This article first appeared in The Edge Financial Daily on November 26, 2019

KUALA LUMPUR: Despite lower revenue from both its publishing and printing, and travel businesses, Media Chinese International Ltd (MCIL) reported a higher net profit of RM13.35 million for the second financial quarter ended Sept 30, 2019 (2QFY20).

The increase in net profit was due to an income tax credit of RM252,000 versus an income tax expense of RM1.62 million last year, said MCIL in a filing with Bursa Malaysia yesterday.

MCIL’s net profit grew 6.3% to RM13.35 million for 2QFY20 from RM12.55 million a year ago. This resulted in higher earnings per share of 0.79 sen for 2QFY20 compared with 0.74 sen for 2QFY19.

However, quarterly revenue fell 14.9% to RM305.44 million from RM358.95 million for 2QFY19. During the current quarter, both the ringgit and the Canadian dollar weakened against the US dollar, resulting in lower revenue.

The group declared an interim dividend of 0.67 sen per share for the financial year ending March 31, 2020 (FY20), payable on Dec 30.

For the cumulative six months (1HFY20), its net profit, however, slid 9.8% to RM22.83 million from RM25.3 million a year ago, while revenue declined 13.8% to RM605.58 million from RM702.67 million.

Earnings were lower for the period due to lower revenue from both its publishing and printing, and travel businesses, as well as the depreciation of the ringgit and Canadian dollar against the greenback.

On prospects, the group expects 2HFY20 to be difficult and challenging due to the absence of advertising spending catalysts for the media sector in general.

“Unresolved trade tensions between the US and China and slower-than-expected global growth would further dampen the prolonged weak advertising spend[ing] in the media sector,” said MCIL, adding that business conditions in Hong Kong worsened over the last six months due to ongoing protests.