Thursday 28 Mar 2024
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KUALA LUMPUR (Sept 27): Astro Malaysia Holdings Bhd shares fell 5.42% in early trade this morning after its net profit for the second quarter ended July 31, 2018 (2QFY19) sank by 93.3% to RM16.6 million, from RM246.3 million in a year ago due to the FIFA World Cup and higher cost of merchandise sales and net finance costs.

At 9.03am, Astro fell 9 sen to RM1.57 with 204,800 shares done.

Quarterly revenue slipped lower by 0.23% to RM1.416 billion against RM1.42 billion in 2QFY18.

The board also declared a second interim single-tier dividend of 2.5 sen per share in respect of the financial year ending Jan 31, 2019, payable on Oct 26.

For the first half of its financial year ending Jan 31, 2019 (1HFY19), the group’s net profit fell by 56.7% to RM191.3 million, from RM442.2 million in a previous year; while revenue came in lower at RM2.73 billion in the 1HFY19 from RM2.75 billion recorded in 1HFY18.

Meanwhile, CIMB IB Research downgraded Astro Malaysia Holdings Bhd to “Hold” at RM1.66 with a lower target price of RM1.75 (from RM2.70) and said Astro’s 1HFY1/19 core net profit missed expectations, at 34%/33% of house/consensus FY19 forecasts due to higher-than-expected FIFA World Cup cost in 2QFY19.

In a note today, the research house said Astro’s core net profit fell 48% year-on-year (y-o-y) in 1HFY19 due to higher finance cost related to new transponders and higher content cost (up 26% y-o-y).

“We cut our FY19-21F EPS by 16-20% to reflect higher content cost projections, lower adex growth and higher finance cost.

“Downgrade to Hold, with a lower RM1.75 TP, in view of a challenging outlook from a weakening ringgit, rising competition and a sluggish adex market.

“The stock offers an attractive FY19F yield of 6.3%. We see a potential M&A with a telco provider as a key upside risk for the stock,”it said.

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