Astro’s net profit down 34.9% in 4Q on higher finance costs

by FARA AISYAH / pic by HUSSEIN SHAHARUDDIN

HIGHER net financing costs dragged down Astro Malaysia Holdings Bhd’s net profit for the fourth quarter ended Jan 31, 2019 (4QFY19), to RM118.4 million — down 34.87% year-on-year (YoY) from the RM181.79 million registered in the same quarter last year.

The pay-TV operator’s earnings per share for the quarter stood at 2.27 sen per share, down from 3.49 sen in 4QFY18.

Revenue for the three-month period also fell to RM1.37 billion, marginally against the RM1.39 billion recorded last year, mainly due to the decline in subscription revenue as a result of lower package take-up.

For the whole of FY19, Astro’s net profit decreased 39.93% to RM462.92 million from RM770.64 million recorded in the previous year due to lower earnings before interest, taxes, depreciation and amortisation (Ebitda), and the increase in net finance costs.

Revenue for the year also dwindled to RM5.48 billion from RM5.53 billion in FY18, mainly due to the decline in subscription and advertising revenue.

The company’s board has declared a fourth interim single-tier dividend of 1.5 sen, to be paid on April 25, 2019.

In a filing to Bursa Malaysia yesterday, Astro noted that the increase in net finance costs was due to the unfavourable foreign-exchange movement arising from unhedged finance lease liabilities and vendor financing, and the decrease in Ebitda.

“Given the challenging operating environment, Astro is reviewing its business so that we can remain efficient and agile to serve our customers better.

“Our focus will remain on serving our 5.7 million Malaysian homes and 23 million individuals via our pay-TV and NJOI platforms with differentiated and compelling contents,” Astro CEO Henry Tan said in a statement yesterday.

“By leveraging on our customer base and our ability to reach and engage on TV, radio and digital platforms, revenue adjacencies such as commerce, advertising expenditure, content licensing and theatrical sales are showing promising growth trajectory,” he added.

Astro anticipates FY20 to be a challenging year and recognises the urgency to strengthen its customer value proposition through initiatives such as broadband bundles, seamless viewing across all screens and better customer service.

The group also intends to ride on its key differentiator — its content — by deepening its strength in local vernacular and Asian originals through strategic partnerships to cater to local and regional audience.

As part of the group’s revenue diversification, it continues to leverage on its customer base to offer targeted marketing and advertising solutions enabled by data and analytics, to drive advertising and commerce revenues.