Delta Electronics expects its net profit this year to hit a new high from the increase in purchase orders.
Director Anusorn Muttaraid said the company’s performance in the second half of this year would be better than the first half of Bt27.63 billion in revenue and Bt2.87 billion in net profit, thanks to the increase in orders, relief from the Covid-19 crisis and realised gains from the acquisition of Eltek Australia at the end of July.
He added that Eltek Australia can generate revenue from US$50 million (Bt1.56 billion) to $60 million per year.
“Therefore, we expect the company’s net profit this year to hit a new high from Bt2.95 billion in 2019 as the number of purchasing orders is increasing gradually, especially from data centre infrastructure solutions and businesses related to electric vehicles,” he said.
“Also, the company gained positive sentiment from a change in technologies to support the 5G network, and the weakening baht.”
Anusorn said Delta does not have any plans to acquire more businesses as it has to focus on management to cope with the Covid-19 situation first.
“We believe Delta’s financial status is still strong as the company’s cash flow was around Bt9 billion, so we have confidence it can support more investment in the future,” he added.
By The Washington Post · Steven Zeitchik · NATIONAL, BUSINESS, ENTERTAINMENT For months it’s been clear that Disney, the country’s most prominent entertainment company, was facing a financial disaster unlike any in its history.
On Tuesday, it became evident just how deep the carnage has gone.
The company revealed that as a result of the coronavirus pandemic it took in just $11.8 billion in revenue and $1 billion in operating income in the three-month period that ended in June, the height of lockdowns in the country. The numbers are a significant drop from the same period a year ago, when it generated $20.25 billion in revenue and $4 billion in operating income, among the worst slides of the modern era.
The earnings report for the fiscal third-quarter gave numeric form to what had been the sense of many in the entertainment and financial communities: Disney, once the high-flying giant of Hollywood, has been brought low by the virus, its creations often unable to be produced or consumed.
To try to get some of that revenue back, the company said it would finally release “Mulan,” the action-adventure reboot that has been delayed several times since its March opening.
But the company said it would employ a patchwork approach to do so. The live-action film will be made available on Disney Plus in the United States beginning Sept. 4 – at a cost of $29.99. The same pattern will follow in Canada, Australia and some of Western Europe. Customers will be given indefinite access to the film in exchange for the fee, but only as long as they subscribe to Disney Plus.
In countries where Disney Plus is not offered or theaters are widely open, meanwhile, the movie will go to theaters. This will almost certainly include China, where the film is expected to generate a large percentage of its box office.
In moving the film to a digital platform in the United States, Disney is acknowledging that covid-19 surges make unlikely the quick resumption of normal business – a belief embraced by other studios, which have either substantially postponed their movies to 2021 or pursued a more circumscribed American release plan.
The “Mulan” announcement also finally resolves what had been one of the great ambiguities of corona-era Hollywood.
Where many movies – including those from Disney – had either been postponed to the end of 2020 or moved quickly to digital, “Mulan” had remained in a kind of purgatory, postponed several times as the studio sought to bring it to theaters around the world. With the move, Disney has decided on a solution, if a hybrid one. It will bring out the film in theaters in some countries but not others, and it is taking it to a subscription streaming platform but still charging a supersized theater price.
Disney’s $11.78 billion in revenue in the quarter was lower than the $12.37 billion many analysts expected, though earnings-per-share of 8 cents was above the 64-cent loss many forecast.
The company saw major revenue drops in several business units compared to 2019.
Theme parks saw a plummet from $6.58 billion to $983 million, a plunge of 85%. No American or European park was open in the quarter, while parks in Shanghai and Hong Kong reopened only midway during the period.
Equally concerning for Disney have been the few rays of theme-park light since the quarter ended. The company reopened Disney World in Florida last month to begin rebuilding its revenue pipeline. But chief financial officer Christine McCarthy acknowledged the move has not panned out as hoped.
“The upside we’re seeing is less than we originally expected given the surge of covid-19 in Florida,” she told analysts.
Disney chief executive Bob Chapek said that the park has experienced a “higher-than-expected level of cancellations” as people decide not to travel to Orlando, Fla., because of the virus.
The company’s studio unit, which did not release any major new movies to theaters, saw revenue drop from $3.8 billion during the quarter last year to $1.74 billion this year, a slide of 55% .
Its TV unit, however, was able to hold the line, as revenue stayed mostly flat at $6.6 billion compared to $6.7 billion last year, with many advertisers already paid up through the quarter. Harsher effects could be felt in the months ahead with the lack of new shows and a slowdown in the ad-sales market.
One of the rare bright spots in the quarter was Disney Plus, the streaming service the company launched in November. Disney executives said on a conference call it now has 60.5 million subscribers worldwide after moving a number of previously theatrical movies to the service, most notably “Hamilton” on July 4 weekend. The service is growing faster than many analysts expected, reaching 54.5 million in May and adding six million subscribers since.
The direct-to-consumer division, of which Plus is a part, saw revenue tick up slightly, by 2 percent, from $3.88 billion in the same quarter in 2019 to $3.97 billion in 2020.
Still, with investment costs high, the company does not expect profitability from Disney Plus for several more years, and the direct-to-consumer division saw a loss of $706 million in the quarter, 26% more than last year.
“Mulan” is one way that challenge might be remedied: a product financed by another division that could bring revenue to the startup service.
Disney executives acknowledged how uncommon the tack was but called it a necessary exception at this moment.
The pandemic has “forced us to consider different approaches and look for new opportunities,” Chapek said in an analyst call.
The move, though, is unusual even in the streaming world, which has typically offered an all-you-can-eat plan to subscribers in which all new content is available under the monthly fee. According to the “Mulan” plan, however, a customer must subscribe to the service just for the right to pay for the movie.
By placing the movie exclusively on the service instead of making it available through cable or satellite providers, the company is gambling that the benefit of the new Disney Plus subscribers it attracts will outweigh the lost revenue from people who are not subscribers.
It also is making a financial calculation: by putting the movie exclusively on its own platform, Disney is avoiding handing over as much as 20% of sales revenue to cable operators, as studios typically do with distributors.
Later in the call, Chapek seemed poised to rule out the possibility this could be a trial balloon but then stopped short of that position.
“We’re looking at Mulan as a one-off as opposed to trying to say there’s some new business-windowing model,” he said. But then he added, “That said, we find it very interesting to take a new offering to consumers at a $29.99 price point and learn from it.”
The company’s stock price has not dropped during the pandemic, as bargain-hunters and long-term investors have sent the price up more than 20% since lockdowns began in mid-March. On Tuesday, investors, apparently reacting to the digital “Mulan” announcement, sent the share price up 4% in after-hours trading.
Both Chapek and executive chairman Bob Iger face significant headwinds in the months ahead. Any hope of a Disney comeback in the last six months of 2020 will turn on several factors related to the pandemic: Whether sports, particularly the NBA and Major League Baseball, can continue uninterrupted and bring much-needed revenue to ESPN; whether prime-time shows can begin shooting to ensure a reasonable start to the broadcast-network fall season; and whether enough theaters can reopen in the United States and around the world to begin collecting box office revenue.
While Mulan will not be in U.S. theaters, Disney has high hopes for November, when it has Pixar’s “Soul” and Marvel’s “Black Widow” scheduled to open.
Disneyland will also need to reopen if the company wishes to restore its theme parks to its past glory; the park remains closed under California orders. The parks are key to Disney’s financial fortunes: with $6.76 billion in operating income last fiscal year, the division was the most profitable of any unit besides television.
Energy firm Scan Inter (SCN) should complete development of its 220-megawatt solar energy plant in Minbu, Myanmar ahead of the original deadline of late next year, said chief executive officer Littee Kitpipit.
Green Earth Power (Thailand) or GEP, in which SCN holds a 40 per cent stake, has revised the plan by developing phases 2, 3 and 4 at the same time.
Under phase 2, generation capacity will be 50 megawatts, increasing by 50MW and 70MW in phases 3 and 4.
GEP completed phase 1 development with 50MW capacity in September last year. The company estimates the plant will generate revenue of Bt2 billion per year once the full 220MW capacity is reached.
GEP (Thailand) owns 100 per cent of GEP (Myanmar), which has been granted a build-operate-transfer concession for the plant by Myanmar.
The State Railway of Thailand (SRT) plans to launch an asset-management subsidiary next year in line with a Cabinet resolution last month, SRT governor Nirut Maneephan said.
The SRT will register the subsidiary as a state enterprise this year with registered capital of Bt200 million. It will also appoint the subsidiary’s board and begin the selection process for its chief executive officer.
The subsidiary will initially be run by SRT personnel before recruiting its own staff of about 100 employees within three years. It will be tasked with managing the SRT’s off-track landholdings of 38,469 rai, worth a total Bt300 billion.
The subsidiary’s main revenue will come from the 15,270 existing land rental contracts and from leasing land where rental contracts have expired.
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Destination Capital launches DESCAP1 to invest in hotels in Thailand
CorporateOct 16. 2020From left: Destination Capital CEO James A Kaplan, senior vice-president Supakit Eimsamank, and Thitiphat Thaveesin.
By The Nation
Destination Capital, a Bangkok-based private equity real estate investment and asset management company, on Friday announced the launch of its DESCAP 1 Private Equity Trust, which will acquire hotels in Thailand targeting investor returns of up to 15 per cent per year.
KTB Securities (Thailand) will act as settlor and trust manager and MFC Asset Management as the trustee.
The trust aims to raise Bt2.5 billion by offering an alternative asset class for investor portfolios. It will acquire freehold four-star hotels of 150-250 rooms in Bangkok, Pattaya, Hua Hin and Phuket, which are expected to rebound the quickest after Covid-19.
The investment strategy is to acquire urban and resort hotels and then renovate, reposition, and rebrand them to increase value of the properties in order to generate annual returns of 15 per cent with a 5-7 year holding period.
“The Covid-19 pandemic has significantly affected travel and tourism to Thailand, yet it also created a ‘once in lifetime’ investment opportunity in prime hotels and resorts located in well-known global destinations through DESCAP1 Private Equity Trust. It is also a way to support and rejuvenate Thai travel and tourism industry,” said Thitiphat Thaveesin, KTB Securities’ executive vice president, Corporate Finance Solutions & REIT Dept.
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Warren prods Disney CEO on buybacks, pay before 28,000 cuts
CorporateOct 15. 2020Bob Iger, chief executive officer of Walt Disney Co., during a Bloomberg Television interview at Disneyland in Shanghai on June 16, 2017. MUST CREDIT: Bloomberg photo by Qilai Shen.
By Syndication Washington Post, Bloomberg · Anders Melin · BUSINESS, US-GLOBAL-MARKETS
Sen. Elizabeth Warren criticized Walt Disney Co. for laying off thousands of workers as a result of the pandemic, saying its spending on share buybacks and executive pay enriched bosses and investors but eroded its ability to weather a downturn.
“It appears that — prior to, and during the pandemic — Disney took good care of its top executives and shareholders — and now is hanging its front-line workers out to dry,” Warren wrote Tuesday in a letter to Executive Chairman Bob Iger and Chief Executive Officer Bob Chapek.
In the letter, Warren asked about the monthly cost of wages for the affected employees, whether Disney will cover their health-care premiums, and several questions about the company’s executive pay. The Democratic senator from Massachusetts wrote that she expects an answer by Oct. 27.
Disney shares were down 1% to $127.69 at 10:48 a.m. in New York. The stock is down 12% for the year.
Disney said last month that it would terminate 28,000 workers in its theme parks and cruise-line businesses, which have plunged as a result of the coronavirus pandemic. The company said at the time it would offer some benefits, including 90 days of job-placement services. Two-thirds of those laid off were employed part-time. The company’s domestic parks employed more than 100,000 people before the crisis, not counting the cruise line and other divisions.
In her letter, Warren noted that Disney had dismissed more workers in Florida than in California, despite the company attributing the cuts in part to California’s refusal to let Disneyland reopen.
Warren said Disney spent $47.9 billion on share buybacks from 2009 through 2018, $5.4 billion on dividends in 2018 and 2019 alone, and hundreds of millions of dollars on executive compensation.
Iger, for years one of America’s top-paid executives, has received repeated criticism over his compensation. Almost half of the company’s investors rejected its executive-pay practices in advisory votes in 2018 and 2019, after Iger secured a new contract entitling him to more than $100 million in stock if Disney shares did well enough over the coming years.
And Abigail Disney, a granddaughter of the company’s co-founder Roy Disney, drew attention to Iger’s pay by saying in a 2019 CNBC interview that “Jesus Christ himself isn’t worth 500 times his median worker’s pay.” Months earlier, Disney had disclosed that the ratio between Iger’s $65.7 million pay package and $46,127 for the firm’s median employee was 1,424-to-1.
Representatives for Disney didn’t respond to an email seeking comment.
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Tencent may increase stake in Universal Music
CorporateOct 15. 2020The Tencent Holdings building stands in the Nanshan district of Shenzhen, China. MUST CREDIT: Bloomberg photo by Brent Lewin
By Syndication Washington Post, Bloomberg · Helene Fouquet, Manuel Baigorri · BUSINESS
Tencent Holdings is planning to increase its stake in Universal Music Group by a further 10% before the option expires in January, according to people familiar with the matter.
The Chinese technology company last year led a consortium that purchased 10% of the world’s biggest music company from French media company Vivendi. That deal valued Universal Music at 30 billion euros ($35.2 billion) and Tencent and its partners have the option to increase their stake to as much as 20% at the same valuation until Jan. 15, 2021.
Tencent is likely to exercise this option, three people said, asking not to be identified as the deliberations are private. It could make the move before year’s end, one person said.
Shares of Vivendi rose as much as 2.2% in early trading in Paris. Shares of Tencent listed in Hong Kong rose as much as 2.2% in early trading Wednesday, reaching a record of HK$569.5 ($74.48) each. Tencent’s American Depositary Receipts achieved a record closing price of $74.04 in Tuesday’s U.S. session, after Apple announced that its game “League of Legends: Wild Rift” would be coming to iPhone 12.
It isn’t clear whether Tencent will be joined by the original consortium members, the identities of which haven’t been made public, the people said. Hillhouse Capital and Singapore sovereign wealth fund GIC were among potential investors that Tencent approached, Bloomberg News reported last year.
Deliberations are ongoing, and Tencent could still opt not to increase its stake in Universal Music, one of the people said. Representatives for Tencent and Vivendi declined to comment.
By increasing its stake, Tencent would seek to diversify from gaming and China, where it has been busy with deals this year. It’s helped orchestrate the combination of Huya and DouYu International Holdings, creating a Chinese game-streaming giant with a market value of more than $11 billion. It has also proposed to take private Chinese gaming firm Leyou Technologies Holdings.
Universal Music has been boosted by a surge in streaming that has dragged the industry out of a decade-long slump. The music business has helped Vivendi hold up through the pandemic lockdown, limiting the blow from a drop in advertising and publishing revenue.
A deal by Tencent will counter a recent venture by rival NetEase, which in August struck a deal to license songs from Universal Music for the first time. China’s antitrust authorities had investigated Tencent’s dealings with the world’s three biggest record labels, but the probe was suspended this year, people familiar with the matter said in February.
An initial public offering of Universal Music is planned by early 2023, according to a Vivendi statement in February. An entry onto the stock market could give the music group more financial clout to compete with rivals Warner Music Group and Sony Music Entertainment. Tencent also plans to take a minority stake in Universal Music’s Chinese subsidiary.
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VW crushed the iconic beetle to make room for this small SUV
CorporateOct 15. 2020A Volkswagen on the steering wheel of a VW ID.3 electric automobile, the first of around 22 million vehicles to be produced and delivered worldwide by 2028, at the automaker’s factory in Dresden, Germany, on Sept. 11, 2020. MUST CREDIT: Bloomberg photo by Krisztian Bocsi.
By Syndication Washington Post, Bloomberg · Christoph Rauwald, Craig Trudell · BUSINESS, WORLD, US-GLOBAL-MARKETS, EUROPE
Automakers are so eager to replace less-lucrative cars with higher-margin SUVs that they’re willing to scrap iconic nameplates along the way.
Volkswagen’s newest North American model, the Taos, is perhaps the starkest example of this yet. The German automaker made room to manufacture the compact sport utility vehicle in its Mexican assembly plant by ceasing production of the Beetle, one of the most influential cars of the 20th century.
For automotive product planners, the decision making is simple. The ebb toward crossovers and away from sedans has been relentless, helping put SUVs and trucks on course to seize more than 70% of the U.S. market this year. Crossovers also are a better bang for automakers’ buck — consumers are willing to pay up for the higher ride height and roomier interior of models that aren’t substantially costlier to develop or build compared with sedans.
“We think the trend is going to continue,” Duncan Movassaghi, executive vice president of sales and marketing for VW’s U.S. unit, told reporters during a briefing on the Taos. The automaker sees Americans buying almost 10 million SUVs a year by the end of the decade.
VW rose as much as 0.8% in early trading in Frankfurt on Wednesday.
The German manufacturer is far from alone in being cold-blooded about its cars.
Ford is abandoning sedans in North America, killing off the likes of the Taurus, once the top-selling car in the country. General Motors Co. has ceased several nameplates including the Chevrolet Impala, a model line with more than 60 years of lineage. Fiat Chrysler Automobiles NV also gave up trying to get Americans to buy the 500, the diminutive car used to bring its eponymous Italian brand back to the U.S. in 2011.
While those companies are making space in factories and showrooms for SUVs some consumers will recognize — the Ford Bronco, Chevrolet Blazer and Jeep Grand Wagoneer — VW eschewed the Beetle for an entirely new nameplate. The Taos is named after a town of less than 6,000 people in the northern New Mexico desert.
By adding the Taos and the all-electric ID.4 to the Tiguan, VW will have three models in the compact SUV segment, similar to how Subaru has the Outback, Forester and Crosstrek, and Jeep has the Wrangler, Cherokee and Compass.
Chief Executive Officer Herbert Diess is counting on an expanded SUV lineup to help VW put an end to losses that predated the German carmaker’s disastrous diesel-emissions scandal. He told shareholders last month the brand was close to breaking even in North America before the Covid-19 pandemic hit. The manufacturer generates the vast majority of its profits in China and Europe and has struggled for years to make money in the U.S.
The Taos will be available in the second quarter of next year. It will be about 9 inches (23 centimeters) shorter than the Tiguan and priced below that model, which starts at $25,245.
Krungsri (Bank of Ayudhya) has joined with Lao Development Bank to launch Krungsri-LDB Global Transfer, a service for real-time money transfers between Thailand and Laos.
Offered through Krungri Biz Online (KBOL), the service is designed to enable individuals and small businesses to better respond to business and customer needs, conveniently and safely.
Krungsri-LDB Global Transfer connects the Application Programming Interface (API) of the two banks for the first time, to offer seamless and easy international remittance transactions.
The service will support money transfer to recipients’ accounts based on the currency being transferred, without using exchange rates. Baht and US dollars will be supported in the first phase, followed by other currencies in the future.
Customers can use the service free of charge until the end of 2020.
Thai Airways International (THAI) wants to boost its non-flight income from 15 per cent to 50 per cent of total revenue in the next five years, THAI Catering managing director Varangkana Luerojvong told Krungthep Turakit newspaper.
Varangkana said the non-flight businesses – catering, repair and cargo services – have adjusted their strategies in order to raise revenue.
She said the catering business aims to boost its annual revenue from Bt10 billion to Bt20 billion in the next five years.
The repair and cargo businesses are thought to have set similar targets – to double their revenue from the current Bt15 billion-Bt20 billion and Bt20 billion, respectively.
Last year the airline’s catering business posted revenue of Bt8.5 billion.
THAI Catering now aims to expand its franchises for all product brands to a total 700 outlets, aiming to boost its revenue by at least Bt3.5 billion next year.
THAI entered rehabilitation restructuring under bankruptcy court supervision on September 14. The airline will submit its rehab plan for the court’s consideration in the fourth quarter of this year.