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    THAI Reports Operational Performance Results for the Second Quarter of 2024 with Targets to Finalize its Capital Restructuring under the Business Rehabilitation Plan within the End of 2024 and Obtain the Cancellation of the Business Rehabilitation within the Second Quarter of 2025

    9 August 2024

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    THAI Reports Operational Performance Results for the Second Quarter of 2024 with Targets to Finalize its Capital Restructuring under the Business Rehabilitation Plan within the End of 2024 and Obtain the Cancellation of the Business Rehabilitation within the Second Quarter of 2025
     
    Thai Airways International Public Company Limited (THAI) reinforces its sustainable strength and capability with the operational performance for the second quarter of 2024 as well as elevates corporate governance and management in preparation for the capital restructuring within the end of 2024.  The capital restructuring consists of (1.1) debt-to-equity mandatory conversion (1.2) the debt-to-equity conversion right and (2) offering of newly issued shares to its pre-capital restructuring shareholders, THAI’s employees and selected investors by way of private placement, sequentially.  The Company targets to file a petition to the Central Bankruptcy Court for the cancellation of the business rehabilitation and THAI’s shares are expected to resume trading on the Stock Exchange of Thailand within the second quarter of 2025.
     
    In the second quarter of 2024, THAI and its subsidiaries reported the total revenue, excluding one-time transactions, at 43,981 million baht, 17.7% higher than the same period last year which was 37,381 million baht but 4.3% lower than Q1/2024 owing to the typical lowest travel demand during Q2 of the year.  THAI resumed flights to Milan and Oslo to serve intercontinental passengers between Europe and Asia-Pacific.  Moreover, THAI partnered with Kuwait Airways to provide codeshare services in the Middle East, North Africa and Europe.  In Q2/2024, THAI served 3.81 million passengers.  An average cabin factor was 73.2%.
     
    THAI and its subsidiaries reported the total expenses, excluding one-time transactions, at 38,056 million baht, 32.1% higher than the previous year mainly due to an increase in variable costs. THAI and its subsidiaries reported the operating profit, before financial costs and excluding one-time transactions, at 5,925 million baht, comparing to 8,576 million baht profit in Q2/2023. THAI and its subsidiaries’ financial costs, according to Financial Reporting Standard No. 9 (TFRS 9), was 4,796 million baht. THAI and its subsidiaries had one-time items mainly due to loss from foreign exchange and asset impairment resulting total expense of 809 million baht. Consequently, THAI and its subsidiaries reported a net profit of 314 million baht while in the same period last year, it was reported a net profit of 2,273 million baht. Earnings before interest, tax, depreciation and amortization (EBITDA) after cash paid for aircraft lease payment amounted to 4,401 million baht.
     
    In the first six months of 2024, THAI and its subsidiaries reported the total revenue, excluding one-time transactions, at 89,936 million baht, 14.0% higher than the same period last year, while the total expenses, excluding one-time transactions, at 72,935 million baht, 27.3% higher than the previous year. THAI and its subsidiaries reported the operating profit, before financial costs and excluding one-time transactions, at 17,001 million baht, 21.3% decrease from the same period in 2023. THAI and its subsidiaries’ financial costs, according to Financial Reporting Standard No. 9 (TFRS 9), was 9,403 million baht. THAI and its subsidiaries had one-time items mainly due to loss from foreign exchange and asset impairment resulting total expense of 4,847 million baht. Consequently, THAI and its subsidiaries reported a net profit of 2,738 million baht while in the same period last year, it was reported a net profit of 14,795 million baht. Earnings before interest, tax, depreciation and amortization (EBITDA) after cash paid for aircraft lease payment amounted to 18,402 million baht, higher than the set budget while the net profit is slightly lower than budget due to loss from foreign exchange rate.
     
    As of 30 June 2024, THAI and its subsidiaries have a total of 77 active aircraft. In the first six months of 2024, the average aircraft utilization was 13.0 hours per day. Traffic production (ASK) increased by 15.6% while passenger traffic (RPK) increased by 10.9%.  The average cabin factor was 78.1%, lower than the previous year's 81.4%. The total number of passengers carried was 7.68 million, increased by 0.81 million from the same period last year, or 11.8%.
     
    Total assets of THAI and its subsidiaries were 270,526 million baht, an increase of 31,535 million baht from 31 December 2023. Total liabilities were 310,956 million baht, an increase of 28,823 million baht from 31 December 2023. The shareholders' equity of THAI and its subsidiaries amounted to -40,430 million baht, a negative decrease from 31 December 2023, by 2,712 million baht. As of 30 June 2024, cash, cash equivalent and other current financial assets totalled 81,748 million baht, which is 14,618 million baht higher than that on 31 December 2023.
     
    During the first six months of 2024, THAI has paid 4,644 million baht of the total debt in 2024 which is 13,022 million baht.
     
    In congruent with the business rehabilitation plan, THAI is preparing a registration statement for sale of securities and draft prospectus in preparation for its capital restructuring process which includes (1.1) debt-to-equity mandatory conversion: in proportion of 100 percent of debt for Group 4, Creditor, which includes creditor who is THAI’s major shareholder who is not financial institution namely the Ministry of Finance; in proportion of 24.50 percent of debt for Group 5 Creditor (financial institution creditors assigned to receive residual proceeds from the disposal of aircraft, under the assignment agreements), Group 6, Creditor (unsecured financial institution creditors) and Creditors in Group 18-31 (bondholder creditors), (1.2) the debt-to-equity conversion right (in addition to such 24.50 percent mandatory conversion offered to Creditors in Group 4, 5, 6 and 18-31, and (2) Offering of newly issued shares to its pre-capital restructuring shareholders, THAI’s employees and selected investors by way of private placement, sequentially.  The Company expects that the submission of the registration statement for sale of securities and the draft prospectus for capital restructuring to the Securities and Exchange Commission, Thailand (SEC) and the Stock Exchange of Thailand (SET) will take place within September 2024.  Subsequently, the exercise of debt-to-equity conversion right as well as a notification of the intent to exercise such conversion right are expected to occur within November 2024, and for the offering of newly issued shares, the offering and subscription period for THAI’s pre-capital restructuring shareholders, THAI’s employees and selected investors are expected to take place within December 2024, subject to the preparation of relevant documents by the Company and advisors as well as the review process for the filing to become effective by the SEC.  THAI expects to complete the capital restructuring by the end of 2024 in accordance with its business rehabilitation plan with targets to have its shareholders’ equity in the Company 2024 fiscal report to be positive, which is one of the key conditions to the fulfillment of the business rehabilitation.  THAI expects to file a petition to the Central Bankruptcy Court for the cancellation of the business rehabilitation and expects its shares to resume trading on the SET in the second quarter of 2025.  The definite timeframe of all processes is subject to the proceedings to be undertaken by the Company for the fulfillment of the business rehabilitation and the consideration of the SEC, the SET, the Central Bankruptcy Court and other relevant authorities.  
     
    Before THAI submitted a petition to commence the business rehabilitation proceeding to the Central Bankruptcy Court in May 2020, the Cabinet ordered the Ministry of Finance to reduce its shareholding in the Company to be lower than 50 percent. Consequently, THAI was no longer considered a state enterprise which enabled the Company to have flexibility in its management, to elevate its competitiveness, and to effectively transform its business and undertake actions under the business rehabilitation plan; for instance: organizational restructuring and downsizing; fleet and engine commonality; capital efficiencies including costs reduction on personnel, aircraft and engine maintenance. Ancillary and aviation revenues generated from sales and revenue optimization enabled the Company to maximize cash flow and profit. Route and network expansion to enable seamless connectivity also supported the Government’s policy and strategy on Thailand Tourism Hub.  THAI recently completed the business restructuring and acquired A320 aircraft from THAI Smile Airways resulting the airline’s fleet efficiency, competitiveness enhancement, significant increase of its operational performance, and ability to enhance route and network planning to meet the demand of THAI’s customers.
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