BTS sees mass transit driving FY19 revenue by 200%

BTS sees mass transit driving FY19 revenue by 200%

A BTS train moves past a shopping complex area. KRIT PROMSAKA NA SAKOLNAKORN
A BTS train moves past a shopping complex area. KRIT PROMSAKA NA SAKOLNAKORN

SET-listed BTS Group Holdings Plc expects its operating revenue to surge by 200% in fiscal 2019, starting from April 1 this year, largely driven by the mass transit business.

Kavin Kanjanapas, the company's chief executive, said this year will be important for the company as its developments will be a catalyst for a multi-year period of unprecedented growth.

The growth will not only be driven by the company's mass transit business, but also its media and property arms that are expected to greatly benefit from the roll-out of new mass transit lines BTS recently won.

The company estimates its revenue in fiscal 2018 ending March 31 this year was 10-13 billion baht, up from 8.6 billion in fiscal 2017.

Mr Kavin said BTS's mass transit business is expected to recognise several channels of growth including 20-25 billion baht worth of expected revenue from the construction of the Pink (Min Buri-Khae Rai) and Yellow Lines (Lat Phrao-Samrong). The two lines, operated by BTS and developed together with Sino-Thai Engineering & Construction Plc and Ratchaburi Electricity Generating Holding Plc, were awarded the concessions for both lines in June 2017.

Additional income of 7-9 billion baht is expected from the procurement of trains for the Green Line extensions and electrical and mechanical system installation services for the Mo Chit-Khu Khot extensions. BTS also expects to recognise interest income of 600-700 million baht related to the procurement of trains for the Green Line's extensions and the construction of Pink Line and Yellow Line.

Core network ridership is expected to grow by 4-5% from the previous year. Within the first 11 months of the company's fiscal 2018, which ends March 31 this year, the BTS network served 220.3 million passengers or 743,027 passengers per weekday. Organic growth on the network will be further boosted by the official launch of the entirety of the Green Line's 12.6-kilometre southern extension from Bearing to Samut Prakan.

The nine stations of the southern extension are expected to be officially opened in December 2018 and will significantly supplement revenue to BTS and feed ridership into its network in the last quarter of fiscal 2019. Ridership growth on the core network continues to be fuelled by property development along mass transit stations, worsening road congestion and urbanisation in Greater Bangkok and adjacent provinces. Total operation and maintenance revenue is targeted to soar by 30% from the previous year largely from the full commencement of the Green Line southern extension.

BTS's media business under VGI Global Media Plc is also expected to continue to aggressively expand its out-of-home media presence.

VGI is also poised to benefit from the economic recovery and emerging synergies with Rabbit Group through online-to-offline media.

Following a slew of acquisitions, VGI is now a comprehensive media solutions provider that is better able to respond to the contemporary lifestyles of consumers and offer more targeted advertising on behalf of its clients. Media revenue in fiscal 2019 is targeted to reach 4.4-4.6 billion baht.

This fiscal year the majority of BTS's property business was transferred to an associate company, U City Plc. U City is the designated property development vehicle for BTS Group. U City has undergone restructuring and significant expansion following acquisitions of a hotel business in Europe and office buildings in the UK. U City expects to record revenues of 6-7 billion baht this year.

BTS's total expected capital expenditure is estimated at 27-34 billion baht this year. More than 90% of the amount or 26-32 billion baht will be earmarked for investments in the mass transit lines.

The remaining amounts of 1.1 billion baht and 400 million baht will go to support growth in the media and property businesses, respectively.

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