Media Prima’s ‘odyssey strategy’ not likely to reverse financial loss position in immediate term
KUCHING: Media Prima Bhd’s ( Media Prima) ‘odyssey strategy’ is not expected to reverse the group’s financial loss position in the immediate term.
According to the research arm of MIDF Amanah Investment Bank Bhd ( MIDF Research), Media Prima’s traditional core businesses continue to impact the group’s overall financial performance which has severely impacted its retained earnings position.
“This has led the company to rethink about its business models in entirety via the execution of its ‘ odyssey strategy’,” MIDF Research said.
“The group is now aiming to grow its revenue in non- advertising, non-TV or print, international and digital segments.”
Coupled with continuous cost management, the research house saw that notable improvement has been seen in the latest quarterly earnings.
It further noted that Media Prima is also monetising its existing asset in effort to build up sizeable cash pile to support the group’s odyssey strategy.
“That being said, we do not expect the strategy to reverse its financial loss position in the immediate term.
“In addition, we also reiterate our stand that there will be no dividend to be announced, at least, until it has returned to profitability.”
All factors considered, MIDF Research reverted its recommendation for Media Prima to ‘ neutral’ from ‘ trading buy’ previously.
On forecasts, MIDF Research maintained its financial year 2018 ( FY18) loss estimate at this juncture, with normalised net loss after minority interest at RM63.6 million.
“However, we are reducing FY19 loss estimate lower to RM 17.2 million from RM27.2 million previously to take into account the operating costs savings from the group’s sales and leaseback activities.”