Astro 4Q net profit up 25.7% on higher subscription

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KUALA LUMPUR (Mar 30): Astro Malaysia Holdings Bhd, the country's largest pay television (TV) provider, saw its net profit jump 25.7% to RM139.97 million or 2.69 sen per share in the fourth financial quarter ended Jan 31, 2015 (4QFY15) from RM111.39 million or 2.14 sen per share a year ago, driven by higher subscription, and lower installation costs and lower marketing and distribution costs. 

In a filing with Bursa Malaysia today, Astro (fundamental: 1.1; valuation: 2.1) said its revenue for 4QFY15 rose 7% to RM1.35 billion from RM1.26 billion in 4QFY14, mainly due to an increase in subscription and other revenue of RM56.2 million and RM40.4 million respectively, offset by a decrease in advertising revenue of RM8.5 million.

The increase in subscription revenue is attributed to an increase in average revenue per user (ARPU) for pay-TV residential subscribers of RM3 (from RM96 to RM99) and an increase in number of pay-TV residential subscribers by 67,300 (from 3,442,300 to 3,509,600).

The increase in other revenue is due to an increase in merchandise sales of RM25.1 million from home-shopping business, licensing income of RM6.8 million, and sales of decoders of RM7.6 million. 

The group also declared a fourth interim dividend of 2.25 sen per share and a final dividend of 2 sen per share, bringing the full year dividend to 11 sen per share, a 22% increase over financial year ended Jan 31, 2014 (FY14) payout of 9 sen. 

For the whole of FY15, net profit rose 15.9% to RM519.37 million or 9.99 sen per share compared with RM447.95 million or 8.62 sen per share in FY14, while revenue grew 9.2% to RM5.23 billion from RM4.79 billion. 

In a statement, Astro chairman Tun Zaki Azmi said the group continues to execute on its business plans, by delivering growth in profits and cashflow; generating consistent returns for shareholders in terms of value and dividends. 

Its chief executive officer Datuk Rohana Rozhan said the group was able to generate growth in spite of a soft consumer market. 

“We see momentum in take-up of our products and services across our pay-TV, NJOI service, Astro on the Go (AOTG) and Over The Top (OTT) platforms,” she said.

“Our customer base grew by 547,000 to 4.4 million representing 63% penetration of total Malaysian TV households (FY14: 56%). ARPU rose as more customers subscribed to HD, PVR, Multiroom, Superpack and Valuepack,” she added.

Rohana said demand for its NJOI service continues to exceed its expectations, more than doubling its customer base and take-up of prepaid content.

“In a soft advertising market, we grew our TV and radio advertising expenditure shares to sustain our total advertising income at RM589 million in FY15. Astro’s growing TV viewership is attributed to the increasing appeal of local content,” she added.

She also said hit programmes such as Akademi Fantasia, Gegar Vaganza and Maharaja Lawak set new records with viewership numbers exceeding the 2 million mark.

The number of programmes that achieved viewership of over 1 million has tripled to 50 in FY15, she added.

Astro shares rose 9 sen or 2.9% to close at RM3.19 today, with a market capitalisation of RM16.125 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.)