This article first appeared in The Edge Financial Daily on November 21, 2017

KUALA LUMPUR: A divestment gain of RM206.86 million boosted Star Media Group Bhd’s net profit to RM230.29 million for the third quarter ended Sept 30, 2017 (3QFY17) — the highest-ever quarterly earnings.

Excluding the divestment gain, the group posted a pre-tax profit (PBT) of RM13.6 million for 3QFY17 considering its accumulated PBT came in at RM227.47 million for the nine months ended Sept 30 (9MFY17) versus RM6.99 million in the six-month period ended June 30.

Quarterly revenue, however, dropped 14.8% to RM130.88 million compared with RM153.62 million a year ago. Earnings per share for the quarter ballooned to 31.21 sen, from 1.53 sen previously, according to a filing with Bursa Malaysia.

For 9MFY17, the group’s net profit leapt to RM245.44 million from RM70.47 million in the previous corresponding period. Cumulative revenue, meanwhile, stood at RM391.39 million, down 18% from RM477.06 million in 9MFY16.

The revenue slide, it said, was mostly due to the lower revenue contribution from its print segment.

The media group said its television channel, Li TV, and event and exhibition business segments recorded narrowed losses before tax, but revenue contracted across both segments.

As for its print and digital business segment, it explained that revenue declined 16.1% in line with the fall in advertising revenue resulted from weak market sentiments.

Meanwhile, its radio broadcasting segment returned to profit, thanks to cost savings arising from the disposal of Red FM and Capital FM stations in 2016. The segment also showed a slight increase in revenue by 4.3%, it said.

On prospects, Star Media said it is planning to cease business operations of the Li TV group to mitigate further losses, while actively searching for new investment opportunities in the digital sector and in non-core businesses.

“The company does not expect a turnaround from Li TV. In view thereof, the board has decided to cease the business operations of [the] Li TV group to mitigate further losses,” it explained in the filing.

Meanwhile, the media group shared that it will continue defending its print segment and pursue aggressive expansion for its digital businesses, such as building library content of its video on-demand service, dimsum.my, to secure a higher subscriber base.

“[We are] also cognisant of investment opportunities that may arise in other industries and will also consider investments in non-core businesses which have the potential to enhance the performance of the group,” it added.