RS Plc, the country's second-largest entertainment company, is still confident it will post 33% revenue growth to 2.9 billion baht with net profit of 330 million this year even as recent unrest dimmed ad spending in April and May.
RS Plc chief operating officer Pornpan Techarungchaikul (left) and chief financial officer Darm Nana discuss business trends at an investors’ briefing yesterday.
Chief financial officer Darm Nana said the impact from conflicts was short-lived. Music downloads and ad spending dropped only during the one-week curfew. Fortunately, RS had no show business events scheduled during that period.
''Moreover, revenue from broadcasting the World Cup 2010 football matches, which is expected to be around 700 million baht, will help boost revenue growth this year,'' he said yesterday.
RS projects 100 million baht in profits from the World Cup, with 80% of it booked in the second quarter and the balance in the third. Consequently, second-quarter performance should improve by 50% from the first quarter.
It also believes its music content will bring even stronger growth in digital music revenue.
The company is also talking with cinema operators about expanding the screening period for the movie Sam-Yan by one to two weeks because some people may have missed it during the curfew. It expects to generate another 10 million baht on top of the 30 million earned already.
In the first quarter, the company reported a net profit of 53.78 million baht on revenue of 539 million, compared to a net loss of 47 million baht on revenue of 481 million a year earlier. Music and digital business contributed 48% of total revenues, show business 28% and media 22%. It released 33 new albums, down from 39 in the fourth quarter of 2009.
RS aims to clear accumulated losses of 88.3 million baht by the end of June. Revenue from the World Cup will be the key factor in achieving this goal.
''We hope to pay dividends on about 50% of net profits next year. This would be the first dividend payment in four years. Our average net profit margin this year will improve to 11% from 9.7% in the first quarter,'' said Mr Darm.
Pornpan Techarungchaikul, chief operating officer, said the company was still confident about next year even without the World Cup. ''After restructuring to focus on digital content, our bottom line will be better. This will help boost our profit. The gross margin of digital music is lower than physical music by around 50-60%,'' she said.
Digital sales will build on the success of SuperMao *339, which has 2 million subscribers. In March, the market share of RS for top-40 downloads among three mobile operators was 60%, up from 50% in the past. Main competitor GMM Grammy gained 40%, Ms Pornpan noted.
RS currently has two satellite TV channels, U Channel and Sabaydee TV, and plans to launch another two this year to target teenagers. The first one, A-List Channel, is scheduled to launch in July but needs to wait for a significant contribution in the fourth quarter.
RS shares closed yesterday on the SET at 2.64 baht, down two satang.
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