Astro’s 3Q earnings up 4.5% to RM153.2m

By FARA AISYAH / Pic By BLOOMBERG

Astro Malaysia Holdings Bhd’s net profit for the third quarter ended Oct 31, 2018 (3Q18), increased by 4.46% year on-year (YoY) to RM153.22 million due to lower content costs; licence, copyright and loyalty fees; as well as impairment of receivables offset by higher cost of merchandise sales.

The profit growth was also offset by higher net finance costs, which was mainly due to unfavourable unrealised foreign-exchange movement arising from unhedged finance lease liabilities and vendor financing, and increase in interest expenses from borrowings.

Revenue for the three months was at RM1.38 billion against RM1.4 billion a year ago, due to a decrease in subscription revenue, offset by higher merchandise sales and advertising revenue.

In an exchange filing yesterday, the pay TV service provider noted that the decrease in subscription revenue was mainly due to lower package take-up.

The increase in advertising revenue was mainly contributed by advertisement expenditure (adex) by telcos and new device launches, while the increase in merchandise sales was due to the increase in number of products sold, mainly driven by the tactical campaigns executed for the current quarter.

Astro CEO designate Henry Tan said the company had a decent quarter predicated on its strong market reach which has grown 6% YoY to 5.7 million customers, or 76% of Malaysian households, enabling better monetisation across its verticals of pay, prepaid, adex and e-commerce offerings.

“We saw increased adex with the biggest growth coming from digital. We are encouraged by the growth of relatively new revenue adjacencies such as e-commerce, licencing income and theatrical sales signifying encouraging trajectory as traditional subscription revenues remain under competitive pressure.

“The group registered higher pretax and net profit during the quarter, underpinned by efforts to optimise key operating expenses including content costs and cost to serve,” he said.

Astro continues to increase engagement across all platforms, reaching 23 million TV viewers, 16.2 million weekly radio listeners, 7.3 million monthly unique visitors on its digital platforms and 1.6 million shoppers.

The company’s connected boxes increased by 37% YoY to 963,000 households with over 38 million on-demand programmes watched, while registered Astro GO users grew by 38% YoY to 2.1 million.

Astro declared a third interim dividend of 2.5 sen, to be paid on Jan 4, 2019.