Thursday 28 Mar 2024
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KUALA LUMPUR (Sep 26): Astro Malaysia Holdings Bhd’s net profit for the second quarter ended July 31, 2018 (2QFY19) sank by 93.3% to RM16.6 million, or 0.32 sen per share, from RM246.3 million or 4.73 sen per share in the previous corresponding quarter.
 
Astro attributed the sharp fall in earnings to higher content costs due to the FIFA World Cup and higher cost of merchandise sales and net finance costs.
 
However, Henry Tan, the chief executive officer designate of Astro also said in a statement that the increase in content costs for the 2018 FIFA World Cup “has been budgeted”.
 
“In addition, financial results were affected by the reduced need to advertise during the tax holiday period from June 1 to Aug 31, 2018 and the depreciating ringgit.
 
“Nevertheless, we continue to have stable revenues across TV and radio with diversification from digital platforms, eCommerce, licensing income and theatrical sales,” Tan added.
 
Going forward, Tan expects the group’s second half performance to improve and that Astro will remain focused on key business drivers.
 
Quarterly revenue slipped lower by 0.23% to RM1.416 billion against RM1.42 billion in 2QFY18, mainly due to decrease in subscription and advertising revenue, offset by higher merchandise sales, licensing income and sales of programme broadcast rights.
 
“The decrease in subscription revenue was mainly due to lower package take-up and the decrease in advertising revenue was due to lower spending over festivities compared with the corresponding quarter.
 
“The increase in merchandise sales was due to increase in number of products sold, mainly driven by the tactical campaigns executed for the current quarter,” said Astro in the filing with Bursa.
 
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 amounting to about RM130.3 million, despite the lower earnings. The dividend will be paid on Oct 26 with the entitlement date on Oct 11. The dividend declared was lower than the dividend of 3 sen per share for 2QFY18.
 
It is worth noting that both the television and radio segments have seen a decline in revenue and earnings before interest, tax, depreciation and amortisation (EBITDA).
 
While the home-shopping segment saw an increase of RM23.2 million in revenue to RM93.5 million from RM70.3 million in the corresponding quarter a year ago, EBITDA recorded an unfavourable variance due to costs incurred for an additional channel and tactical campaign for the current quarter.
 
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 or 3.67 sen per share from RM442.2 million or 8.49 sen per share recorded in the corresponding period a year ago.
 
Astro’s revenue was also slightly lower at RM2.73 billion in the 1HFY19 from RM2.75 billion recorded in 1HFY18.
 
As of closing, Astro’s share price was unchanged at RM1.66 with 1.42 million shares traded, giving it a market capitalisation of RM8.66 billion. Over the last one year, the share price has seen a decline of about 37.6%. At current level, the media company is trading at a trailing P/E of 11.5 times with a dividend yield of about 5.4%.

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