19 Aug 2018
VGI Group Announces 1Q 18/19 Results. Continues to Grow! Strengthening the digital and online business and reiterates the Leadership in O2O Solutions
VGI Global Media (Public) Co., Ltd. or VGI, Thailand’s number one Offline-to-Online (“O2O”)Solutions provider, announces the operating results of the first quarter of year 18/19 (April – June 18)totaled revenue 1,077 million Baht, a 26.5 % increase comparing to the same period of the last year.The major driven force came from the performance of the outstanding out of home media business OOH and from the operating results in all business segments that have grown steadily and impactedto the Company’s strong earnings.
Mr. Nelson Leung, Chief Executive Officer of VGI Global Media (Public) Co., Ltd. said that this year,the company is celebrating its 20 th anniversary unveiling a new vision “Pioneering Solutions forTomorrow”, with the expansion of the Out-of-Home (“OOH”) media business to embrace an integratedoffline and online platform offering new advertising services or O2O Solutions. At present, VGI is theleader of O2O Solutions, the first and only in Thailand, that can meet all customers and consumersdemand by using the existing database to enhance all steps of customer service. Currently, VGI’secosystem comprises of 3 main platforms 1) Advertising platform including Transit, Office, Outdoorand Airport, 2) Payment and digital services platform under our subsidiary – Rabbit Group and 3)Logistics platform or last-mile delivery services under Kerry Express (Thailand) Limited and DemoPower (Thailand) Company Limited. VGI’s considerable and growing data pool will serve as the key tounlocking synergies between the aforementioned entities.
Having these 3 platforms, the Company’s focus has shifted from relying solely on adspend to capturinggreater market share of marketing budget as well as riding on the growth of the e-Commerce. Whilepreviously VGI was characteristically sensitive to the cyclical patterns of Thailand’s advertisingenvironment, we expect our new foundation for growth to make us more competitive and resilient.
The OOH media segment recorded broad revenue growth across all product groups. 1Q 2018/19’srevenue in OOH media segment rose considerably by 32.1% YoY, representing a contribution of 92.5%to total revenue or THB 997mn. The growth in OOH media revenue resulted from synergies from theO2O Solutions, a higher utilisation rate, digital billboards products as well as the full quarterconsolidation of Co-Mass Company Limited (“Co-Mass”) in the Outdoor media segment.
Within the OOH media, Transit media revenue is 620 million Baht, an increase of 19.5% compared tothe same period last year. Growth in revenue comes from the higher utilisation rate especially in digitalmedia and commercial rental space at the stations. In addition, this media segment also benefited fromthe synergy of the O2O Solutions campaigns on the 10 BTS stations, which generated over 80 millionBaht in the first quarter of 2018/19.
Meanwhile, Office Building and Other media segment revenue grew solidly, increasing by 40.0% YoYto THB 93mn. The revenue growth in the first quarter was mainly from a higher utilisation rate as wellas price increases. In addition, the Company also recognised revenue from new media under the OtherMedia segment.
The Outdoor media segment, saw extraordinary growth of 67.4% YoY, or THB 114mn reaching THB284mn in 1Q 2018/19. The increase was mainly due to ongoing revenue recognition of 35 digitalbillboards, which was rolled out in July 2017. In addition, this segment also benefitted from the fullyear consolidation of Co-Mass, which was acquired in June 2017.
For Digital Services business contributed 7.5 % of total revenue or THB 80mn, decreasing by 17.2% YoYor THB 17mn, mainly due to a decrease in project management fees. However, looking at the overallpicture, digital services are a business that develops the advertising to be measurable and can reacheven more target audiences. It is, therefore, a key variable to drive revenue for other media of theCompany.
The CEO also said that VGI got off a good start to the new fiscal year of 2018/19, steadily continuingthe growth trend established in the last few quarters. During first quarter, VGI reported an increase inrevenue from THB 852mn to THB 1,077mn, or an increase of 26.5% YoY. For 2018/19 as a whole, theCompany maintains its revenue target in the range of THB 4,400mn to THB 4,600mn and expects thenet profit margin of 20 – 25%.
On July 19, 2018, VGI and Bangkok Broadcasting & TV Co., Ltd. (BBTV) jointly established a joint venturecompany, BV Media Ads Co., Ltd., with a 50 % stake. The business is to manage advertising and publicrelations in the supply of actors or famous people to do marketing activities. The company expectsmarketing activities with Channel 7 within BVTV will further diversify O2O Solutions products andservices in the future.
VGI’s warrant number 1 (“VGI-W1”) has expired on August 1, 2018. The Company received cash fromthe exercise of VGI-W1 amounting to 8,618 million Baht or 72% of the total. The proceeds from thisVGI-W1 will be utilised for the acquisition of Kerry Express, while the remaining balance is expected tobe used for the subscription of shares in the announced rights offering of MACO and expansion of thedigital and online-related businesses, the CEO said.