Astro to offer VSS to staff to cut operating expenses

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KUALA LUMPUR (Dec 7): Astro Malaysia Holdings Bhd (Astro) is offering a voluntary exit option to all its employees in a bid to strengthen its market position in a media and entertainment industry that it says is facing "an unprecedented rate of disruption".

“Given the challenging overall economic landscape, Astro will be undertaking a Voluntary Separation Scheme (VSS) that will allow the group to further simplify the organisation, enhance operational efficiency and reduce annual operating expenses. The VSS is offered purely on a voluntary basis,” said Astro in a filing with Bursa Malaysia.

The group said it has put in place a transition programme that will provide the right support to employees who opt for the VSS, including coaching and skills upgrading training programmes.

The company also said it will put in place measures to ensure that customer experience will not be impacted by this exercise.

“In an increasingly borderless and digital world, competition is relentless. Astro continues to be proactive to reinvigorate the group in order to strengthen its position in the market and to remain relevant in the years ahead,”said Astro's CEO designate, Henry Tan.

It is understood that Astro is expected to save about 15% or around RM80 million in staff costs, per year, from the VSS programme. Astro’ staff costs stood at RM590 million for its financial year ended Jan 31, 2018 (FY18).

For the cumulative nine-month financial period ended Oct 31, 2018 (9MFY19), Astro’s net profit declined 41% to RM342.18 million against the RM583.44 million it recorded a year ago, while revenue was almost flat at RM4.11 billion compared with RM4.14 billion previously.  

The weaker results was mainly due to a drop in EBITDA (earnings before interest, tax, depreciation and amortization) on higher content costs from the FIFA World Cup, and as net finance costs climbed due to unfavourable forex movement arising from unhedged finance lease liabilities, as well as higher interest expenses for borrowings and finance lease liabilities.

Astro's shares fell two sen or 1.45% to close at RM1.36 on Friday, bringing it a market capitalisation of RM7.04 billion. The counter saw 6.86 million shares traded. Year-to-date, the stock has slumped 47.5%.