KUALA LUMPUR (May 21): Star Media Group Bhd said today it will cease all printing activities at its northern hub facility in Bayan Lepas, Penang from September.
Star said the proposed cessation will involve staff redundancies, consideration of future utilisation of the land and building at the facility, as well as disposal of the pressline.
In a filing with Bursa Malaysia today, the media company said however, the decision is not expected to adversely impact its newspaper circulation in the region as the papers will be printed in its headquarters in Shah Alam, Selangor.
"The company will cease all its printing activities at Star northern hub in September in line with its efforts to centralise nationwide printing as part of its ongoing cost rationalisation exercise.
"There is no further impairment on the assets following the proposed cessation as this has been taken into account in the financials for the year ended Dec 31, 2017," it added.
Star was born in Penang as a state-regional English newspaper in 1971, before the group set up new headquarters in 1976 as the paper transitioned to become a national daily.
The media group first moved its northern operations into the Star northern hub in 2003, as the new plant offered increased printing capacity and greater flexibility for newspaper pagination and colour printing.
Star shares hit its all-time low of RM1 on May 16, in the aftermath of Malaysia's 14th general election, which saw the surprise defeat of Barisan Nasional (BN) at the federal level. Star is linked to MCA, a component party of the BN political coalition.
As advertising expenditure is expected to remain challenging, Star has also embarked on a digital transformation, targeting bundle products and other digital-related investment opportunities moving forward.
The counter has since rebounded on the back of firm first quarter earnings for the quarter ended March 31, 2018 (1QFY18).
Star saw net profit rise 70.3% to RM11.32 million in 1QFY18 from RM6.65 million a year ago, on the back of better cost management and lower depreciation expenses.
Quarterly revenue, however, fell 8.1% to RM109.03 million in 1QFY18 against RM118.61 million in 1QFY17.
Star shares closed down one sen or 0.9% to RM1.10 today, with 3.46 million shares done, bringing a market capitalisation of RM805.51 million.