OPERATING RESULTS

No. EGCO 320/ 083 February 23 ,2000 Attn : The President of the Stock Exchange of Thailand Subject : Financial statements and report concerning financial results of operation for the year ended December 31,1999 We submit herewith the financial statements and the consolidated financial statements of Electricity Generating Public Company Limited and subsidiaries for the year ended December 31,1999 and 1998 , of which the operating results for the year of 1999 has been changed exceeding 20% from the corresponding period in 1998. In order to comply with the Regulation of the Stock Exchange of Thailand Re: Rules , Conditions , and Procedure Governing Preparation and Filing of Financial Statements and Reports Concerning Financial Status and Results of Business Operations of Listed Companies (No.1) B.E. 2541 item 4(7), under which any listed company has to explain the reason why the operating results has been changed exceeding 20% from the same period of previous year, we would like to clarify that the company's net profit of Baht 2,647.95 MM. for the year ended December 31,1999 is Baht 3,533.24 MM. or 57% lower than net profit of Baht 6,181.19 MM. in 1998 due to the followings : 1) The impact of currency exchange in 1999 and 1998 resulted in the company's exchange loss of Baht 240.63 MM. and gain of Baht 3,231.54 MM., respectively, which affected the expenses of 1999 increasing of Baht 3,472.17 MM. 2) Administrative expenses increased Bath 546.33 MM. ,mainly due to the following : * Pre-operating expense of the subsidiary company , Egcom Tara Company Limited,of Baht 178.76 MM. was totally recorded as operating expense when incurred in 1999. * Company's financing expense and subsidiary's refinancing expense totally Baht 70 MM. was recorded as expenses when incurred in 1999. * Project development cost of two subsidiaries ,EGCO Mining Co, Ltd.and EGCO Engineering and Service Co, Ltd. ,totally Baht 161.65 MM. was adjusted to expenses instead of capitalization in accordance with the Interpretation of the Institute of the Certified Accountants and Auditors of Thailand,dated 20 January 2000 relating to impairments of assets. To realized the above transactions to be expenses of 1999 will improve the operating result of the company and subsidiaries in the future since there will be no amortized expenses. 3) In 1999,the major maintenance of two subsidiary companies ,Rayong Electricity Generating Co.,Ltd., and Khanom Electricity Generating Co.,Ltd., decreased totally Baht 826.84 MM. from 1998 , as was expected according to the schedule of annual maintenance. Besides, interest expenses of company and the aforesaid two subsidiary companies decreased Baht 317.55 MM. due to lower interest rate ,currency exchange rate and decreasing of the principle of loans. 4) The total revenues, comprising sales and other revenues, totally decreased Baht 781.91 MM. or 7.64% due to the following:- * Interest revenues decreased significantly Baht 609.61 MM. due to the market interest rates have come down so much. * Sale revenues decreased Baht 327.62 MM.resulted from the lower electricity rate prior-committed under PPA of Khanom Electricity Generating Company Limitted. Accordingly, the net profit for the year 1999 excluding foreign exchange loss of Baht 240.63 MM. is Baht 2,888.58 MM. which is Baht 61.07 MM. or 2.07% lower than net profit excluding foreign exchange gain in 1998. Yours sincerely, Mr. Worawit Khamkanist Managing Director Accounting & Budget Division Tel : 998-5301 Fax: 955-0956