Grammy and RS cut forecasts


From www.bangkokpost.com/business/economics/2...and-rs-cut-forecasts
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Entertainment firms feel flood impact


The country's two largest entertainment companies have revised down their revenue targets in light of impact from flooding.

Second-ranked RS Plc has reduced its target to 2.9 billion baht from 3.1 billion, while top-ranked GMM Grammy expects to match last year's total of 8.8 billion, down from 10% growth forecast earlier.

Even though the RS's facilities have not been inundated, economic damage was inevitable as many of its clients have been affected by the floods, said CEO Surachai Chetchotisak.

The company estimated that it has missed potential revenue of around 200 million baht in the fourth quarter, the peak season for the entertainment industry. Around 80% of the losses come from its media business and the cancellation of many marketing activities.

"We are still evaluating whether economic damage in the fourth quarter will affect the entire year's performance. However, I believe we can maintain this year's revenue as equal to last year," Mr Surachai said.

Grammy chief financial officer Premon Pinskul said the floods would hurt its fourth-quarter performance. And while full-year revenue would be flat at 8.8 billion baht, net profit would rise significantly, based on the 180% year-on-year growth to 603 million baht in the first nine months.

"The flooding impact will continue to affect our revenue, especially media, in the first quarter of next year as many companies will cut their media spending. However, the entertainment industry is expected to get back on track in the second quarter," he said.

RS said that in the short term it would reduce expenditures and reschedule concerts and events in the fourth quarter. The company also has to revise its 2012 business plan to suit the post-flood atmosphere.

"The impacts of the flooding will probably last until the first quarter of 2012 before the business rebounds back to the normal state in the second quarter. I believe that we will see a strong recovery in the second half of next year, if there are no floods again," Mr Surachai said.

RS will continue to emphasise the satellite television business next year. Mr Surachai said there was still a large opportunity for the business as the penetration of satellite TV in Thai households was still low and the platform was becoming increasingly popular with cost-conscious advertisers.

In addition to its existing four satellite channels, the company plans a new sports channel in August next year after winning broadcasting rights to Spain's La Liga football matches for three years.

The company also plans to add another channel. The concept and business plan are still being studied.

Mr Surachai said RS was also preparing for the changes in the industry once the National Broadcasting and Telecommunications Commission completes its master plan.