Budget 2022 will not cause significant impact to Media Prima’s earnings

KUCHING: Budget 2022 will not cause significant impact to Media Prima Bhd’s (Media Prima) earnings, analysts gather following a recent engagement with the company.

“The announced Budget 2022 would not cause significant impact to the group’s earnings as Media Prima would not be affected by the one-off 2022 Prosperity Tax of 33 per cent given that financial year 2022 (FY22F) pretax profit of RM76 million is below the taxable profit threshold RM100 million,” AmInvestment Bank Bhd (AmInvestment Bank) said in an update on the group.

“Meanwhile, government has allocated a total RM238 million to revive the creative industry of which RM188 million is provided to continue initiatives such as the Digital Content Fund, Digital Multimedia Content project, Film Incentive, Perkasa Modal Insan Program and SOCSO protection for artists.

“Additionally, an investment fund of RM20 million to match loans from financial institutions will be available to support Program Riuh Keluarga Malaysia while a RM30 million allocation for the National Animation Platform initiatives will be operated by MyCreative Ventures.”

AmInvestment Bank gathered that those initiatives are mainly focused on the small and medium (SME) enterprises and content production houses and as such, do not benefit Media Prima earnings directly.

“For service tax to be charged on goods delivery services provided by service providers including E-Commerce platform (excludes food and beverages (F&B) delivery services and logistics services), Media Prima via its home shopping channel WOWSHOP has already been absorbing the service tax imposed by third party logistics players.

“Therefore, we think this would not cause further earnings deterioration. Currently, Media Prima’s WOWSHOP is providing free shipping to Peninsular Malaysia whereas certain delivery charges are imposed to East Malaysia.”