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WHA Group Shows Q1/2022 Performance, Generating Normalized Profit of THB 653.2 Million, Rising 255.4% and Expects to Close Major Deals in Logistics and Industrial Estate Businesses in Q2

Bangkok - WHA Corporation Public Company Limited (WHA Group) announced its Q1/2022 performance, generating a total revenue and share of profits of THB 2,182.2 million, and a net profit of THB 656.1 million. The normalized total revenue and share of profit stood at THB 2,164.6 million, and the normalized profit amounted to THB 653.2 million, from the growth of the Group’s four business hubs. Group CEO Jareeporn Jarukornsakul hinted that some good news await in Q2/2022. An important deal with a major e-commerce customer is nearly completed, for the rent of a Built-to-Suit project covering approximately 35,000 square meters. It is also in talks with several key customers who expressed interest in buying 2,000-3,000 rai of land. Meanwhile, the plan to sell assets to WHART – HREIT this year would cover an area of 200,000 square meters, worth about THB 5,300 million.

WHA Corporation Public Company Limited (WHA Group) reported its Q1/2022 financial results, generating a total revenue and share of profits, and a net profit of THB 2,182.2 and 656.1 million respectively. Normalized total revenue and share of profit stood at THB 2,164.6 million while normalized profit was at THB 653.2 million, up 48.8% and 255.4% year-on-year, reflecting the strong performance of the company’s 4 business hubs. The logistics business showed outstanding results in Q1/2022 from project openings and the signing of contracts for Built-to-Suit projects and ready-built factories/warehouses, representing an additional 23,843 square meters. WHA Logistics also enjoyed short-term contracts with high returns for 88,608 square meters. As a result, at the end of the first quarter, the company had a total warehouse space of 2,573,282 square meters under its ownership and management. The digital platform business also showed strong performance in the first quarter, with the successful sale of two data centers, generating a significant profit of THB 344.6 million.

Ms. Jareeporn Jarukornsakul, Chairman and Group CEO of WHA Corporation Public Company Limited, revealed the performance of the Group’s 4 business hubs. In Q1/2022, the logistic business recognized revenue from property rentals of THB 228.5 million, generated by project openings and the signing of contracts for Built-to-Suit projects and Ready-Built factories/warehouses, which increased by 23,843 square meters. In addition, the company had high-yield short-term contracts totaling 88,608 square meters. As a result, at the end of Q1, the company had assets under owned and managed of 2,573,282 square meters.

WHA Mega Logistics Center Project Thepharak Km.21, a mixed-use logistics center that provides warehouses and Built-to-Suit factories with areas ranging from 5,000 to 100,000 square meters, welcomed Kerry Logistics (Thailand) Co., Ltd. as its first customer. The company signed a Built-to-Suit contract for an area of 10,000 square meters. Currently, Kerry Logistics has a total space of over 18,000 square meters with WHA Logistics. The project fulfills transportation needs between Kerry's warehouses to Laem Chabang Deep Sea port in Chonburi. The WHA Mega Logistics Center Theparak Km. 21 is a large project located in a strategic location, with ease of access, and close to Suvarnabhumi Airport.

In Q2/2022, WHA Logistics expects to close Built-to-Suit contract deals with large e-commerce customers for approximately 35,000 square meters. This will result in the increase of contracts for Built-to-Suit projects, Ready-Built factories/warehouses by at least 50,000 – 60,000 square meters in the first half of the year. This reflects the continuous growth of WHA’s logistics business.

At the same time, the company still focuses on adopting new digital technologies to enhance operations’ efficiency. This enables customers to utilize these technologies to improve their working processes, reduce their operating costs and improve efficiency. Over the past few years, WHA raised industry standards by investing in cutting-edge digital technologies. Big Data, Cloud Computing, Artificial Intelligence (AI), Internet of Things (IoT), Cyber Security, and Blockchain technologies have been deployed to ensure the long-term, sustainable growth of the company. In the future, warehouses and factories will be equipped with cutting-edge innovations such as robotics, Automated Storage and Dispensing System (AS/RS), Automated Guided Vehicle (AGV) and Smart Warehouse Management Systems. The company also plans to expand cooperation with startup companies such as Giztix and Storage Asia, in which it invested and became a shareholder last year. The aim is to offer new products and services, as well as to strengthen relationships with business partners and startup companies in various industries.

WHA Tower welcomed customers who are gradually renting more office areas. For example, Giztix signed a 5-year rental agreement for 1,110 square meters, starting from January 2022. Veger rents an area of 1,096 square meters under a 6- year contract, starting from 10 March 2022.

Regarding its plan to sell assets and/or leasehold rights to WHART and HREIT, for which the company set a target of 200,000 square meters this year, worth approximately THB 5,300 million, it will be submitted to the WHART and HREIT unit holders’ meeting to seek their approval during the second quarter of 2022.

Industrial Estates Business - In Q1/2022, WHA Industrial Development (WHAID) recognized revenue from the industrial estates business totaling THB 694.0 million, a significant increase compared to the same period in 2021. It is due to an increase in revenue from land transfers, in line with the overall economic recovery and the improving investment trend because of the country’s reopening policy. The measures to unlock Test & Go travel made it more convenient for foreign customers to make business trips to Thailand. In the first quarter, the company recorded total land sales of 36 rai in Thailand. In Vietnam, a MOU was signed for 124 rai, resulting in a 400-rai backlog to transfer to customers at the end of Q1/2022. WHA expects to close significant land sale deals with major customers in the second quarter.

The company continues to attract more Chinese investors who express interest by visiting its industrial estates. In April 2022, the company entered into an industrial land purchase agreement for 200 rai with a large customer. It is also negotiating with several large customers for a total land demand of over 2,000 -3,000 rai. Currently, the company operates 11 industrial estates in Thailand. It recently launched “WHA Rayong 36 Industrial Estate” on an area of 1,281 rai, located in the Eastern Economic Corridor (EEC). WHA Rayong 36 Industrial Estate has been developed to welcome investors from around the world, especially in targeted industries (S-curve) such as modern automotive, robotics, aerospace, electronics and logistics, etc.

In Vietnam, the company signed a MOU for a total of 124 rai, in line with the recovery of the manufacturing industry and foreign investments. The company received a huge response from investors due to the rising foreign direct investments (FDI) in the country. Therefore, WHA Industrial Zone 1 - Nghe An accelerated the development of Phase 2 on an area of over 2,200 rai. The construction already started in the first quarter this year. Once Phase 1 and Phase 2, as well as the extended areas of WHA Industrial Zone Nghe An are completed, it will have a total area of over 11,550 rai.

Recently, WHA Industrial Zone 1 - Nghe An and Huali Group of Taiwan jointly signed a MOU for a land lease agreement at the Head Office of the Nghe An Provincial People's Committee. Huali Group’s project for the manufacturing and the processing of footwear for export is located in WHA Industrial Zone 1 - Nghe An. The construction is scheduled to commence in August 2022 and can be opened for operations in June 2023

Furthermore, the company also keeps on developing two new industrial zones: “WHA Smart Technology Industrial Zone - Thanh Hoa”, which is close to the main city of the province. The project aims to serve the needs of high-value technology investors. The “WHA Northern Industrial Zone - Thanh Hoa” project is located in a strategic location adjacent to Nghi Son Petrochemical Center. It targets middle and downstream industries. Construction is expected to start in 2023 and 2024 respectively.

In January, WHA Group signed a MOU with the Faculty of Public Health, Mahidol University, to enhance the cooperation in "Healthcare and Wellbeing in the Industrial Sector" with the goals of developing and promoting health awareness and understanding as well as well-being in the industrial sector. The 5-year agreement is part of the company's initiatives to provide a healthy environment and safe workplace for those who work in factories as well as employees in WHA's logistics centers and WHA industrial estates in Thailand.

Utilities business - In Q1/2022, the water business saw outstanding growth, enabling the company to recognize revenue of THB 622.0 million, with sales and water management in Thailand and abroad totaling 36 million cubic meters, an increase of 11% year-on-year. In Thailand, water sales and management accounted for 30 million cubic meters, up 9% year-on-year, reflecting the continuous growth and increase of water consumption from existing customers, especially major customers in the petrochemical sector and power plants which saw a huge increase in water consumption.

The sales volume of value-added products recorded continuous growth of 11% year-on-year, due to the rising water demand from power plant customers such as Gulf SRC and GPSC. In Vietnam, the Duong River Surface Water Plant (SDWTP) project recorded total water sales of 6 million cubic meters, according to WHA’s shareholding equity, up 24% year-on-year, due to the increasing demand for water from both existing and new customers.

The company will keep on developing value-added water products such as recycling water and demineralized water, along with the development of Smart Utilities Service Platform and Innovative Solutions to serve customers in WHA industrial estates and in Asia Industrial Estate (Map Ta Phut). It recently signed a demineralized water purchase agreement with its first customer, representing a production capacity of more than 0.8 million cubic meters per year. It expects to start selling water to customers in the Q4/2022.

In addition, the Company entered into an agreement with Gulf Energy Development Public Company Limited (GULF) to produce premium clarified water from wastewater treatment systems. It is the second project to provide services to GULF by utilizing water in the power generation process of Tasit 3 and 4 Power Plant Project in WHA Eastern Seaboard Industrial Estate 1. Under the 15-year water purchase agreement, the company can start commercial operations in July 2022. It is expected to provide 1.4 million cubic meters per year of premium clarified water for the power plants. Commercial operations are expected to start in Q3/2022. In Vietnam, the company expects that wastewater management sales will grow further, with a plan to expand the utilities business in parallel with the development of another two industrial zones, namely WHA Industrial Zone Nghe An Phase 2 and WHA Thanh Hoa Industrial Zone, which will start construction in 2023 and 2024 respectively.

In the power business, the company recognized in Q1/2022 a normalized share of profit from investments in joint ventures and associates, excluding exchange profit/loss, and revenue from the solar power business at THB 92.8 million. The decrease was due to the decline in normalized share of profit from GHECO-One Power Plant. The main reason was because of the suspension of coal exports from Indonesia, which caused the rise of coal prices. Also, the power plant halted operations during an 18-day maintenance period. The rising costs of natural gas were also a major factor causing the decline of normalized share of profit from the SPP power plant, while the government's electricity tariff adjustment did not occur yet. Electricity tariffs will be adjusted according to the normal adjustment cycle in May and September.

At the same time, the solar power business saw substantial growth. In the first quarter, the company signed five additional contracts for solar rooftop projects, representing a total capacity of approximately 13 MW. With a capacity of 9.88 MW, the Mega Bangna project is expected to start commercial operations by the end of 2022. The company also started commercial operations (COD) to produce and distribute solar power to customers for an additional 3 MW. At the end of Q1/2022, the company had solar power purchase contracts totaling 105 MW, representing a total contracted capacity of 655 MW according to its shareholding equity.

In April, the Solar Farm project of SUPERNAP (Thailand) Co., Ltd, a tier-4 certified data center provider with the most advanced technology in the ASEAN region, occupying a total area of 10,000 square meters, commenced construction. The project will reduce power costs for SUPERNAP (Thailand) and its customers throughout the contract lifespan, while reducing carbon dioxide emissions into the atmosphere by 18,250 tons.

The company also focuses on carbon reduction operations through the production and distribution of renewable power. The greenhouse gas emission could be reduced for over 26,378 tons of carbon dioxide equivalent last year from solar energy projects. In comparison, greenhouse gas emissions from all activities of the Group during the same period in 2021 accounted for 19,250 tons of carbon dioxide equivalent. Therefore, it can be considered that WHA Group could already achieve Carbon Neutrality by 2021. The Group remains committed to reduce its environmental impact and to be part of the climate change solution towards Net Zero Emission of greenhouse gas. It is in the process of making long-term plans to achieve its target of Net Zero greenhouse gas emissions. The detailed plan and clear timeline will be announced later on.

The company will continue to be a leader in the renewable energy business and to develop energy innovations in collaboration with various partners. This includes the collaboration with PTT Public Company Limited (PTT) and Sertis Co., Ltd to co-develop a Peer-to-Peer Energy Trading Platform, or “RENEX”, to facilitate both power producers and purchasers of renewable energy by using Blockchain technology to enhance security of transactions and facilitate energy trading between entrepreneurs in WHA industrial estates. The project also receives cooperation from the Provincial Electricity Authority (PEA). Twenty-three leading operators in WHA's industrial estates have joined the project. It is currently in its final preparation process with commercial trading services expected to start in Q2/ 2022.

Digital platform business - In Q1/2022, the digital business performed well. The company monetized two data center assets and generated a profit of THB 344.6 million. It is still committed to introduce digital innovations to increase business competitiveness and to respond to the needs of customers. The company plans to invest about THB 4 billion in digital business within the next 4-5 years in order to transform itself from its current business model into a tech company,

Recently, the company signed a MOU to promote and develop digital healthcare with Samitivej Public Company Limited. The objective is to provide access to healthcare services and solutions for all employees and customers in its industrial estates, logistics centers, and WHA's office buildings through the newly-developed WHAbit platform which has been co-developed with Samitivej Virtual Hospital service of Samitivej Hospital. Both companies will jointly explore, conduct studies, and develop necessary working processes to deliver the most efficient online healthcare solution that can also be connected to offline channels. The services also include telemedicine consultation, health check-up, non-communicable diseases clinic, Smart Clinic, drug dispensing, data analytics and other related services.

The company also continues to provide support to customers and investors who want to integrate 5G technology to improve their businesses and enhance competitiveness by making investment plans with leading telecommunication service providers to do network installation planning and distribution of 3G, 4G and 5G networks, along with the installation of fiber optic cable networks (FTTx) throughout the 11 WHA industrial estates within this year. This is to support the utilization of 5G technology in the future.

WHA Group’s Chief Executive Officer concluded that the Company received an overwhelming response from institutional investors and high net worth investors in the offering of debentures No. 2/2022, totaling THB 6.5 billion after the offering was launched in March. This reflects investors’ confidence towards the company as a result of its continuous business expansion plans as well as its strong financial structure. With the proceeds raised from the issuance, the Company shall repay existing debt, and/or utilize for working capital/capital expenditure to support its business operations.

In addition, the Annual General Shareholders' Meeting approved the dividend payment for 2021 operating results of 0.1002 baht per share. Prior to this, the company already paid dividends to shareholders at 0.0267 baht/share and will pay additional dividends at 0.0735 baht/share. The dividend payment is scheduled on May 25, 2022.

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