By Xavier Kong
ASTRO Malaysia Holdings Bhd (Astro) posted a 10% increase in net profit to RM169.7 mil despite a 12.2% decline in turnover to RM1.21 bil in the third quarter of the year to Jan 31, 2020.
The decrease in revenue was mainly due to a decrease in subscription revenue, production revenue and sales of programming rights and advertising revenue, while the increase in net profit was attributed to lower net finance costs and lower tax expenses, offset by a decrease in earnings before interest, tax, depreciation, and amortisation (EBITDA).
Quarter on quarter (qoq), Astro reported lower revenue as well, down 1.7% or RM21 mil from RM1.23 bil, citing decreases in subscription revenue, offset by increases in advertising revenue and merchandise sales.
In terms of net profit, the group saw a 1.1% or RM1.8 mil increase qoq, citing lower content costs and lower impairment of receivables as well as lower tax expenses, offset by higher net finance costs.
In terms of its year-to-date performance, the group reported a revenue of RM3.68 bil, down by 10.3% yoy, and a net profit of RM506.9 mil, up 48.1% yoy.
“Despite a challenging media landscape, Astro continues to deliver solid profit after tax and minority interests (PATAMI) growth as we continue our journey to improve customer service, refresh our content as well as enhance home entertainment and personalisation on Astro GO,” said CEO Henry Tan.
The group is placing greater emphasis on video streaming services, with three exclusive streaming services to its name – Astro GO, HBO GO and iQIYI.
The group also reported a third interim dividend of 2 sen per ordinary share, which chairman Tun Zaki Azmi attributed to a strong free cash flow of RM234 mil.
“Astro remains highly cash generative, cost disciplined and proactive in its capital management,” he added.
On outlook, the group noted that the market remains challenging with structural changes in the global content, media and advertising industries, including threats of piracy and the streaming wars.
Astro’s focus is to strengthen its core Pay TV and NJOI businesses while maintaining disciplined cost optimisation efforts.
The group will also leverage on its customer base to build new revenue adjacencies in commerce, broadband, digital and over-the-top online video services.
At the end of the trading day, Astro’s shares closed at RM1.36, down a sen, with 2.46 million shares traded.
