asian Bazaar, Fashion Plus SFX Cinema and SF Strike Bowl
Occupancy rate at the opening approximately 75%
Note1: Including land and construction cost of shopping center and parking building. Excluding construction cost of hotel which is under consideration to sub-lease. Note2: Excluding Central Group’s area (department store and CRC specialty stores), however those stores will contribute to people traffic into the shopping center. 16 Future Projects – CentralPlaza Chonburi
Project Highlights Development Process Status / Time line Investment Cost (1) 2,000 MB Construction Period Jan 2008 to May 2009 Program Construction Progress 76% of total construction (2) - Shopping Center (N.L.A) 39,700 sqm Leasing Progress Jan 2008 to May 2009 - Parking (G.A) 53,000 sqm (1,514 cars) - Confirmed joint developers (3) Robinson Department Store, Location Chonburi Province Carrefour (Vicinity of industrail parks and - Confirmed anchors Tops Supermarket, SuperSports, 1 hour drive east of Bangkok) B2S, PowerBuy, Office Depot, SF Cinema
- Confirmed retails 85% of leaseable area CentralPlaza Chonburi - Overview Project Opening May 2009
Note1: Including land and construction cost of shopping center and parking building. Note2: Excluding areas belonged to co-developers; Robinson Department Store and Carrefour. 17 Note3: Area does not belong to CPN, however the stores will contribute to people traffic into the shopping center. Future Projects – CentralPlaza Khon Kaen
Project Highlights Development Process Status / Time line Investment Cost (1) 3,200 MB Construction Period May 2008 to Dec 2009 Program Construction Progress 28% of total construction - Shopping Center (N.L.A) 48,700 sqm (2) Leasing Progress Jan 2008 to Dec 2009 - Parking (G.A) 57,500 sqm (1,500 cars) - Confirmed joint developers (3) Robinson Department Store, Location Khon Kaen Province - Confirmed anchors Tops Supermarket, SuperSports, Northeast of Thailand B2S, PowerBuy, SF Cinema, (Business and education center Fitness First of the northeast region) - Confirmed retails 56% of leaseable area Opening December 2009 (Tentative) CentralPlaza Khon Kaen - Overview Project
Note1: Including land and construction cost of shopping center and parking building. Note2: Excluding areas belonged to co-developers; Robinson Department Store and Carrefour. 18 Note3: Area does not belong to CPN, however the stores will contribute to people traffic into the shopping center. Future Projects – CentralPlaza Rama 9
CentralPlaza Rama 9 Investment Cost (1) 4,000 - 4,500 MB Program Shopping center / Department Store / Office Building / Parking - Under Study Location 5 km from Bangkok CBD area Construction Period Tentative 4Q 2008 - 2Q 2012 Progress Entered into a 30-year land lease agreement with the first right to renew the contract for 10 years. Construction permit approved / Under detail feasibility study Opening 2Q 2012 (Tentative)
/2
Note1: Including land and construction cost of shopping center and parking building. 19 Potential Sites
Potential Sites
Project : Pre-Cadet School Location : Rama 4 Road & Wireless Road (Bangkok CBD area) Progress : The Crown Property Bureau announced that CPN was awarded a 30-year lease to develop a 40-rai land plot of the former Pre-Cadet School on Rama IV Rd. CPN will enter into lease agreement after site clearing completion.
Chiangm ai Map Project : Chiangmai 2 Location : Super highway (North of Chiangmai) New land bank Progress : In April 08 CPN has acquired a 68-rai freehold land plot on Super Highway (next to Doi Saket Road). The site is approximately 15-minute drive east of
C e n tra lP la za existing CentralPlaza Chiangmai Airport. Chiangm ai Airport : Construction permit approved. Under detail feasibility study. Overseas
Rationale : Geographic and income diversifications. : Opportunities to share region’s growth in retail sector through cautious investment. /2 Location : China, India, Vietnam, etc.
20 Capital Expenditure Profile
Major capital expenditure will be used to develop 8 new projects (8 shopping centers and 1 office) and renovate 6 existing shopping centers. Financing plan for future expansion includes:
Cash flow from operation
Loan: debenture and/or project financing Property fund (Bt mil)
Properties 2008 2009 2010 2011 2012 CentralWorld (Phase 1 & 2) 460 130 CentralPlaza Chaengwattana 1,960 1,120 CentralFestival Pattaya Beach (1) 1,610 1,600 1500 CentralPlaza Chonburi 950 880 100 CentralPlaza Khon Kaen 730 800 600 CentralPlaza Rama 9 400 300 1,620 1,850 600 Enhancement Projects 500 600 1,500 1,000 500
Potential Projects 660 190 700 2,000 3,750
Total 7,270 5,620 6,020 4,850 4,850
Source: Company estimates as at 31 Dec 2008. Note 1: Including an approximate investment cost of of shopping Complex and hotel 21 Future Leaseable Area & Occupancy Rate
(1) Retail Leaseable Area and Occupancy Rate (Shopping Center Only)
rowth area g eable il leas o 2012 Reta 2008 t from sqm by 31% % Occupancy Ram a 9 98% 98% 1,200,000 96% 95% 100% 95% 97% Pattaya Beach 95% 94% 95% 93% 92% 94% 1,000,000 90% Khon Kaen
800,000 Chonburi 80%
600,000 Chaengwattana 70% 400,000 CentralWorld - new retail space 60% 200,000 Existing area
0 50% (2) Occupancy rate 2001 2002 2003 2004 2005 2006 2007 2008 2009F 2010F 2011F 2012F (%)
Leaseable area (Sq.m.) 2001 2002 2003 2004 2005 2006 2007 2008 2009F 2010F 2011F 2012F Shopping Center (1) 281,623 518,894 598,587 591,007 617,299 684,587 709,489 760,636 907,536 907,536 907,536 997,536 Office Building 49,833 49,833 49,833 134,099 134,038 145,700 144,791 144,791 171,791 171,791 171,791 171,791 Residential 16,825 16,825 16,336 16,336 6,373 6,373 6,373 6,373 6,373 6,373 6,373 6,373 Total 348,281 585,552 664,756 741,442 757,710 836,660 860,653 911,800 1,085,700 1,085,700 1,085,700 1,175,700
Note1: Company estimates as at 31 Dec 2008. Including leaseable area of Rama 2 & 3 which were partially transferred to CPNRF, but still under CPN’s management. 22 Note2: Including CentralWorld’s original space. Financial Highlight Consolidated Performance
Bt mil 10,000 9,311
9,000 8,282 8,000 7,000
6,000 5,000 4,000 3,031 3,000 2,377 2,424 2,619 2,138 2,186 2,000 1,783 841 1,000 573 630 477 449 306 0 4Q07 3Q08 4Q08 FY07 FY08
Total revenue Operating profit Net profit
Growth (% Y-o-Y) 2005 Adj (2) 2006 2007 (3) 2008 4Q08 Y-o-Y 4Q08 Q-o-Q Total revenue (1) 11% 7% 14% 12% 13% 2% Operating profit 10% 8% (7%) 16% 40% (25%) Net profit 7% 17% (7%) 39% 56% (17%)
Same store growth (4) 10% 13% 14% 11% 9% (1%)
Note1: Total Revenue includes rental & service income, food & beverage income, and other income. Excluding interest income and share of profit from investment. Note2: Excluding gain from CPNRF of Bt2,885 mil and impairment of Bt406.6mil in 2005 performance. 24 Note3 :Excluding one-time income of Bt214.3 mil in 4Q07 and FY07. Note4: Same store growth 2006 compared with 2005 excluded revenue from Rama2&Rama3. For that of 2008 and 4Q08 excluded newly opened Chaengwattana project. Revenue Breakdown
Revenues Comments (FY07 vs. FY08)
Revenue increased by 12% y-o-y. Y The increase was mainly due to Bt mil Yo Retail 12% 10,000 • Increased service income after adjustment of CAM 9,311 charge rate in Jan 08. 9,000 8,282 • Higher contribution from CentralWorld upon cutting 8,000 down special discount given to selected tenants and escalating occupancy rate. 7,000 • Rental growth achieved at all properties. 6,000 Y • Additional incomes from the newly opened Yo 3% CentralPlaza Chaengwattana. 5,000 1 4,000 Revenue increased by 7% y-o-y. 2,423 Office The increase was mainly due to higher rental rate for 3,000 2,378 new and renewed contracts signed at The Offices at 2,138 2,000 CentralWorld.
1,000 Revenue increased by 21% y-o-y. 0 F&B This was mainly driven by 4Q07 3Q08 4Q08 FY07 FY08 • Re-opening of food parks at CentralPlaza Rama 3 and CentrallPlaza Pinklao aftter completion of their (3) (3) 4Q07 3Q08 4Q08 FY07 FY08 % YOY renovations. Retail 1,676 1,821 1,864 6,466 7,244 12% • Additional contribution from food center at the newly Office 204 220 220 809 868 7% opened CentralPlaza Chaengwattana. F&B 98 112 124 378 456 21% (1) Other rental 7 8 7 28 31 11% (2) Other income 153 217208 601 712 12%
Note1: Other rental includes revenue from residential projects and water & amusement park. Note2: Other income in 3Q08 includes a Bt40mil one-time income from sharing renovation cost (cost charge back to tenants) at CentralPlaza Bangna. 25 Note3 :Excluding one-time income of Bt214.3 mil in 4Q07 and FY07. Cost of Rental and Service Breakdown
Cost of Rental & Service Comments (FY07 vs. FY08)
Cost increased by 10% y-o-y. Bt mil The increase was due to Y Retail 6,000 Yo 9% Higher depreciation and amortization at CentralWorld upon the further completion of its enhancement project. 4,890 5,000 Additional depreciation and amortization at newly 4,473 opened CentralPlaza Chaengwattana.
4,000 An estimated higher lease payment of CentralPlaza Lardprao.
3,000 oY Cost decreased by 4% y-o-y. %Y 17 Office The continuous decrease was due to lower utility cost 2,000 benefiting from the implementation of energy saving 1,332 1,224 program. 1,142 1,000 Cost increased by 30% y-o-y. F&B The increase was in line with the increase in F&B sales. 0 4Q07 3Q08 4Q08 FY07 FY08
4Q07 3Q08 4Q08 FY07 FY08 % YOY Retail 908 989 1,079 3,583 3,943 10% Office 149 134 141 567 543 (4%) F&B 75 94 103 288 373 30% Others 9 8 9 35 30 (14%)
26 Selling and Administration Expenses Breakdown
Selling and Administration Expenses Comments (FY07 vs. FY08)
Personnel expenses increased by 24% y-o-y. People This was mainly due to increase in number of Bt mil Y Yo employees to support business expansion. 3% 1,800 1,557 1,600 1,515
1,400 Marketing expenses decreased by 11% y-o-y. Ads & It was managed through top-line driven basis. 1,200 Promo 10 If excluding the one-time expense of the opening %Y 1,000 oY celebrations of the newly opened CentralPlaza Chaengwattna, the advertising and promotion 800 580 expenses in FY08 represented 5.4% of total 600 520 revenues, compared to that of 7.4% in 2007. 360 400
200
0 4Q07 3Q08 4Q08 FY07 FY08
4Q07 3Q08 4Q08 FY07 FY08 % YOY
People 159 158 218 548 681 24% Ads&Promo 258 103 192 566 506 (11%) Depreciation 20 19 25 69 79 15% Others 143 80 85 331 290 (12%)
27 Key Ratios
Corporate Performance
Key ratios 2005 Adj. 2006 2007 (1) 2008 4Q07 (1) 4Q08 Gross profit margin (%) 45.5% 43.6% 41.8% 43.1% 42.5% 39.9% Operating profit margin (%) 26.9% 26.4% 27.9% 26.2% 23.7% 18.7% Net profit margin (%) 20.7% 21.7% 18.7% 22.2% 14.1% 18.3% ROA (%) 4.7% 5.0% 4.4% 4.6% 3.3% 4.6% ROE (%) 15.4% 14.3% 12.5% 15.9% 9.6% 13.4%
Business Line Performance
Gross Profit Margin (%) 2005 Adj. 2006 2007 (1) 2008 4Q07 (1) 4Q08 Retail 51.2% 47.9% 44.6% 42.1% 45.5% 42.1% Office 5.8% 24.6% 29.9% 37.4% 28.4% 36.0% F&B 23.1% 23.4% 23.8% 18.2% 22.7% 16.9%
Note1: Excluding non-recurring income of Bt214.3mil in 4Q07 and FY07. 28 Capital Structure
Bt mil Net D/E (Times) 18,000 1.0 16,445 16,000 15,173 13,639 14,000 12,574 0.8 11,789 12,045 0.8 12,000 11,041 11,112 0.6 10,000 0.6 8,000 0.6 6,140 0.4 6,000 0.4 3,691 3,983 3,677 4,000 0.2 2,000 0 0.0 2005 2006 2007 2008 Cash and Current Investment Interest Bearing Debt Equity Net Interest Bearing Debt to Equity
“ CPN’s Policy is to Maintain Net Debt to Equity at Lower Than 1.0 ”
Key ratios 2005 Adj. 2006 2007 (2) 2008 4Q07 (2) 4Q08 Net interest bearing debt to equity (times) (1) 0.5 0.6 0.6 0.8 0.6 0.8 Total debt to equity (times) 1.7 1.7 1.7 1.9 1.7 1.9 Interest coverage (times) 6.0 6.0 7.2 7.2 9.3 6.7
Note1: Interest bearing debt excludes loans from related parties. Note2: Excluding non-recurring income of Bt214.3mil in 4Q07 and FY07. 29 Debt Analysis
Outstanding Borrowings Bt 16,445 mil (1) Financing Cost Bt mil 700 LT-Bond 621 ST-Loan 581 36% 14% 600 543 543 Interest Expense 500
400
300 ST-Bond 15% 200 166 127 122 129 100 LT-Loan 35% As of 31 Dec 2008 0 (3) Weighted Avg. 2005 2006 2007 2008 1Q08 2Q08 3Q08 4Q08 Interest Rate 5.3% 5.6% 5.5% 5.2% 5.2% 5.1% 5.0% 5.0% Fixed vs. Floating Mix of Existing Borrowings (2)
Bt m il Fix e d Floa ting 20,000 16,445
15,000 12,045 11,112 35% 11,674 9,229 6,384 10,000 38% 39% 40% 65% 44% 47% 5,000 62% 61% 60% 56% 53% 0 2006 2007 2008 2009FFF 2010 2011 Fixed Rate 5.4% 5.1% 4.8% 4.9% 4.7% 4.5% Floating rate MLR-1.35% MLR-1.39% MLR-1.65% MLR-1.72% MLR-1.81% MLR-1.92%
Note 1 : Excluding loans from related parties of Bt3.43mil as at 31 Dec 2008. Note 2: At year end. 30 Note 3: Weighted average interest rate was derived from interest expenses including interest capitalization for project under development. Share and Dividend Performance
CPN Share price and Volume Share Price Volume (Bt/share) ('000 shares)
40 30,000 Share Price Movement
35 25,000 Close Volume 30 20,000 25 1Yr 3Yr 5Yr 20 15,000
15 10,000 CPN (43%) (3%) 44% 10 SET Index (48%) (38%) (42%) 5,000 5 Property Index (53%) (47%) (71%) 0 0 Jul-07 Apr-08 Jan-05 Jun-05 Apr-06 Jan-03 Jun-03 Oct-03 Sep-08 Sep-06 Feb-07 Mar-04 Nov-07 Aug-04 Nov-05
Share Overview Dividend Summary
Par Value (Bt) 1.00 2005 2006 2007 2008 Stock Price (Bt) 14.30 Par Value (Bt) 1.00 1.00 1.00 1.00 EPS FY 2008 (Bt/share) 1.00 Dividend (Bt/share) 0.40 0.31 0.33 0.33 P/E (Times) 14.30 Dividend Paid (Bt mil) 872 675 719 719 P/BV (Times) 2.05 Dividend Payout Ratio 26%* 40% 40% 33% Market Capitalization (Bt mil) 31,157 Notes: Dividend policy is paid annually not less than 40% of net profit Share Capital (Shares) 2,178,816,000 (unless there is a compelling reason against this). : Dividend payout ratio of 26% in 2005 was derived from 40% of profit excluded extra gain (Bt 530 mil) plus 18% of gain from set up CPNRF(Bt 362 mil). : Dividend of Bt0.33/share for 2008 performance is subject to an approval of AGM on April 30, 2009.
Source: SETSmart and Company data as of 31 Dec 2008. 31 Appendix Bangkok Property Market Overview
Retail Property Office Property
Bangkok retail supply in 2008 increased by 313,000 sqm to 5.04 mil Bangkok office supply in 2008 increased by 250,000 sqm to a total sqm. Majority of the supplies is in the forms of shopping mall. stock of 7.79 mil sqm. Moreover, the supplies grew mostly in suburb of Bangkok. Average vacancy in 2008: Average vacancy in 2008 was 7.4%, up from 5.4% in 2007, due to Grade A increased from 6.5% in 2007 to 11.4% in 2008. slower take-up rate of new retail space. Grade B unchanged from 14.8% in 2007 to 14.5% in 2008 Rental rates have generally been stable due to steady new supply and fragile economic condition. Rental rate growth in 2008 was relatively slow : Total new retail supply is expected for 2009 is approximately Grade A increased by 5.5% yoy. 350,000 sqm, representing an increase of 6.9% yoy and mostly in Grade B rose by 2.0% yoy. the forms of shopping/community malls and mixed-use developments compliment to commercial/residential projects. New office supply of approximately 186,000 sqm is expected to come in 2009, representing an increase of 2.4% from 2008.
Retail Supply Vacancy 6,000 5,045 7.0%
4,732 6.6% 6.0% Grade A Grade B 5,000 4,336 4,556 +5.5% y-o-y 3,998 5.0% Bt/sqm/month 4,000 5.4% 5.4% 800 721 4.7% 4.0% 674 684 + 2.0% y-o-y
sqm 3,000 700 3.0% 595 3.5% 600 2,000 506 496 506 2.0% 475 500 428 1,000 1.0% 400 365
0 0.0% 300 2004 2005 2006 2007 2008 200
New Supply 45,000 338,000 220,000 176,000 313,000 100 (sqm) 0 Total Supply 3,998,000 4,336,000 4,556,000 4,732,000 5,045,000 2004 2005 2006 2007 2008 (sqm)
Source : CBRE and the Company’s estimate Retrieved as of 31 Dec 2008. 33 Balance Sheet Summary
Bt million 4Q07 3Q08 4Q08 FY07 FY08 Cash & cash equivalent 1,026 1,194 2,407 1,026 2,407 Current investment 2,957 1,789 1,269 2,957 1,269 Other current assets 1,239 1,271 1,716 1,239 1,716 Investment in associate 2,306 2,313 2,355 2,306 2,355 Property & equipment, net 28,975 32,326 31,661 28,975 31,661 Other non-current assets 701 1,041 4,376 701 4,376 Total assets 37,205 39,934 43,784 37,205 43,784 Current portion of long-term debt 1,234 3,370 3,320 1,234 3,320 Short-term loan 0 1,500 1,450 0 1,450 Other current liabilities 3,235 2,600 3,580 3,235 3,580 Long-term debt 10,811 9,380 11,675 10,811 11,675 Unearned rental / service income 4,959 4,714 4,817 4,959 4,817 Deposits received from customers 2,405 2,778 2,858 2,405 2,858 Other non-current liabilities 921 890 910 921 910 Total liabilities 23,565 25,232 28,610 23,565 28,610 Issued and Paid-up Share Capital 2,179 2,179 2,179 2,179 2,179 Retained Earnings 8,721 9,831 10,307 8,721 10,307 Total equities 13,639 14,702 15,173 13,639 15,173
34 Income Statement Summary
Bt million 4Q07 3Q08 4Q08 FY07(1) FY08 Rental & service income and F & B sales 1,985 2,160 2,216 7,681 8,599 Rental & service income 1,887 2,048 2,091 7,303 8,142 F & B sales 98 112 124 378 456 Cost of rental & service and F & B 1,142 1,224 1,332 4,473 4,890 Cost of rental & service 1,066 1,131 1,229 4,185 4,516 Cost of F & B sales 75 94 103 288 373 Gross profit 843 936 883 3,208 3,709 Other income 153 217 208 601 712 Interest income 34 48 58 110 167 Administrative expenses 581 360 520 1,515 1,557 Operating profit 449 841 630 2,404 3,031 Share of profit (loss) from investments 106 84 123 316 362 Interest expense 86 129 166 581 543 Income tax expense 162 221 107 563 651 Net loss (gain) of minority interest (2) (2) (3) (7) (13) Net profit 306 573 477 1,569 2,186
EPS (Bt) 0.14 0.26 0.22 0.72 1.00
Note1: Excluding non-recurring income of Bt214.3mil in 4Q07 and FY07. 35 Borrowings: 31 December 2008
TRIS Rating Co., Ltd. has affirmed CPN’s senior debentures at “A+” with “Stable Outlook” in July 2008.
Loan (Issued Date) Bt mil Terms
Bill of Exchange 950 3 – 6 month, 3.80% Promissory Note 684 3 month - fixed deposit rate, 3.50% Unsecured Bond (Mar’04) 1,000 5 years, 4.2% Unsecured Bond (Mar’04) 1,500 6.8 years, 5.24% Unsecured Bond (Jun’06) 1,500 3 years, 6.39%, MLR-1.55% Unsecured Bond (Jun’07) 3,000 5 years, 4.25% Unsecured Bond (Sep’08) 1,500 3 years, 4.80% Property Fund Pinklao (Dec’02) 463 10 years, MLR-0.5%(amortising) Property Fund Pinklao (Dec’02) 154 10 years, 7% (amortising) Property Fund Centralworld (Jun’03) 1,359 10 years, MLR-1.25% (amortising) Property Fund Centralworld (Jun’03) 906 10 years, 6.125% (amortising) Property Fund Bangna (Mar’03) 752 15 years, MLR-1.25% (amortising) Property Fund Bangna (Mar’03) 177 15 years, 6% (amortising) Project Finance – Chaengwattana (Oct’08) 2,500 7 years, MLR-2% (amortising) Total (Long Term Borrowings & Current Portion) 16,445 Less Cash and Current Investments (3,677) Net 12,768
36 Summary of CPN’s Leasehold Payment
Leasehold payment of totaling Baht 16,178.3 million comprises:
– Up-front payment of totaling Baht 2,162.3 million paid in 5 annual installments – Annual payment of totaling Baht 14,016.0 million
(Baht million)
Up-front Annual Lease Up-front Annual Leasehold Date of Payment Total Date of Payment Total Payment Payment Payment Payment
17 Dec 2018 - 777.68 777.68 Date of signing the new 551.41(1) 86.85 638.26 sub-lease agreement 17 Dec 2019 - 824.34 824.34
17 Dec 2020 - 873.81 873.81 17 Dec 2009 368.24 92.07 460.31 17 Dec 2021 - 926.23 926.23 17 Dec 2010 390.34 97.59 487.93 17 Dec 2022 - 981.81 981.81 17 Dec 2011 413.75 103.45 517.20 17 Dec 2023 - 1,040.72 1,040.72 17 Dec 2012 438.59 109.65 548.24 17 Dec 2024 - 1,103.16 1,103.16 17 Dec 2013 - 581.13 581.13 17 Dec 2025 - 1,169.35 1,169.35 17 Dec 2014 - 616.00 616.00 17 Dec 2026 - 1,239.51 1,239.51 17 Dec 2015 - 652.96 652.96 17 Dec 2027 - 1,313.88 1,313.88 17 Dec 2016 - 692.14 692.14
17 Dec 2017 - 733.66 733.66 Total 2,162.33 14,015.98 16,178.31
Note 1 : The first up-front payment includes CID’s operating costs regarding the new lease agreement; leasehold right registration fees, professional fees and interest charged on the first leasehold installment, for instance. 37