Thai music group RS predicts strong 2010

Second-largest entertainment conglomerate to erase losses

BANGKOK -- Thailand's second-largest entertainment group, RS PCL, said Tuesday it expected a jump in earnings this year as it boosted revenue from its music and other businesses, allowing it to resume dividend payouts.

The company forecast 2010 sales would rise at least 30% to around 2.9 billion baht ($87.8 million), while net profit could be 330 million baht, officials told a briefing.

The profit would wipe out the company's retained losses, senior executive vice-president Darm Nana told reporters.

"The dividend payout will be discussed at a shareholder meeting in February. The retained loss would decrease from May this year and be wiped out by the end of this year, and a dividend for 2010 could be paid out in 2011," Darm said.

RS, whose sales of songs through mobile phones and the Internet account for 66% of revenue, posted a net profit of 21.9 million baht for the first nine months of 2009. It was expected to show a full-year profit after two years of losses.

Broker Kiatnakin Securities forecast a 2009 net profit of 62 million baht, rising to 162 million in 2010 on annual revenue of 2.7 billion baht, according to a research note in December.

Darm said the company would spend 65-70 million baht this year on investment, mainly for its third satellite television channel planned in the first quarter.

The company has shifted away from the CD business to higher-margin sectors like mobile downloads and TV programs to compete with rival GMM Grammy.

It said it aimed for a gross margin of 30% this year.
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