"VGI" announces 3Q profit of THB 271 mil., or 306% increase. BTS's ridership grows, boosting income stream from SkyTrain ads, and rental stalls. Effective ad positions prompt advertisers to inject ad budget to Modern Trade Media.
“VGI” ‐ Thailand’s leading out‐of‐home lifestyle media provider ‐ declared its operating results for 3Q 2012/13 (Oct ‐ Dec 2012), showing a 306% YoY increase in profits, with 9‐month results (Apr ‐ Dec 2012) showing net profit of THB 684 million, rising 181% YoY from THB 244 million.
Mrs. Suparanan Tanviruch, Chief Financial Officer of VGI Global Media Public Company Limited, announced that operating results for 3Q 2012/13 saw total revenue in this quarter of THB 775 million, a 52% growth YoY from THB 511 million. 9‐month revenue is THB 2.167 billion, a 42% increase from THB 1.526 billion in the same period last year.
Although sales from 3rd quarter in the previous year dropped slightly from the impact of the floods, positive factors for this quarter came from the increase of 12 BTS trains in the Silom line last year, which boosted BTS ridership by 15% YoY. Advertising budget on all BTS‐related media grew this year as a result of the ridership growth. Compared to the previous year, sales from ads on SkyTrains grew 32%, sales from on‐station media increased by 20% and revenue from merchandising space went up 27%. In addition, advertisers are now paying more attention and allocating higher budget to in‐store media, causing media occupancy on sales floor areas, in‐store LCD, and in‐store radio to increase, boosting income from all Modern Trade media by 83% YoY. Office Building Media, mega LED, and Chulalongkorn University (CU) Bus Media grew 131% YoY.
Nielsen Media Research (Thailand) Co., Ltd. reported that Thailand’s media industry’s value had reached THB 117 billion in 2012, a 12.4% YoY growth. Spending in Mass Transit media was THB 2.9 billion, a growth of 12.0% YoY, and in In‐Store Media was THB 2.7 billion, a growth of 68.9% YoY.
The advertising industry in the 4th quarter 2012 (Oct – Dec 2012, which is the 3rd quarter of VGI’s fiscal year), saw an increase in overall ad spending after the 2 effect from the floods last year. Ad spending in In‐Store Media increased 41.6% YoY, and Mass Transit increased 17.5% YoY.
Mr. Marut Arthakaivalvatee, Chief Executive Officer of VGI, expects the overall Thai media industry to grow at the rate of 10% in 2013, which is supported by Thailand’s continued economic growth of 4.5 – 5% from the recovery of the private sector after the flood crisis last year, and from the tax stimulus package and government spending in mega projects which will boost the Thai economy in the macro picture. Moreover, the expansion of the 3G network, satellite TV, and other new communication channels triggered a trend to spend on out‐of‐home media, digital media, or new media that responds to the lifestyle of people nowadays. He ensured that VGI’s core business will continue to grow strongly at a high rate in the next 3‐5 years. “We’re looking at opportunities to invest in neighboring countries in the AEC as well as opportunities in new businesses which can synergize with our core business and create the highest value from our existing resources. We believe that the current business model can sustainably generate high return to shareholders,” he noted.
A survey conducted on advertising agencies’ point of view revealed that the Thai ad industry expects an increase in marketing communication and advertising budget of 8‐10% in 2013. This is driven by the expansion of alternative media and the changes in consumers’ lifestyles, which increases exposure to out‐of‐home media such as SkyTrain media, Office Building media, and Modern Trade media. These are new media which gained higher attention this year. Big players are active on brand awareness creation and making themselves prepared for the launch of the ASEAN Economic Community (AEC) in 2015.
VGI is currently Thailand’s leading out‐of‐home lifestyle media provider, managing static adverting media network on the BTS SkyTrain system and in large‐format Modern Trade outlets across the country, with more than 10,000 displays, over 11,000 sq.m. of advertising area in Sales Floor in Modern Trade outlets, and a digital advertising media network covering BTS stations and trains, digital media in Tesco Lotus, Big C and Watson’s stores and in office buildings across Bangkok with a total of 4,600 screens. VGI also manages merchandising 3 space on 23 BTS Stations, and manages radio media in Modern Trade network of about 1,700 branches nationwide.