This article first appeared in The Edge Financial Daily on October 18, 2018

PETALING JAYA: Media Prima Bhd yesterday cautioned market uncertainties could weigh on its financial performance, but is hopeful a pickup in advertising expenditure (adex) would provide some reprieve.

“For 2018’s performance, there is still a bit of uncertainty which is [impacting] us but we are hopeful that the adex will pick up,” group managing director Datuk Kamal Khalid told a media conference yesterday.

Media Prima posted a net profit of RM32 million in the second financial quarter ended June 30, 2018 against a net loss of RM133 million a year ago, mainly due to a disposal gain on an associate and higher revenue.

The integrated media group has been under severe pressure as its losses mounted. It reported a whopping net loss of RM650.61 million for the financial year ended Dec 31, 2017 (FY17), and RM59.2 million the year before.

Kamal expects Budget 2019 on Nov 2 to provide further clarity on government policies which could impact market conditions and investor sentiments.

“I believe there are a lot of people awaiting the announcement of Budget 2019, and I hope that the policies that will be announced will be those that not only help the government to solve their debt problems but also provide opportunity for growth. Should the economy improve, we as a media company would be one of the beneficiaries.

“I also hope the tax system would be enhanced as there is still some confusion even though the GST (goods and services tax) has been abolished and SST (sales and services tax) has been introduced. I hope that whatever issues faced by businesses would be reviewed and would not cause further burden to them.”

Earlier, the group launched Ripple — previously Media Prima Radio Networks. Kamal said it was not merely a name change for the radio broadcast segment, but a strategic move towards its aim of becoming a leading digital first content and commerce company.

Previously a broadcast segment, Kamal said Ripple will now aim to engage with audiences through content, talents, experiences and platforms. This would be achieved through various synergistic initiatives of its four existing radio stations, a podcast platform and e-commerce brand.

“Ripple will leverage on the strength of its brands and massive reach to create new revenue opportunities and target new consumers,” Kamal remarked, adding the new direction would also provide a more holistic solution for advertisers who want to connect with specific audiences across different platforms.

He said Media Prima aims to increase digital revenue contribution to 8% by year end, from a 3% target in FY17. Revenue from the segment amounted to RM41 million last year and is projected to double in FY18 on the back of an increase in digital initiatives.

For the first six months ended June 30, digital revenue doubled to RM44.8 million against RM14.9 million in the comparative period last year, driven by higher digital advertising revenue across all platforms.