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BTSGIF Presentation Valuation for 4Q 19/20 (ended 31 Mar 2020)

20 May 2020 (updated version)

BTSGIF Valuation for 4Q 19/20 (ended 31 Mar 2020)

Loss on Valuation of Investments and its Impact

Loss on Valuation of Investments and Impact

2

Reappraisal (as significant change)

Loss on valuation of investment in NRTA

Deficient earnings (as of Mar 20)

The Fund has excess cash, yet, unable to pay a dividend from 4Q 19/20 performances

But being paid as CAPITAL RETURN

• As per SEC, reappraisal of the Fund’s investment1 must be done every 3 years or when having any significant change. • During 4Q 19/20, “Coronavirus (COVID-19) outbreak” impacted significantly to the “Net Farebox Revenue”, causing

the Fund’s reappraisal. • In 4Q 19/20, there was a loss on valuation of investment of THB 5.9bn (non-cash expense)

IMPACT FROM THE COVID-19 OUTBREAK

Capital Return 1Q-4Q (THB 0.361+ 4Q)

Dividend 2Q & 3Q (THB 0.284)

Total FY19/20 Distribution (THB 0.645 + 4Q)

1 under normal circumstances, the Fund intends to reappraise its assets every 2 years.


Appraisal Value Assumptions

Historical Key Factors in Changes in Valuation Reports

3

KEY FACTOR PREVIOUS REPORT (AS OF MAR 16)

PREVIOUS REPORT (AS OF MAR 19)

CURRENT REPORT (AS OF MAR 20)

1. COVID-19 • No COVID-19 • No COVID-19 • Impact from COVID-19

2. Lower economic growth rate • 4.0% in 2019 - 2026 • 4.0% in 2027 onwards

• 4.0% for 2019-2021 • 3.5% for 2022-2026 • 3.0% from 2027 onwards

• 2.4% for 2019 (2.0)% for 2020 4.5% for 2021

• 3.5% for 2022-2026 • 3.0% from 2027 onwards

3. Lower inflation rate 3% 2.5% 2.25%

4. Integrated fare structure of MRTA lines (one-time boarding fee)

No fare integration (boarding fee in each MRT line)

Fare integration; Blue, Purple, Orange (one-time boarding fee)

Fare integration; Blue, Purple, Orange (one-time boarding fee) (unchanged from Mar 19)

5. Delay in the implementation of dual track & the impact of closure of Saphan Taksin station

Expected dual track implementation in 2021

Closure 2 years and expected dual track implementation in 2022


6. Moving the van terminal at Victory Monument

Having van terminal at Victory Monument

Moving van terminal at Victory Monument

Moving van terminal at Victory Monument (unchanged from Mar 19)

7. Delay of the opening of Green Line Extension

• Bang Wa - Taling Chan in 2019 • National Stadium - Yodsay

in 2021

• Bang Wa - Taling Chan in 2022

• No National Stadium - Yodsay

• Bang Wa - Taling Chan in 2024

• No National Stadium - Yodsay

8. Delay of Suksa Wittaya station 2017 2020 2021

Valuation decrease - 4Q 18/19 = THB 5.3bn 4Q 19/20 = THB 5.9bn



Key Factors to a Decrease in Valuation

4

KEY FACTOR PREVIOUS REPORT MAR 19 (as of DEC 19)

CURRENT REPORT (MAR 20)

CHANGE

1. COVID-19 Impact for FY20/21

• No COVID-19 • Impact from COVID-19 THB (3.1)bn (or 50% of total decrease)

2. Shortened concession period per quarter

THB (200)mn THB (300)mn THB (100)mn

3. Lower economic growth rate GDP Impact on ridership growth (CAGR from FY18/19A – FY29/30)

• 4.0% for 2019-2021 • 3.5% for 2022-2026 • 3.0% from 2027 onwards Ridership CAGR = 3.9%

• 2.4%, (2.0)% and 4.5% for 2019-2021 respectively

• 3.5% for 2022-2026 • 3.0% from 2027 onwards Ridership CAGR = 3.5%

• (1.6)% for 2019 • (6.0)% for 2020 • +0.5% for 2021

Decrease 0.4% p.a. or 3.6% for 9 years left

4. Lower inflation rate p.a. (CPI) Impact on average fare (CAGR from FY18/19A – FY29/30)

2.5% Fare CAGR = 3.1%

2.25% Fare CAGR = 2.5%

(0.25)% Decrease 0.6% p.a. Or 5.4% for 9 years left

5. Delay in the implementation of dual track and the impact of closure of Saphan Taksin station



Delay 1 year (ridership drop ~2% in one year)

6. Delay of the opening of Green Line Bang Wa - Taling Chan

2022 2024 Delay 2 years

Valuation decrease 3Q 19/20 = THB (0.2)bn 4Q 19/20 = THB (5.9)bn THB (5.7)bn

Fact

ors

#3

to

#6

, to

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ase

of

THB

2.5

bn

(

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ow

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y TH

B 1

.7b

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y TH

B 0

.8b

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Fact

ors

#1

, 2

TH

B 3

.2b

n

Expenses, 15% THB 0.8bn

Shortened concession,

5% or THB 0.3bn

Revenue, 50% THB 3.1bn

Revenue, 30% THB 1.7bn



Key Factors to a Decrease in Valuation

5

From the impact of the COVID-19 outbreak Valuation decrease of THB 3.1bn or 50% of THB 5.9bn Note: Impacted to FY20/21 farebox revenue)

From the impact of changes in forecasted GDP and Inflation in FY 21/22 to FY 29/30 • GDP impact on ridership: A decrease of 0.4% p.a. or 3.6% for 9 years left of total ridership • Inflation impact on fare: A decrease of 0.6% p.a. or 5.4% for 9 years left Resulting to a decrease in net farebox revenue of 1.0% p.a. or 9% for 9 years left of total net FB rev.

Valuation at Mar 2020 was THB 52.4bn, decreasing from THB 58.3bn as of 31 Dec 2019. A decrease of THB 5.9bn from

1. A decrease in revenue : THB 4.8bn (80%)

2. An increase in expense: THB 0.8bn (15%)

3. Shortened concession period impact: THB 0.3bn (5%)

Components of a change in valuation of THB 5.9bn

From shortened concession period Valuation decrease of THB 0.3bn or 5% of THB 5.9bn

Dividend Payment: Payout of not less than 90% of adjusted net profit1 p.a. and retained earnings (quarterly payment), and prohibit to pay dividend if the fund had retained deficit. Capital Return: The Fund has excess liquidity (cash from loss on valuation of investment (non-cash expense)) and reduce its

registered capital


Distribution Impact

Distribution Outlook

6

THB PER UNIT 9M

19/20 4Q

19/20E FY

20/21E 1Q

21/22E 2Q

21/22E 3Q

21/22E

DIVIDEND 0.284

- - - -

CAPITAL RETURN 0.361

TOTAL DISTRIBUTION

0.645

1 Adjusted net profit = BTSGIF net profit less unrealised gain from the appraisal of assets and other adjustment items to be in line with the cash-basis of BTSGIF

DISTRIBUTION

7 BTSGIF Valuation for 4Q 19/20 (ended 31 Mar 2020)

Distribution Summary

Historical Distribution

FY Period No. Dividend Payment (THB per unit)

No.

Capital Return (THB per unit)

Total (THB per unit)

13/14 17 Apr 2013 – 31 Mar 2014 1-4 0.579 - - 0.579

14/15 1 Apr 2014 – 31 Mar 2015 5-8 0.606 1-2* 0.125 0.731

15/16 1 Apr 2015 – 31 Mar 2016 9-12 0.692 3 0.064 0.756

16/17 1 Apr 2016 – 31 Mar 2017 13-16 0.772 - - 0.772

17/18 1 Apr 2017 – 31 Mar 2018 17-20 0.798 - - 0.798

18/19 1 Apr 2018 – 31 Mar 2019 21-23 0.611 4 0.169 0.780

1Q 19/20 1 Apr 2019 – 30 Jun 2019 - - 5 0.204 0.204

2Q 19/20 1 Jul 2019 – 30 Sep 2019 24 0.103 6 0.123 0.226

3Q 19/20 1 Oct 2019 – 31 Dec 2019 25 0.181 7 0.034 0.215

Total 17 Apr 2013 – 31 Dec 2019 1-25 4.342 1-7 0.719 5.061

* Payout from FY13/14 – 14/15 performances

0.000 0.125 0.064 0.000 0.000 0.169 0.204 0.123 0.034

0.579

0.606 0.692 0.772 0.798 0.611

0.103 0.181

0.579

0.731 0.756 0.772 0.798 0.780

0.204 0.226 0.215

FY 13/14 FY 14/15 FY 15/16 FY 16/17 FY 17/18 FY 18/19 1Q 19/20 2Q 19/20 3Q 19/20

Capital Return Dividend

1 Adjusted net profit = BTSGIF net profit less unrealised gain from the appraisal of assets and other adjustment items to be in line with the cash-basis of BTSGIF

8 BTSGIF Valuation for 4Q 19/20 (ended 31 Mar 2020)


Dividend Payment: Payout of not less than 90% of adjusted net profit1 p.a. and retained earnings (quarterly payment) Capital Return: The Fund has excess liquidity (cash from amortisation of fund issuance costs and loss on valuation of investment (non-cash expense)) and reduce its registered capital

DISTRIBUTION

Distribution to unitholders (THB 0.780/unit in FY18/19, and THB 0.798/unit in FY17/18)


Unit : THB/unit

* Payout from FY13/14 – 14/15 performances

*

9

Appendix


Appendix

11

2.2

10

BTSGIF Appendix: Forecasted Ridership until FY 29/30

Projected ridership

CAGR Ridership

(FY 18/19A – FY 29/30)

3.5%

CAGR Fare

(FY 18/19A – FY 29/30)

2.5%

CAGR FB Revenue

(FY 18/19A – FY 29/30)

6.0%

CAGR Net FB Revenue

(FY 18/19A – FY 29/30)

7.7%

Note: These projections were derived from valuation report by C.I.T. Appraisal Co., Ltd. (CIT) which the forecast and assumptions were based on Systra MVA (Thailand), except for FY 20/21F was based on BTSC. FY 13/14A, ridership was for the full year of FY 13/14. FY29/30F (1 Apr 29 – 4 Dec 29), ridership growth was prorated to the full year.

Actual ridership


Forecast of Ridership until FY 29/30

21

4.7

21

8.7

23

2.5

23

8.0

24

1.2

24

1.0

16

9.9

26

4.4

27

2.9

29

2.0

29

9.9

31

2.8

31

4.2

33

1.0

34

1.3

23

7.9

1.9% 6.3% 2.4% 1.3% -0.1%

-28.3%

55.6%

3.2% 7.0% 2.7% 4.3% 0.4% 5.3% 3.1% 2.6%

Forecasted ridership Ridership growth (%YoY)

4,2

50

Actual farebox revenue

11

BTSGIF Appendix: Forecast of Farebox Revenue until FY 29/30

Projected farebox revenue derived from valuation report

Note: These projections were derived from valuation report by C.I.T. Appraisal Co., Ltd. (CIT) which the forecast and assumptions were based on Systra MVA (Thailand), except for FY 20/21F was based on BTSC. FY 13/14A, farebox revenue was for the full year of FY 13/14. FY29/30F (1 Apr 29 – 4 Dec 29), farebox revenue growth was prorated to the full year.


Forecast of Farebox Revenue until FY 29/30

5,6

77

5,8

74

6,3

97

6,6

36

6,8

21

6,9

62

4,9

45

8,1

31

8,7

61

9,4

52

10

,20

4

10

,77

9

11

,31

7

11

,87

9

12

,82

3

9,0

08

3.5% 8.9% 3.7% 2.8% 2.1%

-27.4%

64.4%

7.8% 7.9% 7.9% 5.6% 5.0% 5.0% 7.9% 3.4%

Forecasted farebox revenue Farebox revenue growth (%YoY)

3,3

53

12

BTSGIF Appendix: Projected Net Cashflow until FY 29/30

Actual net cashflow

Note: Net cashflow has deducted additional investment costs for the construction and improvement of S4 and S6 stations. These projections were derived from valuation report by C.I.T. Appraisal Co., Ltd. (CIT) which the forecast and assumptions were based on Systra MVA (Thailand) and Infra Asia (Thailand) Ltd, except for FY 20/21F was based on BTSC. FY29/30F (1 Apr 29 – 4 Dec 29), net Cashflow growth was prorated to the full year.


Forecast of Net Farebox Revenue until FY 29/30

Projected net cashflow derived from valuation report

3,7

74

3,9

57

4,4

75

4,5

43

4,6

96

4,6

03

2,7

19

5,5

77

6,0

57

6,8

77

7,5

81

8,0

79

8,6

20

9,2

01

10

,08

5

7,1

06

4.9% 13.1% 1.5% 3.4% -2.0%

-42.9%

105.1%

8.6% 13.5% 10.2% 6.6% 6.7% 6.7% 9.6% 3.7%

Forecasted net cashflow Net cashflow growth (%YoY)

13

BTSGIF Appendix: Costs and additional investment projection

Key costs guidance

Costs and Additional Investment Projection

Sources: Estimated based on valuation report from C.I.T. Appraisal Co., Ltd. (CIT) which the forecast and assumptions were based on Infra Asia (Thailand) Ltd.’s report and updated CAPEX and additional investment from BTSC. Except for FY 20/21 was based on BTSC.

Unit: THB mn

*Maintenance expenses mainly composed of Siemens lump-sum contracts for current and new coming 3 trains, expected THB 443mn p.a. (avg on a smooth basis) and the non-Siemens lump-sum contract (in-house P&C maintenance).

Source: Estimated base on Infra Asia forecast and updated CAPEX and additional investment from BTSC. Except FY 20/21 total costs were based on BTSC.

Normalised guidance p.a. (THB mn) from FY 20/21 to FY 28/29 (9 years)

% of total

OPEX 2,360 90%

Maintenance expenses* 839 32% Staff cost 742 28% Utilities expense 514 20% Others 265 10%

CAPEX 178 7%

Others 177 7%

Rolling stocks 1 0%

Additional Investment 72 3%

Total costs and additional investment 2,610 100%


Costs and Additional Investment Projection

33 282 130 210 30 - - - - - - - - - 251 150

251 150 84 - 75 207 220

83 171 207 220 83

171 424 130 185 169 162 164 162 209 225 196 119

1,6

20

1,7

10

1,7

02

1,7

27

1,8

04

1,7

10

1,7

02

1,7

27

1,8

04

1,8

51

1,8

13

2,2

38

2,3

25

2,3

83

2,4

59

2,5

39

2,4

88

2,4

54

2,5

42

1,7

82

1,696 1,917 1,922 2,093 2,125

1,917 1,922 2,093 2,125

2,359 2,056

2,226 2,553

2,704 2,576 2,623 2,701 2,697 2,678 2,738

1,901

OPEX CAPEX (others) CAPEX (rolling stocks) Additional Investment

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