INVESTOR RELATIONS QUARTERLY REVIEW: ISSUE 18
BTS GROUP HOLDINGS PLC
2Q 14/15
(For the quarter ended 30 Sep 2014) (Ended June 2010)
AT A GLANCE
FROM THE EDITOR
SHARE INFORMATIONA Shares Outstanding Free FloatE Par Value Market Capitalisation YTD daily traded valueD Stock Identifiers Stock Exchange Symbol Bloomberg / Reuters
Dear Investment Community,
11,914.2mn sharesG 58.1% THB 4.0 / ShareF THB 121.8bn / USD 3.7bnB THB 516.2mn / USD 15.8mnB BTS BTS TB / BTS.BK
REVENUE BY BUSINESS UNIT MASS TRANSIT 33%
SERVICES 8%
GROSS PROFIT BY BUSINESS UNITC
MEDIA MASS TRANSIT 42% 37%
MEDIA 43%
Core network ridership grew 6.6% QoQ from the seasonal low of 1Q to 54.6mn passenger trips and also increased 2.1% YoY. The average fare also increased 0.6% YoY. Year-to-date ridership growth is tracking at 2.0% YoY (below our targeted 58% forecast for the fiscal year) and average fare at 3.5% YoY (above our targeted 1% growth for the fiscal year). We still maintain our guidance of 6-9% revenue growth at the Core Network for FY 14/15 although YTD figures indicate it will be at the lower end of this range. O&M income also increased 36.3% YoY to THB 392.2mn from the full quarter effect of the operation of the Green line extension which began operations in December 2013 and the additional scope of work in BRT contract. Our Media business continued its recovery with 2Q 14/15 revenue increasing 4.4% QoQ to THB 787.0mn. The expectation is that this recovery will continue. The fact that 2Q 14/15 revenue was still 7.1% lower than the corresponding quarter last year would also indicate this likelihood. However, in spite of this, VGI has reduced its target revenue growth for the fiscal year (compared to last year) from 13-17% growth to 0-3% growth. This revision is mainly on account of reduced advertising spend on the back of both consumption slowdown and political disruption in 1H 14/15 together with a slower-than-expected subsequent recovery. This revised forecast also excludes any impact from acquisitions (which are accounted for at a net profit level) and assumes that Tesco Lotus will not renew its sales floor contract with VGI from when it expires in February 2015. Despite this weakness, BTS-related Media remains a relative pillar of strength. Revenue from BTS-related Media increased both 3.2% QoQ and 3.6% YoY to THB 441.6mn. BTS-related Media continues to generate 56.1% of VGI’s revenue and 80.1% of gross profit. We are optimistic that VGI will see future benefit from its parent company’s ability to secure future rail concessions. Within the Modern Trade sector, we are also pleased to confirm that VGI has been able to renew its contract with Big C until 2019 as well as sign a new contract with FamilyMart. Finally, on 31 October 2014, VGI’s Board of Directors also withdrew the resolution to subscribe to new shares in SET-listed company Tong Hua Communications PCL (TH). This was on account of the target company’s inability to fulfil the agreed terms and conditions.
SERVICES 7%
PROPERTY 18%
In 2Q 14/15, operating revenue (including share of net profit from BTSGIF) increased by 7.3% QoQ to THB 1,871.5mn following improvement across all four business units. Operating EBITDA also improved 7.1% QoQ to THB 738.7mn, however, this improvement was not reflected at a net profit level, with net recurring profit declining by 1.0% QoQ to THB 761.8mn on account of a reduction in interest and investment income from previous quarter.
PROPERTY 13%
Source: Company
BTS LAST 12 MONTHS SHARE PRICE PERFORMANCEA:
EQUITY MARKETSH
3 MO
6 MO
12 MO
BTS TB SET Transport Index SET Index NIKKEI 225 HANG SENG FTSE 100 S&P 500
15.6% 8.9% 3.7% 10.8% -3.8% -1.7% 5.4%
25.3% 19.6% 12.5% 16.2% 7.6% -4.1% 8.3%
14.3% 12.2% 10.1% 17.1% 2.7% -3.3% 14.3%
CURRENCY MARKETSH USD vs THB EUR vs THB THB vs JPY THB vs HKD THB vs SGD THB vs GBP
3 MO -2.0% 4.9% -9.1% 2.0% -1.3% -3.3%
6 MO -1.4% 9.7% -9.9% 1.5% -1.8% -4.5%
12 MO -0.4% 9.4% -7.8% 0.4% -1.8% -3.1%
Within October, the Company announced 2 separate deals which brought more clarity to BTS Groups’ property strategy. More details can be seen in the Company’s public releases as well as in the presentation, which is available for downloading at http://bts.listedcompany.com/slides.html. In summary however, the approach is to partner with SET listed property players, namely Sansiri (SIRI TB) for residential real estate (within 500m of mass transit stations) as well as Natural Park (NPARK TB) for Commercial real estate. The latter deal remains subject to corporate approvals. Following successful execution of these transactions, BTS will have i) recognized gains on sale of assets to the benefit of existing BTS Group shareholders ii) partnered with real estate players with expertise in their respective sectors iii) retained a major economic stake in the development of those assets and iv) done so using only its existing assets as equity without the need for further investment. Finally, since the Board of Directors approved a Share Repurchase programme on 8 August 2014, the Company has subsequently repurchased approximately 95.8mn shares (or 0.8% of the issued shares of the Company) from the market for a total consideration of THB 925.2mn at an average price of approximately THB 9.65 per share. The programme lasts until 24 February 2014 and the Company is mandated to buy up to 600mn shares (or approximately 5.04% of issued shares). Yours faithfully,
Daniel Ross Financial Director
Our City Our Future
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