KUALA LUMPUR (May 21): Utusan Melayu Malaysia Bhd — in which UMNO has a 49.77% stake held via RHB Nominees Tempatan Sdn Bhd — continued bleeding losses in its first quarter ended March 31, 2015 (1QFY15), when net losses widened to RM19.97 million or 18.03 sen per share, from RM19.81 million or 17.89 sen per share in 1QFY14, on lower circulation of its newspapers and magazines.

Revenue in 1QFY15 dropped 11.6% to RM57.85 million, from RM65.42 million a year ago, from lower circulation of its newspapers and magazines. There was also a 1.7% drop in its advertising revenue, its filing to Bursa Malaysia today showed.

Revenue from the circulation of newspapers was down by 12.6%, it noted.

“Nevertheless, the group recorded a lower loss before tax (LBT) of RM19.7 million, as compared with a LBT of RM21.8 million for the corresponding quarter last year, as a result of a reduction in total costs by 13.7%. Employee benefits expenses decreased by RM7.1 million, mainly due to a voluntary separation scheme exercise implemented by a subsidiary company last year,” it said.

On outlook, Utusan Melayu expects to continue facing challenges this year, given the on-going issues affecting consumer sentiments like the implementation of goods and services tax (GST), and the weakening ringgit against other major currencies.

“Nevertheless, we will continue to strengthen our core business, amidst strategies to seek new revenue streams to expand our business portfolios. Newspapers’ content improvements are undertaken and creative packages for advertisements are offered in our effort to increase readership and revenue,” it said.

Utusan Melayu (fundamental: 0.2; valuation: 0.9) added it is also exploring fund raising proposals to address the capital requirements to venture into other businesses.

It is worth noting Utusan Melayu had on August 27 last year, aborted its proposal to raise up to RM75.299 million via a renounceable two-call rights issue.

Utusan Malaysia has been loss-making for the past three years, since financial year ended Dec 31, 2012 (FY12). According to its latest annual reports, its accumulated losses until Dec 31, 2014 stood at RM63.48 million.

The stock closed 3.76% or 2.5 sen higher at 69 sen today, with 28,700 shares traded, bringing its market capitalisation to RM76.41 million.

(Note: The Edge Research's fundamental score reflects a company's profitability and balance sheet strength, calculated based on historical numbers. The valuation score determines if a stock is attractively valued or not, also based on historical numbers. A score of 3 suggests strong fundamentals and attractive valuations)