Tuesday, August 28, 2007

Bangkok Post via 2 Bangkok: Is The Nation Going Broke?


Nation group to sell B1.6bn in non-core assets


Bangkok Post

Nation Multimedia Group Plc, the publisher of The Nation and Krungthep Turakij daily newspapers, expects to sell its non-core assets worth 1.6 billion baht in a bid to lower financial burdens and improve its balance sheet. Thanachai Santichaikul, the company's vice-chairman, said non-core assets up for sale included the 40-storey Nation Tower on Bang Na-Trat Highway Km 4.5, 30 rai of land next to the printing house on Bang Na-Trat Km 29, and some pieces of land in Chiang Mai, Hat Yai and Khon Kaen.

The company is now in talks with some prospective investors in the office building, which is worth 1.4 billion baht.

''I can't say when the deal will be finalised. It's not easy as some buyers like to complain that we are not the building's sole owner. Anyway, we will try to buy out the remaining 2-3% of the office space within this year,'' he told investors at a briefing yesterday at the Stock Exchange of Thailand.

The company spent 40 million baht during the first half of the year to buy office space from the other owners and plans to spend nearly 100 million baht to buy the rest by year's end.

Mr Thanachai said the company could repay half of its three-billion-baht debt if it sells the non-core assets. It now has an interest burden of almost 200 million baht per year.

''If a half of our debts are repaid, the interest burden will be reduced by half as well. Eventually, the balance sheet, which was in the red last year, will improve a lot,'' he said.

The non-core assets were acquired almost 20 years ago when the property market was booming. However, market conditions have changed and these assets were not utilised.

During the first half, the company posted a net loss of five million baht compared to losses of 41 million baht during the same period last year. Total revenues stood at 1.41 billion baht, down 4% year-on-year. Of the total, advertising represented 62%, circulation 30% and printing and media 8%. Ad revenues declined 6% to 842 million baht.

However, Mr Thanachai was confident that ad revenues in the second half would pick up as advertisers become more confident due to the upcoming election and improved economic outlook.

''I am still confident that we can turn a profit this year, compared to a 100 million baht loss last year,'' he said.

The company will have one or two new TV programmes and secure more printing jobs in the latter half of this year. The TV operation is no longer making a loss. In the first six months, ad revenues from its broadcasting rose 50% to 126.3 million baht.

Shares of NMG closed unchanged yesterday at 8.25 baht, in trade worth 165,000 baht.

The Nation is a poorly managed company with crappy products. It is no wonder that it is going broke.

When they stop selling off assets, and run out of money next year, I hope the shareholders will dump the management, eg Tulsie, Suthichai and Thepchai and bring in some new modern blood that will actually start producing news for the public.

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