Central Pattana Public Company Limited Management’s Discussion and Analysis (MD&A) Consolidated Financial Results: 2Q13 Performance Overview Central Pattana Public Company Limited (“CPN”) has continued to expand its business according to the strategic plan. During 2Q13, CPN completed its expansion of CentralPlaza Ubonratchathani. New developments remain intact with two more new projects, CentralFestival Chiangmai and CentralFestival Hatyai, to be launched in the fourth quarter. While the domestic expansion continues, CPN is also exploring the expansion opportunities overseas. CPN signed a Joint Venture Agreement with I-City Properties Sdn Bhd (“ICP”) to develop a regional shopping mall in Selangor Darul Ehsan, Malaysia. On April 26, 2013, Shareholders approved the par split from Baht 1 to Baht 0.5 each, effective on May 7, 2013. The shareholders also approved the increase of the registered capital of the Company up to 130,368,000 shares on a private placement. The final offering price was Baht 50.75 per share and newly issued shares were traded on the SET on May 27. The registered capital of the Company is 4,488,000,000 shares or 2,244 MB after the placement. The net proceeds (after expenses) from the offering is 6,549 MB. The primary objectives of this event were to strengthen its capital base to capture more growth opportunities in the future and to maintain our dominant position as a leading regional retail property developer. Moreover, a part of proceeds is used to repay debt and/or to reserve for working capital. Under the economic uncertainty caused by both external factors such as world economy slowdown, QE tapering and internal factor from political instability that might affect investment and consumer confidence, CPN can maintain the growth of revenue and profit in 2Q13. CPN reported the consolidated net profit of 1,427 MB, up 22% y-o-y and a 2Q13 total revenues of 5,116 15% growth in total revenues. This was mainly due to the strong growth in MB, up by 15% y-o-y with a operating performance of all existing projects and strong contributions from 22% y-o-y growth in net the launch of CentralPlaza Udonthani after renovation and expansion, profit to 1,427 MB. CentralPlaza Suratthani, CentralPlaza Lampang, and CentralPlaza Ubonratchathani. Central Pattana Public Company Limited Management’s Discussion and Analysis (MD&A) 1 of 9 Total revenues were down Compared to the preceding quarter, 2Q13 net profit dropped by 14% mainly 2% q-o-q with a drop of from low season of hotel business and from one-time expense of 69MB- 14% q-o-q in normal net capital increase advisory fee. Total revenues decreased by 2% q-o-q, mainly profit. from the decrease of revenue from hotel business due to a seasonal effect. Financial Performance Currently, CPN manages 21 shopping centers, 7 office towers and 2 residential properties. In addition, CPN owned 2 hotel properties but outsourced their management. Total Revenues Revenue from rent and services 2Q13 consolidated revenue from rent and services registered 4,439 MB, a 17% y-o-y increase. The increase was primarily due to the following factors: • The completion of the renovation and expansion phase of CentralPlaza Udonthani at the end of May 2012. • The opening of new projects – CentralPlaza Suratthani and CentralPlaza Lampang in 4Q12 and CentralPlaza Ubonratchathani on April 5, 2013. • Excluding the above new projects, same store rental and service revenues for 2Q13 increased by 11% y-o-y. This is due to continuous improvement in operations of existing malls from higher average rental rate and lower rental discount in many projects especially at CentralWorld. • 2Q13, the average rental rate and occupancy rate of all retail properties were 1,499 Baht/Sqm./mth and 97% respectively. The same store average rental rate grew 6.5% y-o-y from 1,454 to 1,548 Baht/Sqm./mth. A q-o-q comparison showed a slight increase in revenue. This improvement was mainly from the full quarter revenue realization of CentralPlaza Ubonratchathani. However, revenue from CentralPlaza Bangna and CentralPlaza Rama2 slightly decreased due to a minor renovation and remerchandising mix. Revenue from food and beverage In 2Q13, the in-mall food court business recorded a 24% y-o-y sales growth, mainly from the new food courts at CentralPlaza Suratthani, CentralPlaza Lampang, and CentralPlaza Ubonratchathani. Compared to the previous quarter, 2Q13 revenue from food and beverage increased by 11%. This was due to the new food court at CentralPlaza Ubonratchathani. Central Pattana Public Company Limited Management’s Discussion and Analysis (MD&A) 2 of 9 Revenue from hotel operation Hotel operations are considered CPN’s non-core business. In 2Q13, revenues from its 2 hotels amounted to 201 MB, increased by 24% y-o-y. This was mainly from the higher Rev/Par and high occupancy rate at both Centara Hotel & Convention Centre Udonthani and Hilton Pattaya Hotel. On a q-o-q basis, revenues from hotel operation decreased by 17% due to a seasonal effect in the second quarter. Total Costs Cost of rent and services Cost of rent and services constituted utilities, security & cleaning, on-site personnel, land rental, depreciation & amortization, repair & maintenance costs and insurance premium and property tax of properties owned to earn rentals. In 2Q13, cost of rent and services amounted to 2,349 MB, up 13% y-o-y from the newly opened malls as well as the renovated malls. On a q-o-q basis, cost of rent and services increased by 4% mainly from the opening of CentralPlaza Ubonratchathani, together with the increased cost from lease back some area at CentralPlaza Bangna. Cost of food and beverage Cost of food and beverage constituted costs of operating in-mall food centers, as well as depreciation and repair & maintenance costs of food center equipment and furniture. In 2Q13, cost of food and beverage stood at 170 MB, up 12% y-o-y and 3% q-o-q. The cost of food and beverage still increased proportionately lower than the increase in revenue from food and beverage. Cost of hotel operation 2Q13 cost of hotel operation raised 16% y-o-y from higher revenue from hotel operation. However, cost of hotel operation decreased 4% q-o-q due to lower revenue from hotel operation. Administrative Expenses Total operating and administrative expenses constituted expenses on personnel, marketing & promotion, office supplies, professional fees, and depreciation of office equipment and hotel properties. Total operating and administrative expenses in 2Q13 stood at 788 MB, a rise of 30% y-o-y from expenses of the newly opened malls and additional personal expense of business expansion. Central Pattana Public Company Limited Management’s Discussion and Analysis (MD&A) 3 of 9 Compared to last quarter, 2Q13 total operating and administrative expenses increased by 10%, which was mainly due to the one-off expenses for the grand opening events at CentralPlaza Ubonratchathani. Gross Profit Ratio & Operating Profit Ratio The Gross Profit ratio for 2Q13 was 49% from 48% in 2Q12 and the Operating Profit ratio this quarter was 35%, stable from last year. Net Profit In 2Q13, CPN reported a consolidated net profit of 1,427 MB, up 22% y-o-y. Compared to the preceding quarter, net profit dropped 14% as reasons mentioned earlier. Central Pattana Public Company Limited Management’s Discussion and Analysis (MD&A) 4 of 9 Table 1: Operational Statistics Net leaseable Occupancy rate (%) Retail property area (sqm.) 1Q13 2Q12 2Q13 Lardprao 47,779 98% 100% 99% Ramindra 17,156 99% 100% 100% Pinklao 57,501 99% 100% 100% Pattaya Center 15,226 97% 97% 96% Ratchada-Rama3 55,770 94% 100% 93% Chiangmai 71,777 94% 98% 95% Bangna 58,112 90% 96% 90% Rama2 91,803 99% 100% 96% Rattanathibet 77,238 100% 98% 100% CentralWorld 187,054 95% 98% 95% Chaengwattana 65,864 94% 95% 96% Pattaya Beach Festival 56,914 96% 96% 98% Udonthani 68,795 99% 98% 99% Chonburi 40,392 97% 94% 97% Khonkaen 50,164 95% 96% 96% Chiangrai 21,459 100% 98% 98% Phitsanulok 24,974 99% 100% 99% Grand Rama9 59,505 99% 99% 99% Suratthani 32,604 96% n.a 97% Lampang 21,568 98% n.a 100% Ubonratchathani 31,301 n.a n.a 99% Total 1,152,956 96% 98% 97% Net leaseable Occupancy rate (%) Office area (sqm.) 1Q13 2Q12 2Q13 Lardprao 16,250 97% 99% 98% Pinklao A 22,426 98% 98% 100% Pinklao B 11,334 94% 98% 95% Bangna 10,007 98% 97% 95% CentralWorld 82,806 98% 97% 97% Chaengwattana 19,877 87% 85% 90% Grand Rama9 6,454 95% 94% 100% Total 169,154 96% 96% 97% Central Pattana Public Company Limited Management’s Discussion and Analysis (MD&A) 5 of 9 Net leaseable Occupancy rate (%) Residential area (sqm.) 1Q13 2Q12 2Q13 Central City Residence Bangna 1,907 48% 47% 39% Langsuan Colonade 4,466 74% 65% 73% No. of available Occupancy rate (%) Hotel rooms 1Q13 2Q12 2Q13 Centara Udon Thani Hotel 259 81% 53% 55% Hilton Pattaya Hotel 302 88% 76% 83% Table 2: Consolidated Results Summary 2Q12 1Q13 2Q13 % YoY % QoQ Consolidated earnings (MB) Change Change Revenue from rent and services 3,792 4,424 4,439 17% 0% Retail 3,549 4,326 4,337 22% 0% Office 238 93 96 (59%) 4% Other supportive businesses 5 5 5 (2%) 4% Revenue from hotel operation 163 244 201 24% (17%) Revenue from food and beverage 180 200 222 24% 11% Other income 298 344 254 (15%) (26%) (1) Total revenues 4,432 5,211 5,116 15% (2%) Cost of rent and services 2,085 2,250 2,349 13% 4% Retail 1,930 2,196 2,296 19% 5% Office 150 50 48 (68%) (4%) Other supportive businesses 5 4 5 (4%) 14% Cost of hotel operation 64 78 74 16% (4%) Cost of food and beverage 151 164 170 12% 3% Total costs 2,301 2,492 2,593 13% 4% Operating profit 1,541 2,026 1,770 15% (13%) Net profit 1,171 1,656 1,427 22% (14%) Net profit excluding non-recurring items 1,171 1,656 1,427 22% (14%) EPS (Bt) excluding non-recurring items before par split 0.54 0.76 0.66 22% (14%) EPS (Bt) excluding non-recurring items after par split 0.26 0.37 0.32 22% (14%) (1) Mostly from accounting adjustment for financial instrument according to Thai Generally Accepted Accounting Principles (Thai GAAPs) Central Pattana Public Company Limited Management’s Discussion and Analysis (MD&A) 6 of 9 New Developments Under its 5-year plan, CPN aims to increase its revenues at a compound annual growth rate (CAGR) of 15% per annum.