Astro posts higher net profit for the third quar­ter

The Star Malaysia - StarBiz - - News -

PETALING JAYA: Astro Malaysia Hold­ings Bhd saw its net profit in­crease 4.5% to RM153.2mil for the third quar­ter (3Q) of its fi­nan­cial year (FY) end­ing Jan 31, 2019, from RM146.7mil in the cor­re­spond­ing quar­ter last year.

Con­se­quently, the pay-TV op­er­a­tor’s earn­ings per share (EPS) rose to 2.94 sen from 2.81 sen pre­vi­ously.

The group de­clared a third in­terim div­i­dend of 2.5 sen per share.

In a state­ment, Astro at­trib­uted the in­crease in its earn­ings to a re­bound in ad­ver­tis­ing ex­pen­di­ture (adex) sup­ported by other rev­enue con­trib­u­tors, in­clud­ing ecom­merce and the­atri­cal sales.

The group said it reg­is­tered higher earn­ings be­fore in­ter­est, tax, de­pre­ci­a­tion and amor­ti­sa­tion (EBITDA) mar­gin for 3Q19, as a re­sult of lower con­tent costs, li­cence, copy­right and loy­alty fees and im­pair­ment of re­ceiv­ables, de­spite be­ing off­set by higher costs of mer­chan­dise sales.

Com­ment­ing on Astro’s re­sults, CEO-des­ig­nate Henry Tan said the group’s higher EBITDA and net profit dur­ing the quar­ter was un­der­pinned by ef­forts to op­ti­mise key op­er­at­ing ex­penses, in­clud­ing con­tent costs and cost to serve.

“We saw in­creased adex, with the big­gest growth com­ing from dig­i­tal. We are en­cour­aged by the growth of rel­a­tively new rev­enue ad­ja­cen­cies such as ecom­merce, li­cens­ing in­come and the­atri­cal sales; sig­ni­fy­ing en­cour­ag­ing tra­jec­tory as tra­di­tional sub­scrip­tion rev­enue re­mains un­der com­pet­i­tive pres­sure,” Tan noted in a state­ment.

Dur­ing the quar­ter in re­view, Astro’s rev­enue fell marginally by 1% to RM1.38bil from RM1.4bil in the pre­vi­ous cor­re­spond­ing pe­riod. This was mainly due to a de­crease in sub­scrip­tion rev­enue, off­set by higher mer­chan­dise sales and ad­ver­tis­ing rev­enue.

Astro said the de­crease in sub­scrip­tion rev­enue was mainly due to lower pack­age take-up, while the in­crease in ad­ver­tis­ing rev­enue was mainly con­trib­uted by ad­ver­tis­ing spend on tel­cos and new de­vice launches, and the in­crease in mer­chan­dise sales was due to in­crease in num­ber of prod­ucts sold.

For the cu­mu­la­tive pe­riod, Astro’s net profit was 41.5% lower at RM344.5mil, com­pared with RM588.8mil for the nine months ended Oc­to­ber 2017, and its EPS fell to 6.61 sen from 11.3 sen pre­vi­ously.

It said the de­crease was mainly due to a de­crease in EBITDA and in­crease in net fi­nance costs, off­set by lower tax ex­penses. The in­crease in net fi­nance costs, the group ex­plained, was due to un­favourable forex move­ment aris­ing from un­hedged fi­nance lease li­a­bil­i­ties and in­crease in in­ter­est ex­penses for bor­row­ings and fi­nance lease li­a­bil­i­ties.

For the nine months of FY19, Astro’s rev­enue at RM4.11bil was lower by 0.8% against RM4.14bil in the pre­vi­ous cor­re­spond­ing pe­riod. This was mainly due to a de­crease in sub­scrip­tion and ad­ver­tis­ing rev­enue, off­set by in­crease in mer­chan­dise sales, li­cens­ing in­come and sales of pro­gramme broad­cast rights.

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