Total consolidated assets of P2.54 billion as of March 31, 2008 is up by 9% (or P199.91 million) and 2% (or P47.54 million) compared to December 31, 2007 and year-on-year balances, respectively, due primarily to the increases in cash and cash equivalents, receivables, other current assets and other noncurrent assets as well as investments in associated companies.
Cash and cash equivalents were down by P34.27million (or 12%) year-on-year mainly due to the pay-out of mining related expenses.
 Net receivables increased by P64.7 million (or 34%) compared to December 31, 2007 balance and P52.25 million (or 22%) year-on-year mainly due to the increases in collectibles from charter flights and catering clients.

Inventories went up by 22% (or P7.14 million) year-on-year due essentially to the increase in raw materials requirements of the Company’s catering business, caused by the increase in meal uplift volume of airline clients.
Other Current Assets include unused input taxes, office supplies, creditable withholding taxes and prepaid insurance coverages for the building, equipment and staff. Total other current assets posted a marginal decrease of 4% (or P4.8 million) against December 31, 2007. However, it increased by 32% (or P21.67 million) from its P68.48 million level as of the same period last year because of the increase in prepaid accounts and additional input taxes.

The Company’s current ratio went slightly down to 2.60:1 as of March 31, 2008 (from 3.82:1 as of December 31, 2007 and 3.00:1 as of March 31, 2007) mainly due to higher accounts payable and notes payable.

Investments in associates increased by 8% (or P86.89 million) against December 31, 2007 balance due primarily to the net effect of the Company’s incremental share in the net income of its associates. Year on- year it decreased by 10% (or P122.36 million) due to cash dividends declared by associates.

Property and Equipment of P302.02 million decreased by P13.65 million (or 4%) compared to December 31, 2007 balance due to depreciation. It increased by 5% (or 13.31 million) year-on-year due to acquisition of aviation and kitchen equipments. On the other hand, accrued rental receivable and payable of P97.03 million increased by P8.00 million (or 9%) year-on-year due primarily to additional accrual of rental income and expense in compliance with PAS 17, which requires the recognition of rentals on a straight-line basis (average) over the lease term.

Deposits and other noncurrent assets rose by P32.87 million (or 27%) and P101.29 million (or 182%), when compared to the December 31 and March 31, 2007 levels, mostly because of additional deposits to suppliers for the on-going expansion of the catering kitchen facilities to accommodate new airline clients and increased in deferred charges related to the Group’s mining project.

Accounts payable and accrued liabilities increased by P9.56 million (or 7%) and P42.38 million (or 37%), when compared to December 31 and March 31, 2007 balances due to increased payables for catering and ground handling suppliers. Income tax payable on the other hand decreased by P11.33 (or 93%) year-on-year due to lower taxable income of operating units and more creditable withholding taxes available as of the end of the reporting quarter.

Notes payable of P97.00 million consist of unsecured short-term loans obtained from a local bank by one of the operating subsidiaries to settle loans from a stockholder and major capital expenditure. These loans bear interest at an annual average rate of 7.50%.

Rental deposit (refundable to LTP) of P2.02 million increased by P0.047 million (or 2%) compared against its 2007 yearend balance in compliance with PAS 17, which requires the recognition of rentals on a straight-line basis (average) over the lease term.

Accrued retirement benefits of P11.12 million went up by P3.83 million (or 52%) year-on-year due to incremental accruals for the year based on the results of independent actuarial valuation.
Minority interest represents the 20% equity share of Singapore Airport Terminal Services in MacroAsia Catering Services, Inc. and the 33% share of various individuals in MacroAsia Mining Corporation. Changes in minority interest are dependent on the results of operations of the associated companies concerned.

Cumulative translation adjustments in the equity section of the balance sheets represent the Group’s share in Lufthansa Technik Philippines’ foreign currency translation adjustments.

The Group’s total revenues were lower by P8.20 million (or 10.39%) compared to the P78.96 million earned in the same quarter last year due primarily to the P25.80 million (or 15%) decrease in revenues from in-flight catering services. The catering subsidiary has the same airline clients as in 2007.

However, revenues from catering services went down due to the decrease in number of flights serviced and therefore lower number of meals served. Ground handling and aviation revenues increased considerably by P13.23 million (or 44%) due to more airline clients serviced.
Direct costs in relation to operating revenues went up by 13% compared to its level of 68% as of the first quarter of 2007 due to higher direct overhead costs. Operating expenses in relation to operating revenues also went up by 3% from 21%, as of March 31, 2007 due to increase in general and administrative expenses particularly salaries and wages.

Equity in net income of associated companies was higher by P20.50 million (or 31%) due to increase in the net income of LTP. Net foreign exchange loss of P3.56 million is up by P1.10 million (or 44%), year on-year as a result of the lower Peso exchange rate against the US Dollar (i.e., payment of dollar denominated receivables was settled at a lower peso conversion rate compared to the booking rate previously used). Interest income went down by P0.28 million (or more than 100%) due mainly to lower cash balance as of March 31, 2008 as against the same period in 2007. Financing charges of P0.90 million was down by P0.36 million (or 29%) as a result of lower borrowings.

Equity in net income of associates represents MacroAsia Corporation’s (MAC) share in the net income/loss of its associated companies. Changes in shares from period to period are dependent upon the results of the operations of the associated companies.
Provision for income tax decreased by P11.25 million (or 95%) year-on-year due primarily to higher taxable net income of subsidiaries in 2007.