THAI Announces 2nd Quarter Results 2012

Thai Airways International Public Company Limited (THAI) announced the Company’s consolidated financial statements and that of its subsidiaries for the three-month period and six-month period ending June 30, 2012 which has been reviewed by the Office of the Auditor General of Thailand and also Management’s Discussion and Analysis (MD&A) for the second quarter of the financial year 2012 ending June 30, 2012.

Mr. Chokchai Panyayong , Executive Vice President of Strategy & Business Development and Acting for President, said that the Company’s consolidated financial statements for the second quarter of 2012 and six-months ending June 30, 2012, when compared to the same period last year, includes two additional subsidiaries which are Thai Flight Training Co., Ltd., a business to provide aviation personnel training services, and Nok Airlines Co., Ltd. (Nok Air) with THAI holding a 49 percent share.

In the second quarter of 2012, THAI and its subsidiaries had lower operating result than the first quarter. The operating result of this quarter showed loss before foreign currency exchange and income tax, at the amount of THB 2,727 million,compared to the previous quarter; indicated THB 3,341 million gain before foreign currency exchange and income tax. Revenues decreased by THB 5,999 million or 11.0%.The primary result came from the promotion campaign designed specifically for low season period when passenger’s demands are diminished, which caused lower revenue than the first quarter. Also,the remaining amount of the special fare tickets issued in late 2011 to stimulate more passenger traffic after the massive flood had been valid until June 2012 were utilized during this quarter.There were various expenses paid during this quarter which consisted of retrospective annual salary increment, which had been pending for adjustment since January 2012, retrospective license allowance for pilots, which had been pending for adjustment since June 2011.

When compared to the same period last year, THAI’s cabin factor indicated an excellent cabin factor result for the low season period.Unfortunately, THAI was still subjected to unfavorable world economic situation, intensified competition,which is the constraint for THAI facing difficulty to increase the selling price. Simultaneously, fuel prices were still high although THAI’s fuel hedging strategy indicated satisfactory outcome.THAI has constantly implemented its cost reduction program which could reduce expenses, but repairs to the runway of Suvarnabhumi Airport in June 2012 caused flight delays and increased expenses.Finally,the results of operations could not turn positive, which was the same as during other low season periods in previous years. However, the operating profit (loss) margin for the second quarter over the past five years indicated the improvement trend due to the decreasing loss.

In the second quarter of 2012, THAI’s consolidated total revenues amounted to THB 48,506 million, which was an increase of THB 2,947 million or 6.5 % from last year.THAI’s consolidated t otal expenses, excluding gain (loss) on foreign currency exchange amounted to THB 51,233 million, which was THB 285 million or 0.6% lower than last year. The major factor causing the decrease was the lower employee benefit expenses and lease of aircraft and spare parts. However, THAI and its subsidiaries also recorded gain on foreign currency exchange in the amount of THB 1,316 million compared to last year where THAI lost THB 2,265 million. Consequently, THAI and its subsidiaries reported a loss before foreign currency exchange and income tax of THB 2,727 million which indicated better performance when compared to last year where loss was reported at THB 5,959 million .

In the second quarter of 2012, THAI’s consolidated loss totaled THB 1,458 million.Loss attributed to owners of the parent (net loss) was THB 1,526 million or THB 0.70 per share. The net loss decreased when compared to last year’s THB 7,874 million or THB 3.61 per share loss. EBITDAR was THB 4,439 million, which increased by THB 2,944 million or 196.9 % from last year .

Operating results of THAI and its subsidiaries for the first six months of 2012 (January–June 2012) indicated profit for the period at a total of THB 2,210 million.Profit attributed to owners of the parent amounted to THB 2,118 million or THB 0.97 per share compared to last year’s loss of THB 7,256 million or THB 3.32 per share. Other comprehensive income of THAI and its subsidiaries was THB 54 million which generated the comprehensive income, THB 2,264 million. Finally, total comprehensive income for the period attributed to owners of the parent amounted to THB 2,172 million .

As of June 30, 2012,THAI’s consolidated total assets were THB 277,375 million, an increase of THB 2,930 million from December 31,2011. Total liabilities totaled THB 211,381 million, which was an increase of THB 371 million. Total shareholders’ equity amounted to THB 65,994 million, which was an increase of THB 2,558 million.

Based on previous news regarding the company’s target to earn profit before foreign currency exchange and income tax in 2012 at THB 6,000 million, the company announces that based on the six-month financial results, financial results for the entire fiscal year might not reach that target.