Kuala Lumpur (May 19): Star Publications (M) Bhd's net profit jumps 63% to RM26.55 million, or 3.60 sen a share, for the first quarter ended March 31, 2015 against RM16.26 million or 2.20sen a share a year ago on higher contribution from event, exhibition, interior and thematic segment.

However, Star Publication’s (fundamental: 2.5; valuation: 1.4) quarterly revenue went up marginally by barely 3% to RM217.43 million from RM211.12 million last year.

In a filing to the Bursa Malaysia, Star said that revenue for the event, exhibition, interior and thematic segment — consists of Cityneon and I.Star Ideas Factory — increased to RM38.09 million from RM30.92 million in 1QFY14 mainly due to higher exhibition and thematic segment revenue recognised by Cityneon in the current quarter under review.

“Higher direct cost and lower profit margin especially by Cityneon has resulted in a loss before tax amounting to RM5.29 million in this segment,” it said.

Meanwhile, its print and digital revenue contracted by 0.3% because of lower print circulation and digital revenue. Overall advertising expenditure has been affected by poor consumer sentiments as a result of the rising cost of living and the impending implementation of goods and services tax (GST) in April.

“Profit before tax for this segment increased by 78.2% as compared to last corresponding quarter due to cost reductions in direct cost and the impact of Voluntary Separation Scheme (VSS) expenses of RM9.58 million in 1Q 2014,” it said in the filing.

Revenue in radio broadcasting division dropped by 2.3% or RM0.28 million amidst the challenging market environment. Advertisers were generally more cautious and were holding back on their spending.

However, it said, the segment recorded a small profit before tax of RM0.77 million as there was no amortisation cost on Capital FM’s radio licence in 1Q 2015. Full impairment loss on Capital FM’s radio licence was recognised in 4Q 2014.

The revenue for the television channel also improved marginally to RM2.85 million as compared to RM2.72 million last year. However, higher direct cost caused this segment to suffer a loss before tax of RM1.60 million as compared to RM1.32 million in 1Q 2014.

Moving forward, the media group is looking at expanding to Asean markets on the back of moderate economic growth and cautious market sentiment after the implementation of GST.

In addition, the Group will be launching its Audience Interest Marketing (AIM) service, the first by a Malaysian media company in June. This will connect advertisers directly with their target market, tailoring online advertising to match the preferences of consumers of media content.

In the events and exhibition business segment, the media group will also look to add more exhibitions, given the success of I.Star Ideas Factory, which organises the successful Perfect Livin’ exhibition. Cityneon will also continue to seek out more opportunities both locally and in other emerging markets, it said.

Star share price closed one sen or 0.42% higher at RM2.41, giving it a market capitalisation of RM1.77 billion.

(Note: The Edge Research's fundamental score reflects a company’s profitability and balance sheet strength, calculated based on historical numbers. The valuation score determines if a stock is attractively valued or not, also based on historical numbers. A score of 3 suggests strong fundamentals and attractive valuations.)