KUALA LUMPUR (May 31): Media Prima Bhd shares fell 6.58% this morning after its net loss for 1QFY19 widened to RM40.41 million, from RM21.83 million, due to declining advertising expenditure (adex) and newspaper sales.

At 9.11am, Media Prima fell 2.5 sen to 35.5 sen with 81,400 shares traded.

Revenue fell 14.8% to RM239.10 million from RM280.97 million, as all segments bar its home shopping segment, saw lower top-line income. Loss per share for 1QFY19 widened to 3.64 sen, from 1.97 sen last year.

Meanwhile, CIMB Research downgraded Media Prima Bhd to “Reduce” at 38 sen with a lower target price of 34 sen (from 51 sen) and said Media Prima’s 1Q19 core net loss of RM40.4 million exceeded house and Bloomberg consensus full-year net loss projections in FY19F.

In a note today, the research house said the publishing segment was the main drag in 1Q19, as its after-tax loss widened by almost 10x year-on-year (y-o-y) to RM22 million on lower adex and circulation revenue.

CIMB Research said it was negatively surprised by the 41% y-o-y revenue drop in Media Prima’s publishing subsidiary, New Straits Times Press Bhd (NSTP).

It said the y-o-y decline was inevitable because NSTP’s 1Q18 was boosted by election-related adex.

“Yet, the print and digital segment of NSTP’s competitor, Star Media, had a more benign y-o-y drop in its 1Q19 revenue, at 21.9%.

“Also, NSTP’s 1Q19 revenue of RM48.1 million was only two-thirds of Star’s print and digital segment’s – despite NSTP having more titles than Star.

“Downgrade Media Prima to Reduce. Our target price is lowered by 33% to 34 sen, now based on 0.5x FY20F P/BV,” it said.