KUALA LUMPUR (March 26): Astro Malaysia Holdings Bhd’s net profit fell 34.9% to RM118.4 million for the fourth financial quarter ended Jan 31, 2019 (4QFY19) 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).

Astro said the increase in net finance costs was due to unfavourable foreign exchange (forex) movement arising from unhedged finance lease liabilities and increase in interest expenses attributable to borrowings and finance lease liabilities. 

Ebitda fell 2.3% to RM382.3 million in 4QFY19 from RM391.1 million a year ago. This led to a lower earnings per share of 2.27 sen for 4QFY19 compared with 3.49 sen for 4QFY18.

Quarterly revenue also dropped by a mrginal 1.5% to RM1.37 billion from RM1.39 billion in 4QFY18, mainly due to a decrease in subscription revenue, which was offset by higher merchandise sales and production service revenue.

In a filing with Bursa Malaysia today, Astro attributed the decrease in quarterly subscription revenue to lower package take-up. The increase in merchandise sales, meanwhile, was due to increase in number of products sold, mainly driven by the tactical campaigns executed for the current quarter to capitalise on the festive seasons, it said.

Pay TV average revenue per user remained flat at RM99.9 for 4QFY19.

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. This brings its total payout for FY19 to 9 sen versus 12.5 sen for FY18. 

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.

Revenue for FY19 saw a marginal 0.93% decline to RM5.48 billion from RM5.53 billion in FY18.

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.

In a separate statement, Astro noted that it has 5.7 million subscribers or 77% of Malaysian households, garnering TV viewership share of 75%. 

The group anticipates FY20 to be a challenging year.

Astro chief executive officer Henry Tan said given the challenging operating environment, Astro is reviewing its business so that it remains efficient and agile to serve its customers better.

"Our focus will remain on serving our 5.7 million Malaysian homes and 23 million individuals via our Pay TV and NJOI platforms with differentiated and compelling content. By leveraging on our customer base and our ability to reach and engage on television, radio and digital platforms, revenue adjacencies such as commerce, advertising expenditure, content licensing and theatrical sales are showing promising growth trajectory," he added.

Astro shares closed up four sen or 2.69% at RM1.53 today, bringing a market capitalisation of RM7.98 billion. Year-to-date, its share price has risen 18%.