KUALA LUMPUR (March 27): Shares of Astro Malaysia Holdings Bhd are currently trading 1.96% or three sen lower at RM1.50 after the pay-TV behemoth yesterday said its quarterly net profit fell 35%.

Net profit for the fourth financial quarter ended Jan 31, 2019 (4QFY19) fell 34.9% to RM118.4 million from RM181.79 million a year ago, due to higher net finance costs and a decrease in earnings before interest, tax, depreciation and amortisation (Ebitda).

For FY19, the group's net profit came in 39.9% lower at RM462.92 million from RM770.64 million the previous year, on higher sports content cost arising from the FIFA World Cup, one-off employee separation scheme costs and forex losses on finance lease liabilities. Even after stripping out one-off employee separation scheme costs and forex losses, Astro said net profit would have been RM563 million, down 17% year-on-year.

Nevertheless the pay-TV service provider declared a fourth interim dividend of 1.5 sen per share for the full financial year ended Jan 31, 2019 (FY19), payable on April 25.

Even though the group's earnings came in within expectations, analysts have had mixed reactions, with some downgrading the stock.

Affin Hwang Capital has downgraded the stock to hold from buy given limited upside, with a lower target price of RM1.60 (from RM1.77).

RHB Research has maintained its buy call, but also reduced its target price to RM1.97 (from RM2.02).

Meanwhile, MIDF Amanah Investment Bank Bhd Research maintains its neutral call, with a higher target price of RM1.50 (from RM1.32), commenting that while the overall advertising expenditure environment remains challenging, it is comforted by Astro's ability to uphold its earnings momentum given the continued recovery in advertising income post-GE14 and a more politically stable domestic front.

"At this juncture, we anticipate that the attractive dividend yield would help to partially buffer for the anticipated near-term weakness in share price performance," MIDF said in a note today.