Astro to of­fer VSS

Group ex­pects to save RM80mil in staff cost from ex­er­cise

The Star Malaysia - StarBiz - - News -

PETALING JAYA: In a strate­gic re­view of its busi­ness to strengthen its po­si­tion in the mar­ket, Astro Malaysia Hold­ings Bhd will be un­der­tak­ing a vol­un­tary sep­a­ra­tion scheme (VSS) for its em­ploy­ees, of­fered purely on a vol­un­tary ba­sis.

Ac­cord­ing to a source, Astro is ex­pect­ing to save 15% or an es­ti­mated RM80mil in staff cost as a re­sult of the VSS in fu­ture fi­nan­cial years.

For the fi­nan­cial year ended Jan 31, 2018, Astro’s staff cost amounted to RM590mil.

In a state­ment, Astro CEO des­ig­nate Henry Tan said the VSS would al­low the group to fur­ther sim­plify the or­gan­i­sa­tion, en­hance op­er­a­tional ef­fi­ciency and re­duce an­nual op­er­at­ing ex­penses.

“In an in­creas­ingly bor­der­less and dig­i­tal world, com­pe­ti­tion is re­lent­less.

“Astro con­tin­ues to be proac­tive to rein­vig­o­rate the group in or­der to strengthen its po­si­tion in the mar­ket and to re­main rel­e­vant in the years ahead,” he said.

The com­pany has also out­lined a tran­si­tion pro­gramme that will pro­vide the right sup­port to em­ploy­ees who opt for the VSS. This pro­gramme in­cludes coach­ing and skill-up­grad­ing train­ing.

Ad­di­tion­ally, Astro will put in place mea­sures to en­sure that cus­tomer ex­pe­ri­ence will not be im­pacted by this ex­er­cise.

The me­dia and en­ter­tain­ment in­dus­try is cur­rently op­er­at­ing in an en­vi­ron­ment that is ex­pe­ri­enc­ing an un­prece­dented rate of dis­rup­tion.

In­dus­try play­ers are re­quired to rein­vent and adapt swiftly to re­main rel­e­vant in this new re­al­ity.

Astro’s VSS mir­rors Utu­san Me­layu (M) Bhd. Classed as a PN17 com­pany in Au­gust, Utu­san is ex­pected to of­fer VSS to 800 of its 1,500 em­ploy­ees as part of its re­struc­tur­ing ex­er­cise.

For the third quar­ter of fi­nan­cial year end­ing Jan 31, 2019, Astro reg­is­tered a 4.5% net profit in­crease to RM153.2mil, driven by a re­bound in ad­ver­tis­ing ex­pen­di­ture sup­ported by other rev­enue con­trib­u­tors, in­clud­ing e-Com­merce and the­atri­cal sales.

The group saw a higher earn­ings be­fore in­ter­est, tax, de­pre­ci­a­tion and amor­ti­sa­tion (EBITDA) mar­gin for the third quar­ter, 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.

Dur­ing the pre­ced­ing se­cond quar­ter, Astro posted a 94% slide in net profit to RM16.58mil for the May-to-July quar­ter com­pared to the RM246.3mil net profit last year, due to higher con­tent costs from FIFA World Cup and higher cost of mer­chan­dise sales, while net fi­nance costs rose due to un­favourable un­re­alised forex move­ment.

On a cu­mu­la­tive nine-month ba­sis, Astro’s net profit was 41.5% lower at RM344.5mil, com­pared to RM588.8mil for the nine months ended Oc­to­ber 2017.

This 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 was due to un­favourable forex move­ment aris­ing from un­hedged fi­nance lease li­a­bil­i­ties and higher in­ter­est ex­penses for bor­row­ings and fi­nance lease li­a­bil­i­ties.

Astro closed 1.4% lower at RM1.36, traded on a vol­ume of 6.86 mil­lion shares.

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