Star Me­dia en­ters sec­ond phase of trans­for­ma­tion

New Straits Times - - Business - STAR ME­DIA GROUP

PETALING JAYA: The Star Me­dia Group would con­tinue to ex­pand its me­dia plat­forms, tak­ing into ac­count its sec­ond phase of dig­i­tal trans­for­ma­tion.

The com­pany said it would con­tinue to pro­vide more bun­dled prod­ucts and cre­ative buys to ad­ver­tis­ers, as well as or­gan­ise client-driven events, har­ness­ing on its ag­gres­sive move into the dig­i­tal busi­ness space.

Ci­ty­neon Ltd, a firm is in the vir­tual re­al­ity ex­hi­bi­tion busi­ness with in­tel­lec­tual prop­erty rights, was Star Me­dia’s first dig­i­tal trans­for­ma­tion ini­tia­tive while dim­sum.my, a video-on-de­mand ser­vice that fo­cuses en­tirely on Asian con­tent, was launched last year as the sec­ond wave.

Dim­sum, in its next stage of ex­pan­sion, will in­tro­duce more Malay and In­dian con­tent to com­ple­ment its ex­ist­ing ar­ray of movies, dra­mas and news in three lan­guages — Ba­hasa Malaysia, English and Man­darin.

Star Me­dia’s dig­i­tal rev­enue grew by 42 per cent in the first quar­ter, com­pared with the cor­re­spond­ing quar­ter a year ago.

How­ever, it could not mit­i­gate the over­all per­for­mance of the print and dig­i­tal seg­ment as profit-be­fore-tax from this busi­ness di­vi­sion, which is the main­stay of Star Me­dia, de­creased to RM8.09 mil­lion in the first quar­ter, com­pared with RM27.16 mil­lion last year.

As a whole, Star Me­dia recorded a rev­enue of RM183.10 mil­lion and a net profit of RM9.27 mil­lion for the first quar­ter ended March 31.

Poor mar­ket sen­ti­ments and weak ad­ver­tis­ing ex­pen­di­ture (adex) led to a de­cline of 19.5 per cent in the rev­enue of the print and dig­i­tal seg­ment.

How­ever, Star Me­dia’s per­for­mance is bet­ter, com­pared with the in­dus­try av­er­age, where adex fell by 22.6 per cent in the quar­ter.

The event and ex­hi­bi­tion seg­ment recorded a profit-be­fore­tax of RM7.51 mil­lion in the quar­ter, com­pared with a loss be­fore tax of RM1.76 mil­lion last year. Rev­enue was higher at RM54.13 mil­lion. The per­for­mance is mainly due to Ci­ty­neon.

Go­ing for­ward, the com­pany said the pro­posed dis­posal of its 52.51 per cent stake in Ci­ty­neon would al­low it to un­lock its in­vest­ments in the sub­sidiary and con­cen­trate on the ex­pan­sion of its pri­mary busi­ness.

The pro­ceeds from the pro­posed dis­posal of S$115.61 mil­lion (RM360.18 mil­lion) would im­prove Star Me­dia’s cash re­serves and give it more lee­way to look for new in­vest­ment op­por­tu­ni­ties in its dig­i­tal trans­for­ma­tion.

The pro­posed dis­posal of its 52.51 per cent stake in Ci­ty­neon will al­low the com­pany to un­lock its in­vest­ments in the sub­sidiary and con­cen­trate on the ex­pan­sion of its pri­mary busi­ness.

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