Thai Tap Water Supply Public Company...

Thai Tap Water Supply Public Company LimitedThai Tap Water Supply Public Company LimitedThe largest privately owned tap water producer in ThailandThe largest privately owned tap water producer in Thailand

Presentation of the 1Presentation of the 1stst Debenture IssuanceDebenture IssuanceJanuary 2009January 2009

The largest privately owned tap water producer in Thailand - 2

Agenda

3. Tentative Schedule

2. Indicative Key Features of the Debentures

1. Investment Highlights


Why invest in TTW Debenture?

Business Overview

The Largest Private Operator

Assured Stability with Long-term Off-take Agreement

High Growth Potential

Strong Financial Position and Performance

One of a Kind


Business Structure

Prov

inci

al W

ater

wor

ks A

utho

rity

(“PW

A”)

Tha

Tha

Chi

n Ri

ver

Chi

n Ri

ver

Cha

o Ph

raya

Riv

erC

hao

Phra

ya R

iver En

d U

sers

Capacity : 388,000 Capacity : 388,000 cu.mcu.m./day./day

Capacity : 320,000 Capacity : 320,000 cu.mcu.m./day./day

Water ExtractionWater Extraction Water TreatmentWater Treatment

OffOff--take Contracttake Contract

MOQ : 300,000 MOQ : 300,000 cu.mcu.m./day./day

OffOff--take Contracttake Contract

MOQ : 310,000 MOQ : 310,000 cu.mcu.m./day./day

Business Overview


Business Overview

LDN LDN

BTM (1.0-m. dia., 20-km. long)

BTM(1.5-m. dia., 30-km. long) Distribution Station #1

(Buddha Monthon)

(0.40–1.35 m. dia., 112-km. long)

LDN LDN

Distribution Station #2(Mahachai)

TTW’s Production and Distribution Overview

Note :- BTM = Bulk Transmission Main- LDN = Local Distribution Network

Water Treatment Plant (Banglen)

(320,000 cu.m./day max. capacity)


PTW’s Production and Distribution Overview

BTM(1.5-m. dia., 2.35-km. long)





BTM(0.7-m. dia., 0.55-km. long)Thammasat

Distribution Station PathumthaniDistribution Station

RangsitDistribution Station

Note :- BTM = Bulk Transmission Main

Business Overview

Water Treatment Plant

(388,000-cu.m./day max. capacity)


Dominant Position in the Private Tap Water Market

Capacity 708,000 m3/dayCapacity 858,400 m3/dayCapacity 1,195,877 m3/day

Total Private Operators = 817 Large Private Operators with >15,000 cu.m./day

100.0%

71.8%59.3%

2 Large Private Operators with > 100,000 cu.m./day

Note :- Information as of 31 December 2007, adjusted to reflect PTW’s recent increased capacity- Since 1 August 2008, PTW has increased its capacity from 308,000 cu.m./day to 388,000 cu.m./day




388

320

43 37 36 18 16

0

100

200

300

400

500

Relative Production CapacityTh

ousa

nd c

u.m

./day

Note: 1) Bangpakong Waterworks Co., Ltd.

2) Chachoengsao Waterworks Co., Ltd.

3) Industrial Water Resource Management Co., Ltd.

4) R.E.Q. Water Services Co., Ltd.

REQ4IWR3BW1 CW2 Egcomp Tara


Advantageous Water Purchase Agreements

Highest Guaranteed Off-take Volume

Longest Agreement (30 Years vs. Industry Average of 7.9 Years)

More Favorable Water Tariff with Additional Annual Escalation Factor

Punctual Payment from PWA (TTW 15 Days and PTW 10 Days)

Assured Stability


Assured Stability

0

100,000

200,000

300,000

400,000

Jan-0

4Apr-

04Ju

l-04

Oct-04

Jan-0

5Apr-

05Ju

l-05

Oct-05

Jan-0

6Apr-

06Ju

l-06

Oct-06

Jan-0

7Apr-

07Ju

l-07

Oct-07

Jan-0

8Apr-

08Ju

l-08

Oct-08

cu.m

./day

Actual Production MOQ

0

100,000

200,000

300,000

400,000

Jan-0

4Apr-

04Ju

l-04

Oct-04

Jan-0

5Apr-

05Ju

l-05

Oct-05

Jan-0

6Apr-

06Ju

l-06

Oct-06

Jan-0

7Apr-

07Ju

l-07

Oct-07

Jan-0

8Apr-

08Ju

l-08

Oct-08

cu.m

./day

Actual Production MOQ

11.4910.5210.349.908.548.288.138.127.957.807.897.89

23.5522.75

21.4820.2618.6117.44

0

5

10

15

20

25

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

PTW

TTW Water tariff is adjusted annually throughout WPSAs/WPDA with:(THB/m3)

- General CPI

K Factor CPI for Central Region

CAGR = 6.2%

CAGR = 3.5%

Water Tariff

Secured Off-Take Agreement with Favorable Tariff Actual Sale of Treated Water & MOQ - TTW Actual Sale of Treated Water & MOQ - PTW

Bt/cu.m.

CAGR = 26.8%CAGR = 26.8% CAGR = 6.6%CAGR = 6.6%


0

200,000

400,000

600,000

800,000

1,000,000

2008 2009 2010 2011 2012 2013 2014 2015 2016

Existing Areas Future Areas

0

200,000

400,000

600,000

800,000

1,000,000

1,200,000

1,400,000

2005 2006 2007 2008

Samutsakorn Nakornpathom

1,260,978

0

2,000

4,000

6,000

8,000

10,000

2005 2006 2007 2008

Samutsakorn Nakornpathom

Water Consumption by Sector for the Period of 2004-2008

0

10,000,000

20,000,000

30,000,000

40,000,000

50,000,000

60,000,000

70,000,000

2004 2005 2006 2007 2008

Industrial Commercial Household

CAGR 31.02%CAGR 13.32%

CAGR3.68% CAGR 1.62%

Source : PWA, MWA and Department of Water Resources, Ministry of Natural Resources and Environment

Forecast Water Demand

(cu.

m./d

ay)

Increasing PopulationIncreasing Number of Factories

(cu.

m./a

nnum

)

(No.

of f

acto

ry)

(No.

of p

opul

atio

n)

Source : Thai DCI Co., Ltd.

1,284,415 1,323,245

6,906 7,3437,983

Demand Growth in TTW Areas

1,300,9047,697

High growth


High growth

0

100,000

200,000

300,000

400,000

500,000

600,000

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017Residence Industry Business, State Enterprise, and Governmental Agency

2,7782,563

2,1702,372

0

500

1,000

1,500

2,000

2,500

3,000

2005 2006 2007 20080

200,000

400,000

600,000

800,000

1,000,000

2005 2006 2007 2008

0

10,000,000

20,000,000

30,000,000

40,000,000

50,000,000

60,000,000

70,000,000

2004 2005 2006 2007 2008Industrial Commercial Household

CAGR 8.64%

CAGR 5.54%

No.

of f

acto

ry

CAGR 8.58%

No.

of p

opul

atio

n

CAGR 4.48%

Source : PWA, MWA and Department of Water Resources, Ministry of Natural Resources and Environment

Forecast Water Demand Water Consumption by Sector for the Period of 2004-2008

Increasing PopulationIncreasing Number of Factories

Source : ASDECON Corporation Co., Ltd.

815,402 861,338930,040

Demand Growth in PTW Areascu

.m./d

ay

cu.m

./ann

um

896,843


High growth

288,000 308,000 388,000 388,000

320,000 320,000320,000 320,000

120,000

0

250,000

500,000

750,000

1,000,000

2006 2007 2008 Future Expansion

cu.m

./day

Capacity Expansion Project

Current combined capacity is 708,000 cu.m./dayRecently entered into additional WPSA to start selling water by November 2010Future combined capacity will be 828,000 cu.m./day to support increasing demandRequires investment of Baht 1,352 million

608,000 628,000708,000

828,000


Strong Financial

1,3561,698 1,987

1,471 1,720

852

1,0251,173

888900

427

0

1,000

2,000

3,000

4,000

2005 2006 2007 9-mo 2007 9-mo 2008

Bt.m

TTW PTW Discrepency of Tariff Rate PTW

Sale of Treated Water

Continually Increasing Sales

20.3%

25.2%17.0%

14.4%

16.9%

1.4% 2,6202,359


Strong Financial

Cost per Unit

43%55% 50% 50% 53%

45%

18%

27% 25%28%

11%15%

16%28%

7% 13% 17%4% 4% 3%

44%52%

23%25%27%21%

9%

7%

9% 12% 14%

13%7%11%

15%3%

0%

20%

40%

60%

80%

100%

TTW PTW TTW PTW TTW PTW TTW PTW

Depreciation Electricity Chemical Others Land lease

5.9

4.3 4.6

5.86.0

7.7

4.14.0

0

2

4

6

8

2005 2006 2007 9-mo 2009

Cost per unit - TTW Cost per unit - PTW

Bt/unit

Cost Breakdown

2005 2006 2007

5.9

Excluding LCA, TSA Termination

Bt 920m Bt 941m Bt 1,025m

Reducing Cost via Efficiency

9-mo 2008

Bt 865m

Note :- LCA = Local Coordination Agreement- TSA = Technical Service Agreement


Strong Financial

1,28

9 1,75

3

258

1,11

1

969

2,20

9

2,13

51,

038

64%66% 68% 67%

24%

17%

32% 36%

0

500

1,000

1,500

2,000

2,500

2005* 2006** 2007 9-mo 2008

Bt.m

0%

10%

20%

30%

40%

50%

60%

70%

80%

Gross Profit Net ProfitGross Margin (RHS) Net Margin (RHS)

Note :Based on Pro Forma Financial Statements* Excluding LCA&TSA termination** Excluding discrepancy of tariff rate of PTW received in 2006

Improving Gross and Net Profit Margins


Strong Financial

Strong Operating Cash Flows

1,58

8

2,59

1

2,09

7

948

1,92

2

1,52

2

2,52

41,

818

79%78%77%77%

57%56%

48%

53%

0

500

1,000

1,500

2,000

2,500

3,000

2005* 2006** 2007 9-mo 2008

Bt.m

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

EBITDA EBITEBITDA Margin (RHS) EBIT Margin (RHS)

Note :* Excluding LCA&TSA termination** Excluding discrepancy of tariff rate of PTW received in 2006


Strong Financial

2,59

1

2,52

4

1,58

8 2,09

7

542766

773

639

3.4

2.5

3.33.9*

0

500

1,000

1,500

2,000

2,500

3,000

2005** 2006*** 2007 9-mo 2008

Bt.m

0

1

2

3

4

5EBITDA Interest EBITDA/Int. (RHS)

Strong Debt Service Capability

Note :* Calculated from annualized EBITDA** Excluding LCA&TSA termination*** Excluding discrepancy of tariff rate of PTW received in 2006**** Net Debt = O/D + Loans - Cash – ST Investment

Investment Highlights


Strong Financial

9,60

8

8,71

8 12,1

56

7,85

0

2,09

7

1,99

6

1,37

7

904

6.3

10.6

6.1

2.8*

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

2005** 2006*** 2007 9-mo 2008

Bt.m

0

3

6

9

12Net DebtEBITDANet Debt****/EBITDA (RHS)

Low Indebtedness

Note :* Calculated from annualized EBITDA** Excluding LCA&TSA termination*** Excluding discrepancy of tariff rate of PTW received in 2006**** Net Debt = O/D + Loans - Cash – ST Investment



Strong Financial

1.2

3.7

6.7

2.8

0.92.4

4.0

2.2

0

2

4

6

8

2005** 2006*** 2007 9-mo 2008

Bt.m

Debt/Equity Net Debt*/Equity

Conservative Capital Structure

Note :* Net Debt = O/D + Loans - Cash – ST Investment** Excluding LCA&TSA termination*** Excluding discrepancy of tariff rate of PTW received in 2006



One of a Kind

Essential product for daily living

Home delivery service having no brand loyalty

Physically constrained product


Agenda





Indicative Key FeaturesType : Unsubordinated and Unsecured Debentures

with Debenture Holder Representative

Purpose : Refinance existing debt and invest in capacity expansion project

Placement : Public Offering

Total Size : Not exceeding [6,700] million

Indicative Issue Size : 3-Year: THB [] million

5-Year: THB [] million

7-Year: THB [] million

Repayment : Bullet

Interest Rate : Fixed Rate

Interest Payment : Semi-annually

Coupon : Bookbuilding

Credit Rating : [AA-] by TRIS

Listing : ThaiBMA


Agenda





Tentative Schedule

Book Building : [2nd – 3rd week of February 2009]

Allotment & Confirmation : [2nd – 3rd week of February 2009]

Subscription : [3rd – 4th week of February 2009]

Issued Date : [4th week of February 2009]


Question and Answer SessionQuestion and Answer Session


Appendix


Group Structure & Major Shareholders

Group Structure

98.0%

99.9%99.9%

Tap

Wat

er P

rodu

cer

O&M

Pro

vide

rMajor Shareholders

Mitsui

26%

Others

20%

CK

35%

BECL

9%

NVDR

4%HSBC

4%

BBL

2%

Note :- Information as of 20 November 2008- Ch. Karnchang Plc. (“CK”)- Mitsui Water Holdings (Thailand) Co., Ltd.(“Mitsui”)- Bangkok Expressway Plc. (“BECL”)- HSBC (Singapore) Nominees Pte. Ltd. (“HSBC”)- Thai NVDR Co., Ltd. (“NVDR”)- Bangkok Bank Plc. (“BBL”)


Off-take Contract Summary

Contracts and Terms

Service Areas

TTW

Off-taker

Current Capacity

Current MOQ

O&M Provider

Type of Contract

25 years (13 January 2000 to 12 January 2025) from the Ministry of Interior

25 years (11 March 2005 to 10 March 2030) from the Ministry of Natural Resources and Environment

Build-Own-Operate-Transfer (BOOT)Build-Own-Operate (BOO)

388,000 cu.m./day320,000 cu.m./day

Muang and Rangsit Districts in PathumthaniProvince

Nakhon Chaisri, Sampran, and Putthamonthon Districts in NakhonpathomProvinceKratoomban and Muang Districts in Samutsakorn Province

310,000 cu.m./day300,000 cu.m./day

WPDA - 25 years (15 October 1998 to 14 October 2023)WPSA for additional capacity - 17 years (15 September 2006 to 14 October 2023)

WPSA – 30 years (21 July 2004 to 20 July 2034)WPSA for additional capacity - 24 years (2010E to 20 July 2034)

BJT Water, PTW’s subsidiary Water Flow, TTW’s subsidiary

Provincial Waterworks Authority (PWA)Provincial Waterworks Authority (PWA)

PTW

Concession Rights

Note : WPSA = Water Purchase and Sale AgreementWPDA = Water Production and Distribution Agreement


Basis for Pro Forma Statements

Acquisition of WF for 100.00%

• 1 January 2005 with an investment of THB2,166 mm• 89.15% on 29 June 2007 with an investment of

THB3,637 mm

• PTW terminated O&M Agreement with OPCO in 31 December 2004, which caused THB385 mm termination fee, and entered in new O&M with BJT in 1 January 2005

• PTW terminated O&M Agreement with OPCO on 26 January 2007, which caused THB385 mm termination fee, and entered in new O&M with BJT on the same date

• All investments have been realized under “account payable for investments” as if TTW and PTW had not paid for the purchase price until actual transactions occurred

N/A

• 1 January 2005 with an investment of THB305 mm• 26 January 2007 with an investment of THB305 mm

• No BOI privilege and corporate income tax rate of 30% WF and BJT

• No BOI privilege and corporate income tax rate of 30% WF and BJT

• 1 January 2007 with an investment of THB 215 mm (equivalent to intrinsic value after incorporating capital injection/reduction)

• 8.85% on 18 December 2007 with an investment of THB 361 mm

• 1 January 2005 with an investment of THB700 mm• 27 February 2006 with an investment of THB700 mm

Acquisition of PTW for 98.0%

Acquisition of BJT for 100.00% (by PTW)

Termination of O&M Contract with OPCO

Tax rate for operating company

Accrued Account for Investments

Actual Pro Forma


Financial Summary : Consolidated Pro Forma

(1.3%)

(8.7%)

(2.1%)

0.7%

4,1684,1893,8013,897Assets for production - net

78.5%78.0%80.3%71.2%EBITDA Margin

2,0972,53663.2%2,5911,588EBITDA

57.0%55.9%59.6%42.5%EBIT Margin

36.3%31.7%32.3%11.2%Net Profit Margin

317.2%

110.1%

44.8%

(Bt.m)

8,9929,1979,3699,615PP&E – net

2,0941,9581,7571,214Total current assets

9761,0291,043250Net profit

--934934L/T loans from shareholders

9,76610,67310,03110,561L/T loans from financial institutions

18,45218,97918,48018,289Total assets

3,9903,2903,2503,000Issued and fully paid-up shares

4,973

14,006

1,818

3,250

9,90914,56615,905Total liabilities

8,5433,9142,383Total shareholders equity

1,5221,992948EBIT

2,6703,2272,229Total revenue

2005 2006 2007%Change %Change

Remark: Based on Pro Forma financial statements

Note : *Based on reviewed consolidated financial statement

9-mo 2008*


71% 71% 73% 73%

50%53%

56%60%

23%28% 30%

39%

0%

20%

40%

60%

80%

2005** 2006 2007 9-mo 2008

Gross profit* EBIT* Net profit*

250

616

1,029 969

126

427

0

200

400

600

800

1,000

1,200

2005 2006 2007 9-mo 2008

Profitability Analysis (Pro Forma)

LCA, TSA termination

Bt.m Discrepancy of tariff rate of PTW received in 2006

Stable selling and administration expenses consistent with industry practice

Soaring net profits stem from :

Lower loan outstanding as payments set forth quarterly

Lower interest rate from the amendment of credit agreements between PTW and its lenders

146%

Net Profit

54%59% 58% 56%

46%53% 54%

9%

55%

38%19% 35%

0%

20%

40%

60%

80%

2005 2006*** 2007 9-mo 2008

Gross profit EBIT Net profit

•excluding profit sharing from investment in PTW** excluding LCA&TSA termination

*** excluding discrepancy of tariff rate received in 2006

67%


Assets Analysis

19.4% 18.1% 18.2% 15.9%

21.3% 20.6% 22.1% 22.6%

52.6% 50.6% 48.5% 48.7%

6.6% 9.6% 10.3%0.1% 1.1% 0.9%

12.7%0.0%

0%

20%

40%

60%

80%

100%

2005 2006 2007 9-mo 2008

Right to produce & sell of treated water Assets for production-PTWPPE-TTW Current assetsOthers

Bt 18,289m Bt 18,480m

No significant change in total assets: In-line with public utility sector, a large amount of investment at the beginning with minimal capacity

expenditure after commencement

Bt 18,979m Bt 18,452m


Depreciation & Amortization Policy

Unit of production methodUnit of production method

Straight-line methodStraight-line method2H 2007

Unit of production methodUnit of production method

+

The difference of using straight-line vs

unit of production method for PTW is minimal

Actual Right to produce & sell of treated water (net) from acquiring PTW as of 30 September 2008 = Bt 2,933 m

Right to produce & sell of treated water is amortised as an expense annually, using the straight line method, for the remainder of the term under the Water Purchase and Sale Agreement of PTW

Depreciation expense is major component of cost structure (9-mo 2008):• Contribute 33% to total cost and accounted for 13% to total revenue of TTW• Contribute 41% to total cost of and accounted for 19% to total revenue of PTW

Depreciation Policy

Right to produce & sell of treated water

Date post:	24-Sep-2019
Category:	Documents
Upload:	others
View:	2 times
Download:	0 times

Thai Tap Water Supply Public Company...

Documents