KUALA LUMPUR (Sept 14): Astro Malaysia Holdings Bhd's second quarter ended July 31, 2016 (2QFY17) net profit dipped 8.6% to RM125.4 million or 2.41 sen per share compared to RM137.2 million or 2.64 sen per share in 2QFY16.

The decrease in net profit is mainly a result of a fall in earnings before interest, taxes, depreciation and amortisation (EBITDA) of RM63.5 million that was offset by a drop in depreciation of property, plant and equipment by RM34.6 million and lower net finance cost by RM18.7 million.

Lower net finance cost was due to no discounting of transponder's deposit to its present value, which was RM22 million in 2QFY16.

In a filing with Bursa Malaysia today, Astro's revenue in 2QFY17 rose 4.33% to RM1.43 billion from RM1.37 billion a year ago due to an increase of RM1.7 million in subscription, RM17.6 million in advertising, RM36.7 million in home-shopping and RM3.3 million in other revenue. The increase in other revenue is due to an increase in prepaid subscription revenue by RM2.8 million.

The board declared a second interim single-tier dividend of three sen for the financial year ending Jan 31, 2017, amounting to approximately RM156.15 million, which is payable on Oct 13, 2016. The entitlement date for the dividend payment is Sept 30, 2016.

For the first half ended July 31, 2016 (1HFY17), net profit climbed 7.22% to RM327.6 million or 6.29 sen per share compared to RM305.5 million or 5.88 sen per share a year ago, while revenue was up 3.9% to RM2.8 billion against RM2.7 billion.

In a separate statement, it said its 1HFY17's performance saw a modest growth in revenue and profit after tax, and minority interests (PATAMI), underpinned by better performance in e-commerce and advertising expenditure (adex).

EBITDA decreased 6% year-on-year (y-o-y) primarily due to currency depreciation impacting content costs while revenue growth was supported by better performance of adex and Go Shop.

Its group chief executive officer Datuk Rohana Rozhan said Astro serves five million or 69% of Malaysian households (3.5 million Pay-TV and 1.5 million NJOI package) with growth primarily driven by its subscription-free television service NJOI, up 38% y-o-y.

In order to overcome the challenge of providing choice of content, products and services, it deployed data analytics to understand its customers and increase marketing efforts to raise customer awareness of its products, said Rohana.

"Viewership has increased with real time second screen engagement via Astro on the Go (AOTG), content mobile apps and through integrating social media onto our content delivery platforms," she added.

Advertising income grew by 10% y-o-y to RM336.3 million from RM304.5 million in 1HFY16, underpinned by Astro's increased reach and integrated play of TV, radio, mobile and digital.

Astro's share of TV adex and radio advertising amounted to 37% and 73%, respectively.

Astro added that content costs have benefited from renegotiation of contracts with key content suppliers, resulting in significant savings and increased new media rights, which have helped mitigate the impact of currency depreciation and a dual sporting year.

Going forward, Rohana said Astro was committed to delivering sustainable total shareholder returns by continuously reinventing itself to serve its customers and earning its place as the people's media brand of choice.

"In an increasingly fragmented market, our focus remains on differentiating ourselves through our content and talent whilst ensuring best in class customer experiences for our comprehensive suite of products and services across all our media assets," she added.

Astro closed up seven sen or 2.43% to RM2.95, valuing it at RM15.4 billion.