Management s Discussion and Analysis on the Company s Operating Results Based on the Financial Statements for the Period between 1 April to 30 June 2005 Compared to the same period of 2004 and for the Period between 1 Jan to 30 June 2005 Compared to the same period of 2004 Overview of the Company and its Subsidiary Result of Operations Unit : Million Baht (Reviewed) Apr-Jun 05 Apr-Jun 04 1) %Change Television Revenues 561 435 29 Radio Revenues 146 111 32 Total Revenues 893 701 27 Total Expenses 491 417 18 Profit before tax 402 284 42 Net Profit 294 213 2) 38 EPS (Baht) 0.43 0.31 2) 38 Unit : Million Baht (Reviewed) Jan-Jun 05 Jan-Jun 04 1) %Change Television Revenues 1,088 841 29 Radio Revenues 251 215 17 Total Revenues 1,706 1,360 25 Total Expenses 968 775 25 Profit before tax 738 585 26 Net Profit 546 439 2) 24 EPS (Baht) 0.79 0.64 2) 24 Notes: 1) MCOT Public Company Limited, formerly known as the Mass Communication Organization of Thailand, was registered as a public company limited on August 17, 2004. The Statements of Income for the period between 1 January to 31 March 2004 (Reviewed) and for the period between 1 April to 30 June 2004, which were during the operations of the Mass Communication Organization of Thailand, were disclosed in the Offering Circular for Ordinary Shares of MCOT Public Company Limited. The effective date of the Offering Circular is 21 October 2004. 2) Net Profit for the period between 1 April to 30 June 2004 was 284 million Baht (no corporate income tax payment since not yet transformation into a public company). In order to compare the net profit for the second quarter of 2004 with that of MCOT as a public limited company for the second quarter of 2005, net profit amounting to 213 million Baht (1 Apr-30 Jun 04) was the net profit after the deduction by 25% corporate income tax. And the same concept applied to the net profit amounting to 585 million Baht for the first half of 2004(1 Jan to 30 Jun 04).The 439 million Baht net profit was the net profit after the deduction of 25% corporate income tax. Despite of the slow down in the economy due to the higher oil price which directly affects to the consumer spending and also impacts to the advertising spending, MCOT s television revenues have continuously grew.The 29% YoY increase for both three-month periods (1 Apr-30 Jun 04) and six-month periods (1 Jan-30 Jun 04) in television revenues was the result of the increasing in the sellable timeslot or the proportion of self-produced to the ratio of 41% from 34% in 2002 and 40% in 2003, so the Company was able to increase its own advertising airtime space and its revenue. In addition, MCOT s advertising rate is relatively low compared to the rate of competitors. Specifically, the advertising revenues which has 64% portion of television revenues and the revenues from special projects which accounts for 20% of television revenues have generated from both government spending and private spending. The special projects are such as, Safety campaign project, Energy saving project, Long Distance call saving project, OTOP, Bangkok Music Festival, Beverage, consumer products and etc. The 32% YoY increase for three-month periods(1 Apr-30 Jun 04) and 17% YoY increase for six-month periods (1 Jan-30 Jun 04) in radio revenues gained from the operation and management of 6 radio stations starting on 1 March 2005, which have returned to MCOT Plc., namely FM 95, 96.5, 97.5, 99, 100.5 and 107 MHz. The radio rating result done by Tapscan Ratings, a research company, shows that FM 95 and FM 97.5 are among the top 3 ranking of the popularity in terms of number of audience, using 6 million people sampling among age 12-44 years, for the past 4 months. The 27% YoY increase for three-month periods(1 Apr-30 Jun 04) and 25% YoY increase for six-month periods (1 Jan-30 Jun 04) in total revenues attributed mainly from the increase in television and radio revenues. In addition, as a result of the increase of revenue sharing under Joint Operations Agreements with Bangkok Entertainment Co., Ltd. from 65.39 millions Baht in 2004 to 110.26 millions Baht in 2005. The Company s total expenses were 18% YoY growth for the three-month periods, and 25% YoY growth for the six-month periods. The increase in television and radio operating expenses due to the increasing in the sellable timeslot were accounted for the increase in the total expenses. As a result of the comparatively higher growth in total revenues while the efficiency to manage incurred cost, the Company reported net profit of 294 millions Baht and EPS equal to 0.43 or 38% YoY growth for the three-month periods. And the net profit for the first half of 2005 was 546 millions Baht and EPS equal to 0.80 or 24% YoY growth.