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BEC World group was
able to made Baht 749 millions
as its net profit for the 2nd quarter of this year
BEC World group was able
to made Baht749 millions as its net profit for the 2nd quarter
of this year, 12 percent or Baht79 millions higher than that
of the prior quarter; an improvement of more than 27 percent
or Baht161 millions higher than that of the same quarter of
the prior year, as the advertising income increased 11 percent
or Baht 201 millions higher than that of the prior quarter;
and 23 percent or Baht392 millions higher than that of the
same quarter of the prior year; from air-time rate increases
on certain day parts, from expansion of prime and super-prime
slots and from the higher utilization rate of our commercial
air-time, whereas our costs were also higher than the prior
quarter and last year, as we changed our programming chart
and expanded our prime and super-prime slots but at a lower
growth rates; while the selling and administration expenses
do not change that much when compares with the prior quarter
and those of the same quarter of the prior year, therefore,
our profit and our operating margin had improved substantially,
as discussed further in the attached management discussion
and analysis.
BEC
World Plc.
Consolidated Financial Statements for the 2nd Quarter of the
year 2008
Management Discussion and Analysis :
Business Environment
:
The industry has improved
since the beginning of the 2nd quarter. Nielsen Media Research
(Nielsen) reported that advertising expenditure through television
(adex) is higher year-on-year (YoY) in April, and the improvements
continued further throughout the quarter with better growth
rate, push the adex for the quarter up more than 6 percent
higher YoY. Even Nielsen reported that the industry did not
expand at all in the first half of this year (because of a
big slump during the first quarter) but when reviewed the
report in details, it is obvious that several big and mid-size
advertisers have increased their adex from the prior year
level, some of them increased their adex more than 20 percent.
It's a strong evidence of diversity, strength and growth opportunity
of the industry. Furthermore, Channel 3 is also growing at
a higher growth rate than that of the industry, thus Channel
3 is gaining its market share in adex which end up increased
to 28 percent for the first half of this year.
Operating Results
:
Due to the change in accounting for investments, from
the equity method to cost method in separate (the company
only) financial statements of the company, the reported profit
as shown in the separate statements is difference from that
shown in the consolidated statement. This MD&A will discuss
those numbers shown in the consolidated statement in order
to avoid confusion.
BEC World group was able
to made Baht749 millions as its net profit for the 2nd quarter
of this year, 12 percent or Baht79 millions higher than that
of the prior quarter; an improvement of more than 27 percent
or Baht161 millions higher than that of the same quarter of
the prior year, as the advertising income increased 11 percent
or Baht 201 millions higher than that of the prior quarter;
and 23 percent or Baht392 millions higher than that of the
same quarter of the prior year; from air-time rate increases
on certain day parts, from expansion of prime and super-prime
slots and from the higher utilization rate of our commercial
air-time, whereas our costs were also higher than the prior
quarter and last year, as we changed our programming chart
and expanded our prime and super-prime slots but at a lower
growth rates; while the selling and administration expenses
do not change that much when compares with the prior quarter
and those of the same quarter of the prior year, therefore,
our profit and our operating margin had improved substantially.
Revenues :
Our advertising income in the second quarter of this year
was increased higher than that of the prior quarter by 11percent
and also higher year on year by 23 percent. The increase came
from air-time rate increases on certain day parts, from expansion
of prime and super-prime slots - which were needed to accommodate
higher than anticipated demands, and from the higher utilization
rate of our commercial air-time. The concerts and shows revenue
is declined "quarter on quarter" and "year
on year" as the number of shows reduced in this 2nd quarter
of the year.
Costs and Operating
Expenses :
Costs of services are higher "quarter on quarter"
and "year on year" as we changed our programming
chart and expanded our prime-time to enhance our opportunity
to generate higher revenue and profit; and as we expanded
our super-prime slots to accommodate higher than anticipated
demands. Costs of concerts and shows reduced in line with
revenue. The selling and administration expenses did not change
that much when compares with prior quarter and those of the
same quarter of the prior year.
Financial positions
:
Our total assets
increased when compared with balances at the end of the previous
year as cash and short term investment of our cash increased
in line with the improved profit even after the payment of
our prior year's final dividends during the quarter. Our liabilities
are almost at the same level at the end the prior year. Our
shareholders' equity increased in line with the improved profit
even after the dividend payments. BEC World's financial positions
are strong as usual.
BEC
World Plc.
Consolidated Financial Statements for the year 2007
Management Discussion and Analysis :
Business Environment
:
Following the tragic
incident at the New Year Eve, advertising expenditure through
television during the first quarter of 2007 had dropped around
5% when compares with the previous quarter, and when major
changes incurred at the other channels at the beginning of
the second quarter the industry's data as reported by Nielsen
Media Research (NMR) seems even more strange as the report
does not show any improvement despite the fact that the 2nd
quarter normally is the better quarter, but the 2nd quarter
ad-spending was 9% worsen year-on-year. However, the industry
had recovered during the 2nd half of the year as ad-spending
increased every month since the beginning of the 3rd quarter
showing growth quarter-on-quarter. Even NMR reported that
"Uniliver" the largest advertiser in the industry
had substantially cut its ad-spending through out the last
quarter of the year but the industry still shows 5% year-on-year
growth pushed the TV ad-spending in 2007 up slightly higher
than that of the prior year at 53.5 billions, but still lower
than the whole ad-spending growth which is reported at 2.5%.
TV still has 58% share of the total ad-spending. On the brighter
side, the industry is recovering and is more diversified which
should be a strong base for future growth.
Structure Changes
:
In 2007, the BEC World
group was almost unchanged except that now we have "Major
Group" as our minority partner in "Thai Ticket"
and we had disposed of all our shares in "SMBT Publishing"
to the major shareholders, and we also had brought the shares
of "BEC-Tero Exhibitions" from our partners increasing
our stake in that company to 99.9%, and we also set up a joint
venture with "Senario" to stage "Cats"
here in Bangkok.
Operating Results
:
Due to the change in accounting for investments, from
the equity method to cost method in separate (the company
only) financial statements of the company, the reported profit
as shown in the separate statements is difference from that
shown in the consolidated statement. This MD&A will discuss
those numbers shown in the consolidated statement in order
to avoid confusion.
BEC World group was able
to made Baht 2,252 millions as its net profit for the year
2007, higher than that of the last year by Baht 609 millions,
up 37 percent, as the advertising income increased continuously
since the last quarter of 2005, from the higher utilization
rate of our commercial air-time, from expansion of our super-prime
slot and from air-time rate increases on certain day parts,
while our costs of services were lower down as we had reduced
the number of local dramas whereas the concerts and shows
businesses are profitable and the selling expenses were slightly
increased. Therefore, our operating margin and growth rate
of our profit had improved substantially.
Revenues :
Our advertising income in the last quarter of 2007 was
in line with the industry, it increased higher than the previous
quarter and also higher year on year. BEC World's performance
was better than the industry as its year on year growth in
the fourth quarter is 26.9% and 14.9% higher for the whole
year; the increase came from higher utilization rate of our
commercial air-time, from expansion of our super-prime slot
and from air-time rate increases on certain day parts. The
revenue from concerts and shows in 2007 are also higher than
the prior year.
Costs and Operating
Expenses :
Costs of services were lower down as we had reduced the number
of local dramas. Costs of concerts and shows increased in
line with the revenue but at a lower rate. The selling and
administration expenses were slightly increased, only at 2.6%.
Financial positions
:
Our total assets
increased when compared with balances at the end of the previous
year as cash and short term investment of our cash increased
in line with the improved profit. Our liabilities increased
as corporate income tax is higher. Our shareholders' equity
increased because of higher profit. BEC World's financial
positions are strong as usual.
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