SET Announcements

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 impacted to 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 20th anniversary unveiling a new vision 'Pioneering Solutions for Tomorrow', with the expansion of the Out-of-Home (“OOH”) media business to embrace an integrated offline and online platform offering new advertising services or O2O Solutions. At present, VGI is the leader of O2O Solutions, the first and only in Thailand, that can meet all customers and consumers demand by using the existing database to enhance all steps of customer service. Currently, VGI’s ecosystem comprises of 3 main platforms 1) Advertising platform including Transit, Office, Outdoor and 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 Demo Power (Thailand) Company Limited. VGI’s considerable and growing data pool will serve as the key to unlocking synergies between the aforementioned entities.

Having these 3 platforms, the Company’s focus has shifted from relying solely on adspend to capturing greater market share of marketing budget as well as riding on the growth of the e-Commerce. While previously VGI was characteristically sensitive to the cyclical patterns of Thailand’s advertising environment, 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’s revenue 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 the O2O Solutions, a higher utilisation rate, digital billboards products as well as the full quarter consolidation 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 to the same period last year. Growth in revenue comes from the higher utilisation rate especially in digital media and commercial rental space at the stations. In addition, this media segment also benefited from the synergy of the O2O Solutions campaigns on the 10 BTS stations, which generated over 80 million Baht in the first quarter of 2018/19.

Meanwhile, Office Building and Other media segment revenue grew solidly, increasing by 40.0% YoY to THB 93mn. The revenue growth in the first quarter was mainly from a higher utilisation rate as well as price increases. In addition, the Company also recognised revenue from new media under the Other Media segment.

The Outdoor media segment, saw extraordinary growth of 67.4% YoY, or THB 114mn reaching THB 284mn in 1Q 2018/19. The increase was mainly due to ongoing revenue recognition of 35 digital billboards, which was rolled out in July 2017. In addition, this segment also benefitted from the full year 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% YoY or THB 17mn, mainly due to a decrease in project management fees. However, looking at the overall picture, digital services are a business that develops the advertising to be measurable and can reach even more target audiences. It is, therefore, a key variable to drive revenue for other media of the Company.

The CEO also said that VGI got off a good start to the new fiscal year of 2018/19, steadily continuing the growth trend established in the last few quarters. During first quarter, VGI reported an increase in revenue from THB 852mn to THB 1,077mn, or an increase of 26.5% YoY. For 2018/19 as a whole, the Company maintains its revenue target in the range of THB 4,400mn to THB 4,600mn and expects the net profit margin of 20 – 25%.

On July 19, 2018, VGI and Bangkok Broadcasting & TV Co., Ltd. (BBTV) jointly established a joint venture company, BV Media Ads Co., Ltd., with a 50% stake. The business is to manage advertising and public relations in the supply of actors or famous people to do marketing activities. The company expects marketing activities with Channel 7 within BVTV will further diversify O2O Solutions products and services in the future.

VGI’s warrant number 1 (“VGI-W1”) has expired on August 1, 2018. The Company received cash from the exercise of VGI-W1 amounting to 8,618 million Baht or 72% of the total. The proceeds from this VGI-W1 will be utilised for the acquisition of Kerry Express, while the remaining balance is expected to be used for the subscription of shares in the announced rights offering of MACO and expansion of the digital and online-related businesses, the CEO said.