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Lukewarm reviews

The outlook for the Entertainment and Recreation sector remains cloudy due to the economic downturn and cuts in advertising spending, particularly since Sept 11.

The sector has been a relatively poor performer overall, with one-year returns of -8% against -0.8% for the overall market. The three-year return for the sector was 0.7%, compared with 6.8% for the overall market.

Suttatip Peerasub, an analyst with Yuanta Securities, said the stocks in the sector were still small in capitalisation when compared with other sectors, but a few had turned in good performances in the past year.

On the Shareholder Scorecard, BEC World, the operator of television Channel 3, posted a one-year return of 8.9%. GMM Grammy returned -6.7%. The country's two largest entertainment operators ranked second and third respectively, behind City Sports at 33.1%. Digital Onpa placed last among the seven firms at -66.2%For the first nine months of this year, Grammy reported a net profit of 144.8 million baht, down from 256.2 million a year earlier.

Apirak Kosayodhin, president and CEO of Grammy, said the company was optimistic for the future, with plans to produce six Thai films, partly with foreign partners, for release across Asia next year. In addition, its Imagine entertainment chain will be expanded nationwide to meet local demand in each region.

Mr Apirak acknowledged that in the past three years the firm had suffered losses in Taiwan and through its invest ment in Imagine. But it was offset mainly by advertising sales, he said. Media sales represent 30% of the company's total revenue, with music contributing 57% and "edutainment" and retailing the remainder.

At BEC World, nine-month net profit was off 17% to 332 million baht, largely due to a fall in advertising revenue.

Vice-president Chatchai Thiamtong said he was also uncertain about the advertising outlook next year as the impact from Sept 11 continued to be felt. The firm will reconsider new advertising rates by the end of this month. BEC postponed its new prime-time advertising rate, to 390,000 baht a minute from 360,000 baht, until next year. The rate had been planned to take effect in October.

The pay-television operator United Broadcasting Corp, with a one-year TSR of -47.4%, pared its nine-month net loss of 1.06 billion baht from 1.46 billion a year earlier. High programme costs, compounded by the weak baht, remain a problem, though subscriber growth is continuing at a modest rate.

_ Bamrung Amnatcharoenrit