VGI PCL (VGI), a leading out-of-home media service operator, reported a net loss of 104 million baht in the first quarter of the 2021 fiscal year, reflecting the severe effect of the coronavirus pandemic.
In the past months, a coronavirus outbreak has reduced mass transit ridership and encouraged people to work from home, resulting in a drop in revenue by 60 per cent on transit advertising and 67 per cent on office advertising year-on-year.
Nelson Leung, president of VGI, revealed that this quarter the out-of-home media business was significantly affected by marketers and brands reducing the advertising budget.
“The digital services business was negatively impacted by government measures which restrict travel both at home and abroad especially for offline payments that require face-to-face transactions.”
The company’s equity income was negative 22 million baht. Master Ad (MACO), owned 27 per cent by VGI, reported a 179 million loss on its second quarter performance, down 63 per cent year-on-year.
The reasons behind MACO loss are a decline in outdoor advertising revenue, loss contribution from Indonesia operations, and 34 million baht asset write-down.
Analysts from Phatra securities believe that VGI can go survive a downturn thanks to its positive free cash flow and low debt ratio.
The expansion of Bangkok mass transit system would also lead to VGI revenue recovery after the coronavirus abates.
The mass transit ridership is expected to rebound as the commuter numbers bottomed out in April and is now recovering month by month.
Phatra maintains ‘BUY’ rating on VGI shares at the price objective of 8.30 baht as they expected a recovery in the second quarter of the fiscal year 2021.
Plan B
Plan B Media PCL (PLANB), another leading media and publishing company, also reported a decline in its revenue by 41.7 per cent to 667.3 million baht year-on-year.
EBITDA stood at 371.3 million baht, declined by 5.7 per cent compared to the same period of 2019.
PLANB’s net profit from normal business operations was at THB -71.2 million, dropping 139.5 per cent from the same period of the previous year. While net profit after TFRS16 impact was at -84.7 million baht.
The company report also stated that the slump in revenue was due to the effects of COVID-19 pandemic that continued to post threats on out-of-home media business and engagement marketing business.
PLANB shares closing price on Tuesday were at 5.40 baht per share, decreased -0.05 baht or -0.92 per cent.
