Message from Chairman of the Board

we are anticipating the growth of advertising expenditure in this year. In any event, we still committed to expand this business which is our expertise to create a stable and sustainable business growth.

To: Company Shareholders BEC World Public Company Limited

9,890

Million Baht

Total Revenues in 2017/18

11.3%

lower compared to the previous year.

2017 is another important transition year of BEC World Group. There are changes in the management structure, changes in the executives in many levels, and many additional Personnel into the organization from various background and experiences to increase efficacy and efficiency of BEC World. These adjustments are a preparation for the transformation of the industry and the ever-growing opportunities from the recovery and expansion of overall economy growth, as well as new opportunities from the changes in technology and consumer behavior. However, 2017 is also another year in which our industry regressed slightly compared to the previous year due to the continuous regression throughout the year, as well as the short halt at the end of the year during the Royal Cremation Ceremony for the late King Bhumibol Adulyadej. Although there is some recovery after the halt, it is still lower compared to last year. Consequently, even though we can generate more revenue from our new channels by more than Baht 100 million, BEC World Group’s, whose revenue base is higher than other operators in the past, advertising revenue generation in 2017 is only Baht 9,890 million which is 11.3% or Baht 1,261 million lower compared to the previous year.

As a result of the continuous regression of advertising expenditure since the beginning of 2015 and the fact that there is no indication whatsoever for any change to the current trend, BEC World Group has been constantly controlling the costs and expenses since a few years back to reduce the operations loss while we are waiting for the rise of advertising expenditure. However, the intense competition from new channels, who becoming more known after operating more than three years, is the major obstacle for BEC World Group to maintain its costs and expenses as we need to keep our audience share. Moreover, as we need to create new sources of incomes, there is a slight increase in costs by 5% compared to the previous year’s base from the programing costs and depreciation. Nevertheless, we still able to maintain our position as the top-rated television channel as ever. In addition, this year, we also able to reduce our expense, i.e. selling expense is decreased by 14% and administrative expenses also reduced by 8%.

Despite our effort in reducing the costs and expenses, due to the substantial dropped of advertising revenue from the regressive industry’s trend and the business halt at the end of the year, in 2017, BEC World Group has only made Baht 61.0 Million profit, which is Baht 1,157 Million or 95.0% lower compared to last year.

Despite the significant drop in net profit, BEC World Group financial position is still stable and we can still generate cash flow from our operation at a high rate as before. In this regard, after the issuance of the five-year long-term debenture in the amount of Baht 3,000 Million during the middle of the year approved by the shareholder meeting to restructure the Company’s financial structure, our cash flow has improved, and the Company become even more stable.

In 2018, although there still is no indication that the advertising expenditure will increase, from the projected higher growth rate of macroeconomic and implementation of various economic stimulus packages, as well as the well-known plan to adjust the distribution of revenue, it is expected that the domestic purchasing power will grow. This growth of the domestic purchasing power will be the main factor to stimulate more competition in the domestic consumer market. Therefore, we are anticipating a growth of advertising expenditure later this year. In any event, we still committed to expand this business which is our expertise to create a stable and sustainable business growth. In this regard, we will continue focus on increasing the efficiency of revenue generation and controlling the costs and expenses.

Despite the unfavorable environment, we continued to receive combined efforts, dedication and cooperation of our employees and associates at all levels, as well as the good support from our customers, mass media, our investors, and the general public. On behalf of the Board of Directors of BEC World Plc., we hereby express our sincere gratitude to all concerned parties.

Mr. Somchai Boonnamsiri

Chairman of the Board