Media Prima sees second consecutive year of loss in FY17

Media Prima sees second consecutive year of loss in FY17
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KUALA LUMPUR (Feb 22): Media Prima Bhd saw its second consecutive year in the red as the group reported a wider net loss of RM650.61 million for the  year ended Dec 31, 2017 (FY17), a significant increase from RM59.2 million in FY16, amid impairments and other exceptional items totalling RM497.4 million.

Revenue for the year fell 7% to RM1.19 billion from RM1.28 billion.

According to the group’s filing with Bursa Malaysia, the exceptional items that impacted its financials for FY17 included impairments of investment in an associate; of property, plant and equipment; and impairment of intangible assets in relation to publishing rights.

Other items were road reserve occupancy fees payable to the Malaysian Highway Authority, provision for manpower rationalisation and termination benefits.

Looking at its business segments, most of its divisions saw a decline in revenue contribution, namely the television networks, print media, radio networks and content creation divisions.

The television networks segment was affected by softer advertising expenditure (adex) take up in the free-to-air segment, leading to lower revenue and a loss of RM112.9 million.

The radio network division also saw lower adex, resulting in lower revenue and profit for FY17.

The poorer performance of the print media segment was attributed to lower newspaper advertising and circulation revenue, along with impairment losses and manpower restructuring expenses.

Media Prima’s divisions that performed positively were the digital media segment, which saw a 71% jump in revenue amid higher internal shared service and digital advertising revenue, and the home shopping division which recorded strong revenue of RM129.5 million.

The outdoor media segment also recorded revenue growth, but the backdated authority fees charged by Malaysian Highway Authority had resulted in a net loss of RM7.9 million for the year.

For the fourth quarter (4QFY17), Media Prima reported a  net loss of RM378.15 million compared to a net profit of RM4.99 million in 4QFY16, while revenue declined 4% to RM306.19 million from RM318.63 million.

Media Prima managing director Datuk Kamal Khalid said the group had accelerated its business transformation plan in 2017 to better equip itself in capitalising on opportunities and confronting the challenges posed by the rise of digital media.

“Our results show we have not managed to fully escape them but we are encouraged by the outcomes of our efforts. We are taking the opportunity to make the necessary changes and deal with legacy assets and practices so that we can live up to our vision of being a leading digital-first content and commerce company,” he said in a statement.

“We will remain focused on honing our competitive advantage in the digital media landscape while keeping a close watch on our traditional media segments. Moving forward, we will continue to make strategic and prudent investments to enhance long-term shareholder value,” said Media Prima group chairman Tan Sri Ismee Ismail.

Media Prima’s share price rose 1 sen or 1.64% to close at 62 sen, giving it a market capitalisation of RM687.7 million.