Confident of Hitting Baht 4 Billion Full-year Revenue Target
BANGKOK — SET-listed VGI Global Media PCL (VGI) has reported Baht 852 million revenue in the first quarter of its fiscal year 2017/18, an increase of 37% from the same period last year while net profit from operation was Baht 192 million. The company is confirmed full-year revenue target of Baht 4 billion.
VGI’s Deputy Chief Executive Officer Mr. Lap Shun Nelson Leung said results from the first fiscal quarter (April 1-June 30) which represent a 37% increase from the same period last year showing a solid performance driven by an improvement in all of the group’s business sectors.
The Transit sector (BTS) which is the core business, generating revenue of Baht 519 million, up 23% from the same period last year. Thanks to collaborative efforts with the Rabbit Group to offer in innovative media and deliver higher sale growth. This business sector also has expanded internationally, the Company has also started to roll out advertising campaign on 2 SBK sky-train stations in Malaysia out of the total 31 stations and has completed installation of display advertisements on 7 trains.
Meanwhile, VGI has also been highly successful in expanding advertising space in office buildings. Out of the full-year target of covering 170 office buildings this year, the company has already covered 166 buildings in the first quarter, which signifies strong revenue recognition in the remaining quarters. Revenue in the first quarter has stabilized at Baht 66 million.
For outdoor segment, VGI recorded Baht 170 million of revenue through MACO. As MACO will be spearhead in Out-of-Home media, its strategy is to secure the leadership and market share in Out-of-Home media in Thailand. In a meantime, MACO is monetizing its existing assets by converting the static media into digital screens. Currently, it has a total media capacity of Baht 1.4 billion. Also, in this quarter, MACO has improved its cost efficiency and recorded profit growth of 26% YoY.
Revenue from digital services business by Rabbit Group increased 19% to Baht 97 million as the number of Rabbit Cards has reached 7.8 million with 126 partner brands covering more than 4,000 outlets with 2.2 million people using Rabbit LinePay.
Our associated companies have also expanded notably. For example, in the aviation sector where Aero Media operates a fully-integrated advertising service covering 13 airports, 70 aircrafts and 57 air bridges as well as all advertising in the AOT website. Meanwhile, Demo Power (Thailand), which provides marketing services by giving product samples and sales demonstration, has expanded its services to cover the entire BTS skytrain network.
The VGI Deputy CEO noted that the Baht 192 net profit from operation in this quarter represents a 3% increase from the same period last year despite a higher expenses due to M&A effect as well as interest expenses from VGI’s recent investments.
It was noted that the company’s financial statement shows a Baht 175 million net profit, compared to Baht 313 million net profit last year which included an extraordinary item related to fair value measurement in MACO of Baht 207 million.
“This past year has been a year of investment for VGI, signifying that we now have a media base covering all the key advertising platforms. The direction from now on is to transform our business model from on traditional Out-of-Home media into a fully integrated cross-media platform, delivering targeted advertisements and provide value to brands,” Mr. Lap Shun Nelson Leung said.
VGI will serve as the centric to integrate all of our business units in the one-stop shop solution where each of the business unit is positioned to capture the leading position in its respective field. For instance, MACO will be a spearhead in Out-of-Home media expanding its network nationwide as well as digitizing its assets. Meanwhile, Aero Media will be responsible to capture the leading position in aviation media.
Mr. Lap Shun Nelson Leung added that since the advertising industry is highly correlated to macro economy. It is indicated that the GDO will expand solidly this year thanks to improvement of exports, tourism growth as well as government spending on mega projects. As such, VGI is confident it will be able to achieve the full-year revenue target of Baht 4 billion.