On 30th November 2024, BTS Group Holdings Public Company Limited (SET: BTS), represented by Mr. Daniel Ross, Chief Investment Officer and Head of Sustainability, participated in the seminar “Decoding Outstanding ESG Stocks…Strong Profit, Beating the Market!” hosted by Kaohoon newspaper. The event took place at the Professor Sangvian Indaravijaya Auditorium at the Stock Exchange of Thailand and featured other notable listed companies, including Gulf Energy Development Public Company Limited and Bangkok Chain Hospital Public Company Limited.
Mr. Daniel Ross, Chief Investment Officer and Head of Sustainability of BTS Group, highlighted that BTS Group, in his opinion, is a ‘value stock’ with the share price of THB 5.5 per share, which is significantly below its peak of THB 14.2 per share achieved in December 2019. “Although the losses from the recently opened Pink and Yellow Line weigh down profitability to the amount of about THB 1.8bn per year, these projects are still cash flow positive due to the annual subsidy payments from the Government of THB 4.8bn” said Mr. Daniel. “The losses will decline with increasing ridership (and lower debt) but if the Government is able to achieve its intention to buy back the concessions and implement a THB 20 flat fare by September 2025, we will see a more immediate return to profit”
At the same time, BTS Group is fully supportive of the Government’s THB 20 flat fare policy, which will increase affordability of public transport, accelerate the road-to-rail modal shift needed to reduce Thailand’s Greenhouse Gas emissions, as well as reduce the traffic and PM pollution. We are ready to discuss with the Government when they have concluded their evaluation. In the meantime, BTS Group Cash flow from Operations for FY 2023/24 is forecast at over THB 25bn, aided by the imminent repayment of outstanding debt by the Bangkok Metropolitan Administration (BMA) within 22 January 2025 in accordance with the Supreme Administrative Court ruling.
BTS Group has also recently concluded a restructuring which included capital increases at BTS Group and VGI PCL which helps strengthen the capital base, reduce debt at BTS Group and prepares VGI for future investments (such as virtual bank and beyond). The restructuring also saw increases in the Group’s shareholdings in Rabbit Holdings PCL and ROCTEC PCL which will not lead to a change in strategy but should work to support their future growth. Consolidation of their performances will increase BTS Group revenue, with MATCH business revenue contribution expected to increase to around 20-30% of BTS Group revenue in the next fiscal year.
A key focus for the Group now is its debt reduction plan, which has made significant progress already. At the start of the year BTS Group had THB 166bn net debt and an Adjusted Net D/E of 2.36, which is expected to reduce to 1.34 after capital increase and debt repayment of BMA. Currently, VGI and ROCTEC are debt-free, with Rabbit Holdings following in the same direction with the planned divestment value of THB 16bn in assets over the next couple of years.
Mr. Daniel Ross highlighted that BTS Group has consistently been recognized as the most sustainable transportation company in the world by the Dow Jones Sustainability Index. Furthermore, the company recently announced its commitment to achieving Net Zero by 2025, aligned with the Science Based Targets Initiative (SBTi), which was approved by the Board of Directors in May 2024.
