KUALA LUMPUR (Sept 13):  Astro Malaysia Holdings Bhd shares rose 4.48% this morning after its net profit for the second quarter ended July 31, 2019 swelled to RM169.34 million, 10 times more than the RM16.58 million a year ago on the back of lower finance costs and higher earnings before interest, tax, depreciation and amortisation (EBITDA).

At 9.16am, Astro gained 6 sen to RM1.40 with 1.42 million shares traded.

The group said earnings per share rose to 3.24 sen from 0.32 sen last year.

Astro declared a second interim dividend of two sen a share, with an entitlement date of Sept 30 and payment on Oct 11, bringing total dividend payout for the first half of the year  to four sen from five sen a year ago.

Despite the increase in quarterly net profit, revenue slid 12.71% to RM1.24 billion from RM1.42 billion last year, on lower subscription revenue, licensing income, advertising revenue and merchandise sales.

Net profit for 1HFY20 jumped 80.62% y-o-y to RM345.53 million, from RM191.31 million in the corresponding period last year, translating into a higher cumulative EPS of 6.63 sen, from 3.67 sen last year.

Half-year revenue declined 9.41% to RM2.47 billion from RM2.73 billion.

Meanwhile, Affin Hwang Capital Research upgraded Astro to “Buy” at RM1.34 with a higher target price (TP) of RM1.62 (from RM1.50) and said Astro posted a strong 6MFY20 core net profit of RM394.7 million (+48% y-o-y), largely due to content costs  normalising post the 2018 FIFA World Cup as well as an overall reduction in marketing and administrative costs.

In a note today, the research house said the result came in above house and street expectations, accounting for 64% and 63% of respective FY20 forecasts.

“Given the stronger-than-expected results, we revise up our FY20-22E core EPS forecasts by 11-13%.

“Meanwhile, its TV subscription revenue decline appears to have been arrested and may sustain dividend yields at an attractive circa 6%.

“Upgrade Astro to Buy (from Hold) based on a higher DCF-derived TP of RM1.62,” it said.