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

Good afternoon, analysts and fund managers, and welcome to the BTS Group and BTSGIF Analyst Meeting for First Quarter of 2026-'27. My name is [ Ken ] from Investor Relations team, and I will be your moderator during this presentation. In today's session, we will begin with an overview of our business updates and financial performance followed by the Q&A session. Today, we are honored to welcome all the 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 Chitkasem, CFO of VGI; and Khun Soraya, acting CEO and CFO of RABBIT Holdings, along with other members of the management and IR teams. [Operator Instructions] To start, I would like to hand over to Khun Daniel to recap on the financial performance for this quarter.

Thanks, [ Ken. ] Good afternoon, everyone. It's 12 weeks since we last met. As usual, we have a full squad on hand to bring you our first quarterly update of the fiscal year ended 31st March 2027. Today is 19th of August, and the fiscal year-end is only 7 months away, but the way the world is changing fast by then, we've probably lost all of our jobs to AI. My only comfort is that even if we're replaced by AI, so the analysts and all the fund managers on the call will probably also lose their jobs. So I'm sure those calls will be very exciting. Anyway, moving to the quarterly business highlights, where it seems the world moves at a much slower pace, looking at the highlights that we've listed on this page. With regards to the common ticketing scheme, there's real political will behind this policy, and there's no public objection. So that's a good start. And the government has announced a target date for the implementation 1st of January 2027. So we're very hopeful on that. In parallel to that, BSS, which sits under VGI and MIX has been very busy collaborating with common ticketing stakeholders on the feasibility of the EMV implementation. Within MATCH, the key change in the quarter really related to revenue recognition, and that was related to the European hotel portfolio, which was reintegrated back into RABBIT Holdings portfolio. If you remember, there was about a 3-year period when this portfolio was signed under an SPA and RABBIT Holdings was recording lease income. But since April and the cancellation of that SPA now, RABBIT Holdings incorporates both the revenues and the cost of the underlying hotels. ROCTEC also had an acquisition of the remaining 18.4% stake in Trans.Ad during that quarter. Cutting to the financials on the P&L, we see some directional improvements. Operating revenue, THB 6.1 billion, up 5% year-on-year, 9% Q-on-Q. Share of profit of investments was significantly up year-on-year. Recurring EBITDA, THB 2.8 billion for the quarter, up 3% year-on-year. However, net loss still remains a loss. It's a negative net profit. Company net loss of THB 496 million and net loss attributable to the shareholders of THB 388 million. Balance sheet, however, strengthened at a headline level. Total assets declined marginally. However, we saw an increase in cash and cash equivalents and also a decrease in total debt. On the cash flow, again, very simple for the first quarter, and we'll come to that into the next slide. Moving now on to the first quarter P&L snapshot. Total revenue of THB 7.492 billion, up 3% year-on-year, but 15% up Q-on-Q. That 15% increase, again, mainly due to what I mentioned before, the reintegration of the hotel portfolio from Vienna House. Operating revenue, THB 6.122 billion, you can see the revenue bridge in the bottom right-hand corner, a decline in contribution from MOVE, which was more than offset with an increase from MATCH. Recurring EBITDA, THB 2.822 billion, up 3% year-on-year, down 18% Q-on-Q. Again, that Q-on-Q decline is mainly due to a lower share of net profit relating to no repeat of a one-off share from Sansiri last quarter leading us down to net profit negative THB 388 million. Margins are broadly similar on a year-on-year basis. And finally, operating revenue breakdown for the quarter, 43% from MATCH, 38% from MOVE and 19% from MIX. Moving on to the cash flow snapshot. First quarter is always a relatively more simple picture. Operating cash flow, positive THB 3.38 billion, net investing cash flows of THB 6.6 billion received mainly from investments in financial assets, but also some interest and dividend income and financing cash flows netted out with interest payments of THB 2.2 billion, largely offsetting debenture repayment of around THB 2.6 billion, leaving us with around THB 25 billion ending cash, and that excludes the additional THB 29 billion of liquid investments. And now over to [ Saty ] for the segmental performance. Thank you.

Thank you, Khun Daniel. Good afternoon, everyone. I'm [ Saty ] from BTS Group, and I will walk you through the performance of MOVE, MIX and MATCH businesses for the quarter. Starting with MOVE. Operating revenue was THB 2.4 billion, down 12% year-on-year, but remained broadly flat quarter-on-quarter. The decrease was mainly due to the absence in construction revenue following the completion of the Pink Line extension. This was partly compensated with farebox revenue increased 5% year-on-year, supported by continued ridership growth on the Pink and Yellow Line. O&M revenue also continued to grow steadily, up 3% year-on-year to THB 1.9 billion, as shown in the bottom bar of the chart. And meanwhile, share of profit from BTSGIF declined 47% year-on-year, mainly due to the amortization of the fund investment. Moving on to the MIX business. Operating revenue was THB 1.1 billion, up 4% year-on-year, mainly driven by higher revenue from digital services and distribution segment. Advertising revenue was broadly flat year-on-year, while the utilization rate decreased slightly by -- decreased slightly to 49% from 51%. For digital services, revenue was up 7% year-on-year. This was mainly from higher insurance commission and lead generation revenue from RCare as well as higher interest income from RCash in line with the growth in outstanding loans. From -- the distribution revenue also grew 10% year-on-year, mainly driven by RBytes with stronger sales of high-margin products such as [ health ] products, beauty products and smartwatch. For this quarter, on the share of profit MIX record THB 200 million this quarter, up 380% year-on-year. The increase mainly came from the contribution from PlanB following the reclassification as an associate in July last year. And lastly, moving on to the MATCH business. Revenue increased to THB 2.6 billion, up 26% year-on-year. This was mainly driven by higher real estate revenue from RABBIT following the re-transfer of the European hotel portfolio back to RABBIT in April this year. RABBIT contributed THB 1.6 billion in revenue. Real estate revenue grew 55% to THB 1.4 billion, mainly due to the re-transfer of European hotel portfolio, as I mentioned earlier. On the other hand, financial services revenue decreased 19% year-on-year, mainly due to lower insurance revenue from RABBIT Life and ROCTEC also continued to perform well. Revenue increased 7% year-on-year to THB 0.9 billion, supported by continued growth in both transportation solutions and digital display solutions. Turn to our financial position. Overall, we remain in a stable position with healthy liquidity and adjusted net debt to equity improving slightly to 1.3x from 1.4x. 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 [ Saty. ] On this slide, we would like to provide current status on the UTA project in which we hold a 40% stake. Following the receipt of the notice to proceed or NTPs in April 2026, the project is currently undergoing feasibility studies and the design process to determine an appropriate development framework that reflects current economic conditions and the evolving business landscape. In parallel, the relevant government agencies are finalizing a special incentive package for UTA and potential investors. The package is expected to attract global investment and stimulate economic activity within the area. 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 provide an update on our MIX business performance. Overall, VGI maintained solid performance and strong profitability growth with a revenue of THB 1.1 billion and net profit, excluding nonrecurring items of THB 86 million, up 92% year-on-year. For advertising business, despite advertising industry spending from transit, out-of-home and in-store were down 5% year-on-year. We still maintain resilient revenue. In the last quarter, we launched new model packages with PlanB, BTS and City Sync and introduced our packages, Welcome Takeover, to deliver seamless brand communication and visibility. As a result, our advertising revenue remained strong, especially revenue under PlanB management, up 3% year-on-year. For digital services, we saw improvements from all business units. RABBIT Card is conducting a feasibility study on EMV card development to support the government common ticketing policy and for system connectivity. RABBIT Care already broke even at the net profit level last year and is expected to contribute higher revenue and profit to VGI. RABBIT Cash remains on track to expand its loan portfolio across both nano and welfare loans, while targeting financial inclusion for SME. As a result, RABBIT Cash was award the Best Financial Inclusion Initiative in FinTech 2026 by Global Business Outlook. Moving on to distributions. Turtle now operate 36 shops, including 4 pilot Turtle X in [indiscernible] gas station, while leasing occupancy rate up from 60% to 63% year-on-year. RABBIT Bytes introduced new products, including the Disney-licensed Gustron portable fan, Life Space Fiber Jelly and Bow's Chips which received positive market response. This aim to drive sales and narrow loss by year-end. From our strong first quarter, we remain confident in achieving our revenue target of THB 5 billion to THB 5.5 billion, driven by strong digital services growth and advertising improvement, especially during our third quarter peak season. That concludes our MIX business update. I will now hand over to Khun [ Kittipong ] for the update.