Astro secures Premier League broadcast rights amid profit drop
PETALING JAYA: Astro Malaysia Holdings Bhd posted lower earnings in the second quarter ended July 31, as the high content cost of the 2018 FIFA World Cup reduced its margins, while the weaker ringgit resulted in higher finance charges.
In addition, advertising expenditure (adex) during the period was soft.
In its filings, the satellite pay-TV operator said its net profit slumped 94% to RM16.58mil for the May-July quarter, compared with the RM246.3mil made a year ago, as the earnings before interest, tax, depreciation and amortisation margin decreased by 18.4% due to higher content costs from the FIFA World Cup and higher cost of merchandise sales, while net finance costs rose due to unfavourable unrealised forex movement.
During the quarter in review, Astro’s revenue was relatively stable at RM1.42bil, with the average revenue per user for its pay-TV business steady at RM99.9. And its earnings per share (EPS) fell to 0.32 sen from 4.73 sen.
The group has declared a second interim dividend of 2.5 sen per share, bringing the year-to-date payout to five sen per share.
Astro chief executive officer-designate Henry Tan said the group had anticipated the higher content costs during the quarter in review.
“As budgeted, we experienced increased content costs for the 2018 FIFA World Cup,” he said in a state- ment.
“In addition, the financial results were affected by the reduced need to advertise during the tax holiday period from June 1 to Aug 31, 2018 and the depreciating ringgit,” he added.
Nevertheless, Tan said, Astro continued to have stable revenues across TV and radio with diversification from digital platforms, eCom- merce, licensing income and theatrical sales.
“Going forward, we expect the group’s second-half performance to improve and we will remain focused on key business drivers,” Tan said.
Separately, Astro said it has secured the exclusive broadcasting rights to the English Premier League (EPL) for the next three seasons till 2021/22.
For the cumulative period, Astro’s net profit stood at RM191.31mil, compared with RM442.17mil for the six months to July 2017, resulting in a lower EPS of 3.67 sen versus 8.49 sen previously.
During the cumulative period in review, the group’s revenue fell marginally to RM2.73bil, from RM2.75bil previously.
“This was mainly due to a decrease in subscription and advertising revenue, offset by an increase in merchandise sales, licensing income and sales of programme broadcast rights,” Astro said of its lower revenue.
“The decrease in subscription revenue was mainly due to lower package take-up and the decrease in advertising revenue was due to a slowing advertising market. The increase in merchandise sales was due to an increase in the number of products sold,” it explained.
Meanwhile, Astro announced that it has secured the EPL broadcast rights in Malaysia for the next three seasons from 2019/20 to 2021/22, sealing an important content that drives a lot of its subscriber interest.
“We are pleased to continue our long-standing partnership with the EPL to provide unrivalled coverage of the biggest and most exciting football league in the world. With all 380 matches available live in HD on Astro TV and Astro GO, every football fan can catch every match and cheer for their favourite clubs.
“We hope to excite sports customers by broadcasting selected live matches of the new season in 4K UHD. We look forward to rolling out our 4K UHD offerings to provide the most premium and immersive sports viewing experience,” said Astro chief of sports Lee Choong Khay.