BTS Group Holdings Public Company Limited (BTS) Q3 FY2026 Earnings Call Transcript & Summary

Good afternoon, analysts and fund managers, and welcome to the BTS Group and BTSGIF Analyst Meeting for the Third Quarter of 2025/'26 fiscal year. My name is [ Kan ] from IR of BTS Group, and I will be your moderator during this presentation. We will begin with an overview of our business updates and financial performance, followed by a Q&A session. Today, we are honored to welcome our management team, starting from Khun Surapong, CEO of MOVE Business; Khun Daniel, CIO of BTS Group; Khun Chawadee, CFO of BTS Group; Khun Siriphen, Fund Manager of BTSGIF; Khun [indiscernible], CFO of BTI; Khun [indiscernible], CEO of MATCH Business; and Khun Soraya, acting CEO and CFO of Rabbit Holdings; along with other members of the management and IR teams. As always, we welcome your feedback on today's presentation. Please scan the QR code that will be displayed at the end of the meeting to share your comments. [Operator Instructions] To start, I would like to hand over to Khun Daniel to recap on the financial performance for this quarter.

Thank you very much. Welcome, everyone. New quarter, new election, same more coalition politics. Thank you for your time and continued interest in BTS Group. Today, we are presenting our third quarter results ending 31st of December, and kicking off with some of the highlights this quarter. Within MOVE, as you know, all outstanding debt has been fully settled. That was repaid on the 30th of October 2025 with about THB 15 billion allocated to debt reduction. The fact is, over the last several years or so, one of BTS Group's main business has been lending to the BMA, but that period has now come to an end, which is a good thing. It's a good thing for us. It's a good thing for BMA and also a good thing for taxpayers. You'll see that reflected in our quarterly results in many areas. Also, M81 Intercity Motorway commenced full operation on the 16th of January 2026. On the MIX side, advertising revenue had a weak quarter year-on-year with a 20% decline. However, if we look on a quarterly Q-on-Q basis, Transit Media was up 13% Q-on-Q, Office Media up 33% and media utilization rate was also up, so demonstrating a good, although partly seasonal improvement in quarterly trajectory. Also, share of profit from Plan B increased 66% Q-on-Q to THB 82 million. Within MATCH, Rabbit continued its divestment program with the sale of the Diplomat Prague Hotel as well as associated obligations there. And similarly, I think we already reported on this last quarter, there was the restructuring of Keystone Estate where they sold shares to Kingkaew for THB 1.2 billion. Again, that resulted in reduction of loan. Finally, in MATCH, there was a condition subsequent to the year-end, actually on the 12th of January was the termination of a share purchase agreement to sell Vienna House Group hotel businesses. Just to recap on that, Rabbit Holdings subsidiaries entered into an agreement to sell European hotel portfolio, had received deposit payment. We're being paid a 6% or so yield on value there. But the Bayer HR Group, which was due to complete the purchase made in next year, subsequently went into bankruptcy and insolvency proceedings. The good news is that prior to the end of the insolvency, we terminated -- rather RBH subsidiary terminated the SBA agreement. So we are free to manage and sell those assets as we wish. On to the financial highlights. On the profit and loss, higher revenue, but a weaker bottom line. Operating revenue was THB 6.5 billion, up 22% year-on-year and 12% Q-on-Q. MATCH revenue of THB 2.9 billion, up 91% year-on-year and 22% Q-on-Q, and recurring EBITDA down 28% to THB 1.9 billion. We'll go into the details of each of those. At the net profit level though, we do still have a net loss attributable to the company of around THB 960 million versus a profit in the previous year. Financial position. We have a stronger capital structure following the BMA debt repayment. That's reflected in both cash and liquid investments balance of THB 59.8 billion, and adjusted net D/E of 1.29x. In cash flow, this represents the 9-month cash flow period. There, we've seen a surge in the cash flows from operations, again, primarily from the debt repayment, but we've also seen THB 27 billion investing cash flows as well. Next, on to the overview of the P&L for the third quarter and the 9 months. So total revenue, THB 7.6 billion. That's down 28% year-on-year, mainly due to absence of a onetime gain in the previous year, but also from the consolidation of ROCTEC and RBH. There has also been a decrease in net interest income. You see that's Q-on-Q, however, it's a flat trend. Operating revenue, THB 6.5 billion, a 22% increase. So that is due to the consolidation of ROCTEC and RBH. At the recurring EBITDA level, THB 1.98 billion in recurring EBITDA, down 28% year-on-year, mainly from the lower interest income above and also a share of loss. So previously, this quarter is about a THB 200 million share of loss from associates versus around about THB 250 million share of profit in the previous year. At a recurring -- sorry, on a net profit basis, as I say, a THB 958 million loss versus a THB 2.8 billion gain. How do we transition from such a moderate decrease in EBITDA to a significant drop in profitability? Okay, in addition to the absence of the onetime gain, there's also increased depreciation and also higher finance costs. So our margins -- gross operating margins despite that showed an increase to 39%, recurring EBITDA margin, a decline to 30%, and we have negative net profit margins as shown. Operational revenue breakdown, MATCH leading at 44% of revenue, MOVE at 36% and MIX at 20%. On to the 9-month cash flow snapshot. So what happened to cash over the 9-month period? Well, it grew from THB 31 billion to THB 37 billion or so, a 19% increase. The largest source of cash was, as I mentioned before, the operational cash flow of about THB 34 billion, almost entirely due to receivables from the BMA. How did the company utilize that? Mainly investing cash flows, so financial assets, THB 14 billion and PPE of around THB 12 billion. Financing cash flows were actually neither a major source or use of cash. In fact, gross debt increased over the 9 months. So that left us with about THB 37 billion of cash or THB 45.8 billion of cash and liquid investments at the end of the year. And over to the sectoral performance, [ Sasi ].

Thank you, Khun Daniel. Good afternoon, everyone. I'm Sasi, IR of BTS Group, and let's take a look at how MOVE, MIX and MATCH performed this quarter. Starting with MOVE business. Operating revenue was THB 2.3 billion, down 5% year-on-year, but stable Q-on-Q. The decline was mainly driven by the absence of construction revenue following the completion of the Pink Line Extension, which has been in operation since June last year. However, this was partially offset by stronger revenue, starting with farebox revenue grew 7% year-on-year, supported by higher ridership on both the Yellow and Pink Lines. O&M revenue also continued its steady growth, increasing 5% year-on-year to about THB 1.9 billion, as shown in the bottom bar chart. Meanwhile, share of profit from BTSGIF declined 32% year-on-year to THB 83 billion, mainly due to the amortization of fund investment. Moving on to MIX business. Operating revenue was THB 1.3 billion, down 7% year-on-year due to weaker advertising revenue, but up 17% Q-on-Q with revenue growth across all segments. In the advertising segment, revenue declined 18% year-on-year, mainly from the absence of street furniture revenue. This was partly offset by stronger performance in transit and office building media. Excluding street furniture, utilization improved to 56%, up from 54% last year. In digital services, revenue is up 1% year-on-year, supported by higher interest income from increased cash outstanding loan. And meanwhile, distribution revenue grew 8% year-on-year, mainly from stronger sale at Fanslink, and this was partially offset by weaker performance at Turtle, particularly in its retail business. Lastly, MATCH business. Revenue rose to THB 2.9 billion, up 91% year-on-year, mainly driven by the consolidation of Rabbit and ROCTEC since November '24. Rabbit contributed THB 1.4 billion during the period. Within this, real estate revenue increased 42% to THB 1.2 billion, while financial services revenue grew 25% to THB 0.2 billion. ROCTEC also delivered strong growth with revenue rising 44% year-on-year to THB 0.8 billion. In addition, other revenue surged 223% year-on-year to THB 0.7 billion, largely from land sale at [indiscernible]. And let's turn to our financial position. As of the end of December, total assets slightly decreased, mainly due to lower government receivables. This was partially offset by increase in PPE, investment properties, other financial assets as well as cash and cash equivalents. Liability is up, driven by higher loan from financial institutions and long-term debentures, partially offset by a reduction in other liabilities. Equity fell mainly from lower noncontrolling interest. And finally, our adjusted net debt to equity stood at 1.3x, with adjusted net debt at THB 128 billion. And this is all about the financial performance. Next, I would like to hand over to [ Khun Kantawan ] for MOVE business update.

Thank you, [ Khun Sasi ]. For the MOVE business update in this quarter, the key highlight is the official commitments of Motorway M81 Bang Yai to Kanchanaburi on 16th January 2026. After trial run, since October 2025, the motorway is operated by BGSR8, in which BTS Group holds 40% stake under a 30-year O&M contract with the Department of Highways. In addition, we are doing the same model for Motorway M6, Bang Pa to Nakhon Ratchasima, which is expected to commence commercial operation within this year. Next, move to the MIX business update by [ Khun Wallace ].

Thank you, [ Khun Kantawan ]. My name is [ Wallace ] from VGI IR team, and I will present the key developments of MIX business during the third quarter of '25/'26. In advertising, we introduced bundle packages, including BTS MAX, BTS CONCOURSE and Move 360, which combine our transit and office building media with [ NV ] Media. These packages allow us to reach customers throughout their daily journeys across key locations in Bangkok. This increased the frequency of media exposure and effectively enhanced brand awareness. Therefore, our transit and office media utilization and revenue increased. Moving to digital services. Rabbit Card launched edition cards, targeting customers who enjoy collectible items, including the ONEPIECE and Crayon Shinchan key chain collections, [indiscernible] strong market response and were fully sold out ahead of sales period. At Rabbit Care, we sold about 66,000 insurance policies with 67% Motor insurance and 33% other insurance during the quarter. Moreover, Rabbit Care expanded to a digital B2C life insurance [indiscernible] business by working with a leading life insurance company. In addition, we continue to offer financial products from leading financial institutions on our online marketplace. Rabbit Cash interest income grew alongside the growth of its loan portfolio. As of third quarter, Rabbit Cash lend THB 1.3 billion, increasing 28% year-on-year and 3% Q-on-Q, with a portfolio mix of 66% nano loans and 34% welfare loans. Rabbit Cash also continued to expand its welfare loan business through partnerships with the University of the Thai Chamber of Commerce and the Samitivej Hospital Group to provide financial support to emergency situations. Turning to distribution. Fanslink focused on its own and other brand products with high margin. Moreover, Fanslink has launched the Snack Maker project by collaborating with well-known content creators to offer unique snack products. In the second and third quarter, Fanslink was recognized as premium Shopee certified in April, becoming 1 of the top 3 service providers in Thailand that help brands bring their products to the online market effectively. Turtle now operates 28 shops across the BTS Green Line in [indiscernible] Yellow Line and outside the BTS network. For its retail business, Turtle has launched promotional activities for members under the Total Hub coupon and the Total Hub Member Day to stimulate spending, increase customer visits and continuously enhance customer engagement. For its leasing business, leasing occupancy stood at 62%, declining from 64% year-on-year. That concludes the MIX update. Thank you, and I will now hand over to [ Khun Kittipot ] for the Rabbit update.

Thank you, [ Khun Wallace ]. My name is [ Kittipot ] from Rabbit IR team. Rabbit is now a subsidiary of BTS Group Holding, which hold approximately 68%. For financial performance of Rabbit Holding in 2025, Rabbit Holding reported a total revenue of THB 8 billion, increasing by 42% year-on-year. EBITDA was THB 4 billion. Net profit was THB 1 billion. This quarter, Rabbit successfully executed significant restructuring transactions to optimize its asset portfolio and mitigate financial risk. First, international school restructuring. To address ongoing financial challenge and improve long-term performance, Rabbit has partnered with a new operator licensed under [indiscernible] Wycombe Abbey brand. The school will be rebranded as Wycombe Abbey International School Bangkok. Structurally, we are moving to a lease-based model. Rabbit is now act as the leaser, leasing the school property under Keystone Management Company Limited and the hotel under [indiscernible] Company Limited to the new operator. This ensures a predictable and stable cash flow. Furthermore, WA Education Service Thailand Company Limited has been established as a school operator. Rabbit hold a 25% stake in this entity. Moving forward, Rabbit will recognize our share of the school performance via the equity method on our finance statements. Second transaction, Vienna House Business Restructuring. Rabbit own a portfolio of European hotels leased to HR Group. This portfolio contribute approximately THB 6 million to THB 7 million in annual rental income between 2022 and 2025. However, HR Group has default [indiscernible] in late 2025. Rabbit exercised their contractual right to terminate our agreement related to HR Group. Therefore, we are now at a crossroad with 3 clear strategic options for this European asset, including first option, releasing, securing new tenant to return to a recurring rental income model. Second option, direct operation. This would allow us to consolidate the full income statement, capturing the total top line revenue and operational upside. And the last option, divestment, a full exit from European market to realize capital gain and reinvest the proceeds into higher growth opportunity. Next, I would like to hand over to [ Khun Pantita, ] ROCTEC IR team, for further MATCH update. Thank you.

Thank you, [ Khun Kittipot. ] Allow me to walk you through ROCTEC performance, beginning from your left-hand side. In the third quarter, we delivered operating revenue around TBH 900 million, up 27% year-on-year. That brings our 9-month revenues to around TBH 2.5 billion, representing around 12% growth. The main driver continued to be ICT solutions, which now account for 94% of total revenues. Within that, digital display solutions continued strongly in this quarter as sizable orders were recognized. At the same time, our advertising business remained stable with solid performance from our street furniture assets. On margins, we remain resilient. For the 9-month period, gross profit increased 10.2% year-on-year, over THB 700 million, and gross margin was maintained at 28.3%. There was some margin pressures in the third quarter due to project mix, but overall margin performance maintained intact. This reflects our strategies to capture scale today while building a stronger base of recurring engagement. At the bottom line, NPAT increased over 55% year-on-year to THB 370 million, with net profit margin 14.5%. The growth was partly supported by a lower base last year. This includes certain one-off SG&A items. But overall, earnings [indiscernible] to improve alongside operating leverage. Now if I turn to the right-hand side of the slide, this highlights some key achievements over the past quarter. Transportation solutions and integrated technologies are gaining momentum in terms of revenue recognition. Importantly, many of these provisions are interconnected. For example, we upgraded the universal platform for the railway system in Hong Kong and at the same time, implemented security systems across the same rail network. This demonstrates our ability to provide integrated solutions rather than stand-alone projects. Lastly, digital display solutions remain our largest contributor, supported by sizable orders from strategic partners. At the same time, we continue to innovate. The Christmas tree LED installations and the Sphere LED display are shown in the first 2 pictures toward the bottom of the page at leading shopping mall, a good example of how we combine engineering capabilities with creative executions. Overall, the past 9 months reflects continued scale expansions, improving earning qualities and growing integrations across our solution platform. This is the ROCTEC performance in this quarter, and I would like to hand over to Khun S Pen to update our BTSGIF half.