VGI Shows 33% YoY Revenue Growth in 2Q 2016/17 Due to All Segments' Healthy Growths and MACO Revenues, Confident of reaching 40-50% Full-Year Growth Target
VGI recorded revenue of THB 712mn in 2Q 2016/17, a 33% growth from the previous year, thanks to revenues earned following the MACO acquisition and the increase of investment in Aero Media's aviation media business, and to more OOH ad spending that led to revenue growths in the mass transit and office building segments. The management is confident the operating growths will continue after the implementation of the company's synergy strategy by acquiring OOH ad and Rabbit businesses from BTS Group, which will raise the ad production capacity to THB 7.3 billion, and by securing the right to manage ads for a mass transit system in Malaysia. It forecasts a 40-50% full-year growth rate.
Mr Surachet Bumrongsuk, Chief Executive Officer of VGI Global Media PCL, or VGI, a data centric media hypermarket, revealed VGI's operating results for 2Q 2016/17 (1 Jul - 30 Sep), highlighting the revenue figure of THB 712 million, a 33% YoY rise from THB 537 million, and the net profit from operation figure of THB 209 million, a 4% YoY rise from THB 193 million.
The impressive performances for 2Q 2016/17 contributed to outstanding half-year performances of 2016/17, with a revenue figure of THB 1,262 million, a 16% y-o-y rise from THB 1,086 million, and a net profit figure of THB 525 million. The successful results were attributed to revenues earned from outdoor ad business following the increases in equity holdings in MACO to 33.88% and in Aero Media from 20% to 28%, as well as continued growths in the mass transit and office building segment due to a planned increase in the number of covered office towers from 118 (as at the end of Q2 of 2015/16) to 146 in this quarter, which brought in extra revenue from out-of-home (OOH) ad spending.
For the second-half of 2016/17, he is confident that VGI will continue to experience an overall growth after the implementation of its synergy strategy by acquiring 90% shares in Bangkok Smart System (BSS) and BSS Holding (BSSH), operators of e-wallet platforms through Rabbit Line play and Rabbit Cards, which will enable it to obtain consumer behavior data for analysis and planning to ensure better focus on target audience and efficient ad performance, as part of its moves to become a "Data Centric Media Hypermarket" and increase the number of ad viewers to 25 million per day and the ad production capacity to THB 7,300 million from THB 3,900 million.
VGI stands to benefit from the decision of MACO to expand its OOH network by acquiring a 70% holding in Multi Sign, an ad management firm with 862 outdoor ad media platforms as a way to add various audience groups from the provinces into its existing audiences, which consist of consumers with high purchasing power in Bangkok, and create opportunities to enhance revenues from replacement of still-image screens to value-added digital ones.
In addition, VGI has successfully entered the Malaysian market after a joint venture firm established by it and its local partner acquired the right to manage ads on the 11 stations and 58 trains of the 51 km SBK heavy rail line, which will begin the first phase of operation by this yearend and become fully operational in mid of 2017 and is expected to serve more than 400,000 commuters per day.
"Our planned moves for this year will create new opportunities to enhance our competitiveness to support growths in the OOH segment and enable us to reach the 40-50% growth target for the year," said he.