Central Pattana Plc. Property Development and Investment Corporate Presentation: 3Q12 Performance Review
Central Suratthani
CentralPlaza Suratthani Disclaimer
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Note: All currency figures within this presentation are presented in Thai Baht unless otherwise stated. 2 Agenda
► Company Overview
► Operations
► Future Developments
► Financial Highlights Company Overview 3Q12 Overview
Operations
• CentralPlaza Suratthani was launched on October 11, 2012
an Occupancy Rate of approximately 93%.
• Shopping centers achieved 3Q12 same store effective rental rate +12% yoy (1).
Financials – Overall performance : – 3Q12 Revenues + 42% yoy
– 3Q12 Operating Profit +150% yoy
– 3Q12 Net Profit +220% yoy
– 3Q12 Net Profit (Include non-recurring) +632% yoy
– For a same store basis(1) : – 3Q12 Revenues +11% yoy
– Net D/E stood at 0.88 times.
• Expansion – CentralPlaza Lampang will be launched on November 30 with approximately 90% occupancy rate. – Development of future projects – CentralPlaza Ubonratchathani and CentralFestival Hatyai and CentralFestival Chiangmai is on progress.
Note 1:.Excludes CentralPlaza Udonthani, CentralPlaza Lardprao, CentralPlaza Pitsanulok, and CentralPlaza Grand Rama9. 5 Operational Performance Property Locations
Existing Projects: Thailand Shopping Centers: 19 World Format 1 (BMA) Plaza Format 16 (9 - BMA) (7 - Province) Equity-owned (CPN) Center Format 1 (Province) Festival Format 1 (Province) Pure-managed (CPNRF)
Offices: 7 (BMA) Under construction Hotel: 2 (Province)
Bangkok Metropolitan Area (BMA) Pipeline Projects: Shopping Centers: BMA - Suan Lumpini (Pre-Cadet School) Provinces - Lampang - Ubonratchthani - Hatyai (Songkla) - Chiangmai
Note : As of 30 September 2012. 7 Leasable Area and Occupancy: Bangkok Retail
As of 3Q12, CPN manages 18 premium shopping centers – 10 in Bangkok Metropolitan Area (BMA) and its vicinities and 8 in provincial areas. In 3Q12, occupancy of the BMA shopping centers stood at 97%.
Retail Properties in BMA
Leaseable area(1) (sqm) Occupancy Rate (2) CPN Retail Develop- Land Properties ment Ownership Department Retail Total 3Q12 2Q12 3Q11 Store
1. Lardprao Greenfield Leasehold 48,140 - 48,140 100% 100% 97%
2. Ramindra Greenfield Leasehold 17,156 - 17,156 100% 100% 98%
3. Pinklao (3) Greenfield Leasehold 35,575 - 35,575 100% 100% 99%
4. Rama 3 (3) Greenfield Freehold 18,192 - 18,192 85% 100% 100% Under renovation. 5. Bangna Acquisition Freehold 58,112 - 58,112 91% 96% 95%
6. Rama 2 (3) Greenfield Leasehold 5,937 - 5,937 100% 100% 100%
7. Rattanathibet Acquisition Freehold 59,680 17,558 77,238 100% 98% 98% Underwent a major 18,970 8. CentralWorld Acquisition Leasehold 141,029 187,054 98% 98% 88% renovation during 27,055 May 10 – Nov 11. 9.Chaengwattana Greenfield Freehold 64,458 - 64,458 95% 95% 96%
10.Grand Rama 9 Greenfield Leasehold 59,505 23,432 82,937 99% 99% n/a Opened in Dec11. CPN Portfolio in BMA 507,784 87,015 594,799(4) 97% 98% 94%
Note 1: Excludes rental agreements < 1 year, such as kiosk, carts, ATMs and coin machines. Note 2: Percentage based on leaseable area. 8 Note 3: Excludes areas transferred to CPNRF. Leasable Area and Occupancy: Provincial Retail
8 shopping centers are strategically located in high traffic growth areas in provinces. Occupancy rate in 3Q12 averaged 98%.
Retail Properties in Provincial Areas
Land Leaseable area (1) (sqm) Occupancy Rate (2) CPN Retail Develop- Department Properties ment Ownership Retail Total 3Q12 2Q12 3Q11 Store
1. Pattaya Center Greenfield Leasehold 15,226 - 15,226 97% 97% 93%
2. Chiangmai Acquisition Freehold 45,140 30,751 75,891 99% 98% 99%
3. Pattaya Festival Greenfield Freehold 57,161 - 57,161 96% 96% 97%
4. Udonthani Acquisition Freehold 45,196 23,640 68,836 99% 98% 91% Underwent a major renovation
5. Chonburi Greenfield Freehold 40,386 - 40,386 96% 94% 96% during Jun 11 – Mar 12.
6. Khonkaen Greenfield Freehold 50,146 - 50,146 95% 96% 93%
7. Chiangrai Greenfield Freehold 21,459 - 21,459 98% 98% 98%
8. Phitsanulok Greenfield Freehold 24,974 - 24,974 100% 100% n/a Opened in Oct 11.
CPN Portfolio in Provinces 299,688 54,391 354,079 98% 97% 96%
Total CPN Portfolio for Retail Properties 807,472 141,406 948,878 98% 98% 95%
Note 1: Excludes rental agreements < 1 year, such as kiosk, carts, ATMs and coin machines. Note 2: Percentage based on leaseable area. 9 Note 3: CentralPlaza Suratthani opened in October 2012 with an occupancy rate 93% Leasable Area and Occupancy: Office
Office property is considered as non-core business, complementing shopping center business and adding value to the overall project. As of 3Q12, CPN owned five office towers located in BMA with an average occupancy rate of 96%.
Leaseable Occupancy Rate (2) Develop- Land Office area (1) ment Ownership (sqm) 3Q12 2Q12 3Q11
1. Lardprao Greenfield Leasehold 16,250 96% 99% 22% Completed its major renovation in 1Q11.
2. Bangna Acquisition Freehold 10,007 94% 97% 99%
3. CentralWorld Acquisition Leasehold 82,796 98% 97% 89% Divested to CPNCG in Sep 12.
4. Chaengwattana Greenfield Freehold 19,867 84% 85% 56%
5. Grand Rama 9 Greenfield Leasehold 13,163 95% 94% n/a Opened in Dec 11.
Total 142,082 96% 95% 76%
Note 1: Excludes storage. Note 2: Percentage based on leaseable area. 10 Occupancy: Residential and Hotel
Residential property and hotel are non-core businesses. These businesses complement that of the shopping center and add value to the project.
Residential
Leaseable area (1) Occupancy Rate (2) Residential (sqm) 3Q12 2Q12 3Q11
1. Bangna 1,907 47% 47% 49% Strata title. Asset for sales.
2. Langsuan 4,466 61% 65% 64% 50-unit furnished apartment.
Total 6,373 57% 60% 60%
Hotel
No. of Occupancy Rate % Hotel Available Room 3Q12 2Q12 2Q11
Centara Udonthani 259 56% 53% n.a Closure for refurbishment during Jun 11 – Dec 11. Managed by Central Plaza Hotel Plc.
Hilton Pattaya 302 63% 76% 59% Launched in Dec 10. Managed by Hilton Hotel Corporation
Total 561 60% 66% 59%
Note 1: Includes retail space. Excludes storage. Note 2: Percentage based on leaseable area. 11 Operation Performance: CPNRF
In 3Q12, CPN Retail Growth Leasehold Property Fund (“CPNRF”) owns three shopping centers and two office towers. CPNRF is managed by SCB Asset Management, Fund Manager. Its properties are managed by CPN, Property Manager.
Leaseable Occupancy Rate (2) CPNRF Retail Develop- Land area (1) Properties ment Ownership 3Q12 2Q12 3Q11 (sqm)
1. Rama 2 Greenfield Leasehold 88,945 100% 99% 100%
2. Rama 3 Greenfield Freehold 37,053 99% 100% 96%
3. Pinklao Greenfield Leasehold 21,706 99% 98% 94%
CPNRF Retail Properties 147,704 100% 99% 98%
Leaseable Occupancy Rate (2) CPNRF Office Develop- Land area (1) Properties ment Ownership 3Q12 2Q12 3Q11 (sqm)
Pinklao Tower Greenfield Leasehold 33,760 97% 98% 97% A & B
CPNRF Portfolio 181,464 99% 98% 97%
Note 1: Includes rental agreements < 1 year such as kiosk, carts, ATMs and coin machines and CPN acts as the property manager. Note 2: Percentage based on leaseable area. 12 Rental Contract Type : By Area
Monthly basis collection (up to 3 years) • Tenants: food centers, cineplex and international brands such as “McDonalds”, “KFC” • Range of percentage: 10% - 30% of sales Monthly basis collection (up to 3 years) • With minimum guarantees • Increase rental rate approx 5% p.a. • Approx. 1/3 of rental contract expired every year
Up-front collection (up to 30 years) • Up-front payment – realize throughout lease contract period on straight-line basis
Note: On top of space rental fee, service & utility fees are collected on a monthly basis
Note1: Percentage based on occupied area. Source: Company estimate as of 30 September 2012. 13 Effective Rental Rate (1)
Overall effective rental rate declined in 2009 – 2011 from new malls in Same store rental rate of matured malls provinces. 3Q12 same store rental rate grew 12% y-o-y.
Same Store
Rental + 12% YoY
Excludes , CentralPlaza Lardprao, and malls launched during 2008-2012 (2)
Same store rental rate of new malls (2)
Excludes CentralPlaza All projects Udonthani, CentralPlaza Lardprao, and new malls launched in 2H 2011
Excludes CentralPlaza Udonthani, malls launched in 2H 2011 (3)
Note 1 : The figures are effective rental rates for retail tenants (occupied space < 1,000 sqm) and net of special rental discounts. Note 2 : Malls which have been operating less than 3 - 4 years – CentralPlaza Chaengwattana, CentralFestival Pattaya Beach, CentralPlaza Udonthani, 14 CentralPlaza Chonburi, CentralPlaza Khonkaen, and newly launched malls opened in 2011. Note 3 : CentralPlaza Udonthani, CentralPlaza Phitsanulok, and CentralPlaza Grand Rama 9. Source: Company estimate as of 30 September 2012. Expiration of Long term lease contract (1) Long term lease contract will be expired in each following year from now. At that day, these area will be converted to short term contract at market rental rate which could be increased the company’s revenues.
The expiration area and expiration period are shown below :
Year Retail Anchor Retail + Anchor 2013 11,781 - 11,781 2014 5,497 25,956 31,453 2015 23,464 - 23,464 2016 4,573 - 4,573 2017 4,556 26,270 30,826 2018 4,414 - 4,414 2019 7,150 18,970 26,120 2020 359 27,056 27,415 2021 onward 45,204 24,919 70,123 Total 106,996 123,171 230,167
.Source: Company estimate as of 30 September 2012. 15 Future Developments Secured Future Locations
CentralFestival Chiangmai CentralPlaza Lampang NLA: 46,700 sqm NLA: 16,100 sqm Opening in 4Q 2013 Opening in 30 Nov 2012
CentralPlaza Ubonratchathani NLA: 25,300 sqm Opening in 2Q 2013
CentralFestival Hatyai NLA: 50,100 sqm Opening in 4Q 2013
Note: As of 30 September 2012. 17 CentralPlaza Lampang
Project Highlights
Investment Cost (1) 1,100 MB Program Shopping Center (N.L.A.) 16,100 sqm (2) Parking (G.A) 800 cars Joint- Developer Robinson Department Store (3)
Location 39 rais, Lampang Province North of Thailand Construction Progress 92% of construction (As of Oct 12) Opening 30 Nov 2012
Note1: Includes land and construction cost of shopping center and parking building. Excludes those of department store. Note2: Excludes CRC’s area (Robinson Department Store). 18 Note3: Area will be developed and owned by the joint developer. However the store will be magnet to draw traffic into CPN’s plaza area. CentralPlaza Ubonratchathani
Project Highlights
Investment Cost (1) 1,800 MB Program Shopping Center (N.L.A.) 25,300 sqm (2) Parking (G.A) 1,500 cars Joint- Developer Robinson Department Store (3)
Location 76 rais, Ubonratchathani Province Northeast of Thailand
Construction Progress 42% of construction (As of Oct 12) Opening (tentative) 2Q 2013
Note1: Includes land and construction cost of shopping center and parking building. Excludes those of department store. Note2: Excludes CRC’s area (Robinson Department Store). 19 Note3: Area will be developed and owned by the joint developer. However the store will be magnet to draw traffic into CPN’s plaza area. CentralFestival Chiangmai
Project Highlights
Investment Cost (1) 3,100 MB Program Shopping Center (N.L.A.) 46,700 sqm (2) Parking (G.A) 1,500 cars Joint- Developer Central Department Store (3)
Location 68 rais, Chiangmai Province North of Thailand Development Progress 5% of construction (As of Oct 12) Opening (tentative) 4Q 2013
Note1: Includes land and construction cost of shopping center and parking building. Excludes those of Central Department Store. Note2: Excludes CRC’s area (Central Department Store). 20 Note3: Area will be developed and owned by the joint developer. However the store will be magnet to draw traffic into CPN’s plaza area. CentralFestival Hatyai
Project Highlights
Investment Cost (1) 4,500 MB Program Shopping Center (N.L.A.) 50,100 sqm (2) Multi-purposed Hall 4,800 sqm Parking (G.A) 2,100 cars Joint- Developer Central Department Store (3)
Location 50 rais, Hatyai Province South of Thailand Construction Progress 7% of construction (As of Oct 12)
Opening (Tentative) 4Q 2013
Note1: Includes land and construction cost of shopping center and parking building. Excludes those of Central Department Store. Note2: Excludes CRC’s area (Central Department Store). 21 Note3: Area will be developed and owned by the joint developer. However the store will be magnet to draw traffic into CPN’s plaza area. Future Leaseable Area & Occupancy Rate
Assets under management 2006 2007 2008 2009 2010 2011 2012F 2013F 2014F 2015F
No.of project 10 10 11 15 15 18 20 23 27 30
Retail space (NLA in sqm) 684,587 697,038 761,111 967,430 964,612 1,085,774 1,142,350 1,264,450 1,419,450 1,537,450
Office space (NLA in sqm) 145,700 144,791 144,791 164,253 163,991 175,831 175,831 175,831 175,831 175,831
Hotel (rooms) 255 557 561 561 561 561 561
Residential (units) 62 62 62 62 62 62 62 62 62 62
Source: Company estimate as at 30 September 2012. Includes leaseable area of CentralPlaza Rama 2, CentralPlaza Rama 3, and CentralPlaza Pinklao which were partially transferred to CPNRF, but still 22 under CPN’s management. Capital Expenditure
Major capital expenditure will be used to develop new projects. Financing plan for future expansion includes: cash flow from operation, bond issuance and/or project finance, and property fund vehicle.
(Unit: MB)
Source: Company estimate as of 30 September 2012. Note 1: Tentative development projects. 23 3Q12 Financial Performance Financial Summary 6-mth closure of CentralPlaza Lardprao
(Bt.mil) 6-mth closure of CentralWorld 15,000 13,089 12,766 12,500 11,755 11,388
10,000 9,271 8,282
7,500
5,079 5,000 4,499 4,432 4,495
2,991 3,112 3,158 2,843 2,404 2,442 2,620 2,500 1,541 1,550 619 1,171 1,569 2,158 2,292 1,552 1,871 3,478 389 1,242 0 2007 2008 2009 2010 2011 9M12 3Q11 2Q12 3Q12
/1 Total revenues Operating profit Net profit Net profit inc. non-recurring
Excludes non-recurring items. Note1: Total Revenue includes rental & service, hotel operation, food & beverage, and other incomes. 25 Excludes interest income and share of profit from investment. . Revenues Breakdown Retail & office +44% YoY, mainly from: • Strong increases in rental rates and decrease of discount at most of retail properties. 16,000 (Bt.mil) +42% YoY 13,100 +1% QoQ • Contributions from new projects – 12,000 CentralPlaza Phitsanulok, CentralPlaza 9,216 Grand Rama 9 – launched in 2011. 8,000 4,437 4,495 • The completion of CentralPlaza Udonthani 3,158 4,000 expansion and renovation in March 2012 0 • The re-launch of CentralPlaza Lardprao in 9M11 9M12 3Q11 2Q12 3Q12 August 2011. Other income Hotel F&B Office Retail • Continuous improvement of CentralWorld. Hotel revenues +70% YoY, due to re-launch 3Q12 Revenue breakdown of Centara Hotel & Convention Center Udonthani and continuous improvement of Retail Hilton Pattaya Hotel. Office Office 5% F&B sales +14% YoY from F&B F&B 4% • Higher sales at CentralFestival Pattaya Retail Hotel 82% Hotel Other income Beach. 4%
Other income • Contributions from the new food centers at 5% the CentralPlaza Udonthani and CentralPlaza Phitsanulok.
Excludes non-recurring income. Note1: Includes revenues from residential projects and water & amusement park, and property management fees from CPNRF. 26 Costs Breakdown
Cost of retail & office +19% YoY from: • Costs of the newly launched projects. (Bt.mil) • Higher amortizations of CentralPlaza 10,000 Lardprao after renovation. 6,855 +25% YoY 8,000 • Depreciations of the newly launched 5,718 +3% QoQ 6,000 projects.
4,000 2,370 1,893 2,300 2,000 Cost of hotel business +61% YoY from the increased income from hotel operations. 0 9M11 9M12 3Q11 2Q12 3Q12
Others Hotel F&B Office Retail F&B costs +12% YoY from 3Q12 Cost breakdown • Higher F&B sales. The change in costs was in-line with that of F&B sales.
Office • Costs of the new food centers at the 6% F&B CentralPlaza Udonthani and CentralPlaza 6% Phitsanulok. Hotel Retail 3% 85% Others 0%
Note1: Excludes non-recurring items. 27 SG&A Expenses Breakdown
(Bt.mil) Personnel expenses +14% YoY from: 3,000 +6% YoY • Increased number of employees to support 2,500 1,782 -2% QoQ business expansion and increased 1,632 2,000 minimum based salary. 1,500
1,000 608 Advertising & promotion -10% YoY, due to 553 593 500 the effective cost management thru top-line
0 driven basis 9M11 9M12 3Q11 2Q12 3Q12 Others Depreciation Advertising & promotion Personnel
3Q12 SG&A breakdown
Advertising & promotion 15% Personnel 50%
Depreciation 16%
Others 19%
Note1: Excludes non-recurring items. 28 Debt Analysis
Outstanding Borrowings 26,492mil (THAI BAHT) Fixed vs. Floating Interest Rate Mix
Floating 17% Long-term loan 47%
Short-term bond 12%
Long-term bond Short-term loan 32% 9% Fixed 83% Financing Cost
(Bt.mil)
5.5% 1,400 5.2% 6% 4.7% 1,200 4.4% 4.4% 4.3% 4.2% 4.4% 5% 1,000 874 4% 745 800 688 581 543 3% 600 2% 400 336 235 254 200 1% 0 0% 2007 2008 2009 2010 2011 3Q11 2Q12 3Q12 /1 Interest expenses Weighted average cost of debt (RHS)
Note 1 : Weighted average interest rate was derived from interest expenses including interest capitalization for projects under development. 29 Capital Structure
CPN’s net D/E stood at 1 times, against its debt covenant of 1.75 times.
30 Share Price Performance and Dividend (Baht/share)
Share overview Dividend policy is 40% of normal net profit.
Par Value (Bt) 1.00 2011 2010 2009 2008 2007 Stock Price (Bt) 60.00 Par Value (Bt) 1.00 1.00 1.00 1.00 1.00 FY12 core EPS (Bt/share) /1 1.96 Dividend (Bt/share) 0.37 0.25 0.58 0.33 0.33 P/E (Times)/1 35.1 Dividend Paid (Bt mil) 806 545 1,264 719 719 EV/EBITDA (Times)/1 21.4 Dividend Payout Ratio 39% 48% 25%/1 33% 40% Market Capitalization (Bt bn.) 130.7 Remarks: Dividend policy is paid annually not less than 40% of net profit (unless there is a Share Capital (mil.shares) 2,178.8 compelling reason against this). Note 1: Dividend payout ratio of 25% in 2009 was derived from 40% of normal net profit and 14% of gain from transferring assets into CPNRF.
Source: Factset as of 30 September 2012. Note 1: Bloomberg’s consensus as of 7 November 2012. 31 Appendix Balance Sheet
33 Income Statement
3Q11 2Q12 3Q12 % YoY % QoQ Consolidated earnings (MB) Change Change Revenues from rental and service 2,710 3,792 3,915 44% 3% Retail 2,511 3,549 3,666 46% 3% Office 195 238 245 26% 3% Other supportive businesses 5 5 4 (16%) (16%) Hotel operations 100 163 170 70% 4% Food & beverage sales 150 180 170 14% (5%) Other income 198 298 239 21% (20%) Total revenues 3,158 4,432 4,495 42% 1% Costs of rental and service 1,817 2,085 2,157 19% 3% Retail 1,676 1,930 2,003 19% 4% Office 137 150 150 9% (0%) Other supportive businesses 5 5 5 (2%) (2%) Hotel operations 43 64 69 61% 8% Food & beverage sales 128 151 144 12% (5%) Total costs 1,988 2,301 2,370 19% 3% Operating profit 619 1,541 1,550 150% 1% Net profit 389 1,171 2,843 632% 143% Net profit excluding non-recurring items 389 1,171 1,242 220% 6% EPS (Bt) excluding non-recurring items 0.18 0.54 0.57 217% 6% EPS (Bt) including non-recurring items 1.31
34