Media Prima in the red in 2Q19 as revenue declines

By MARK RAO / Pic By TMR File

MEDIA Prima Bhd was in the red for its second quarter ended June 30 this year (2Q19) as growth in the home shopping business failed to offset the decline from traditional revenue streams.

The integrated media group fell to a net loss of RM8.82 million for the quarter against a RM31.95 million net profit in 2Q18 due to lower group turnover which declined 13.3% year-on-year (YoY) to RM296.77 million.

This brought the company’s net loss for the first half of 2019 (1H19) to RM49.23 million, while revenue came in 14% lower YoY at RM535.87 million.

A RM45.3 million gain from a share sale was also recognised in 1H18, thus resulting in a higher base for that period when read against 1H19.

Excluding the one-off gain, the media group would have posted a loss after tax of RM36.6 million, its exchange filing yesterday noted.

Media Prima said its 1Q19 performance — which was hit by lower advertising and circulation revenue — weighed on the group’s overall 1H19 performance, with the decline attributable to the continued shift of advertising spend to digital platforms.

Nonetheless, the company is optimistic of its future prospects.

“The group is confident of still maintaining strong market presence which will enable it to compete in the advertising expenditure (adex) market for the remaining quarters,” it said.

Media Prima is also reviewing its existing business-as-usual processes to further improve on revenue generation efforts.

“The group’s existing and new brands — either on traditional or digital platforms — still command extensive reach and strong monetisation opportunities.

“As the group explores new investment opportunities and enhances its efforts to improve existing transformation initiatives, continuous cost management will still be a priority, while exercising prudent financial and risk management,” it said.

Media Prima’s television (TV) network business — where it owns and operates free-to-air TV stations such as TV3 and TV9 — was the group’s largest revenue contributor in 1H19, but the segment was hit by lower adex take-up.

Cost management efforts, however, allowed the segment to report lower losses for the period.

The group’s publishing business comprises its over 98% stake in The New Straits Times Press (M) Bhd which owns New Straits Times, Berita Harian and Harian Metro.

This segment remained challenging on the continued decline in newspaper advertising and circulation revenue.

The home shopping business, in contrast, continued to grow on increased exposure from more hours dedicated to home shopping slots on Media Prima’s NTV7 and TV9 networks.

Earlier this month, Aurora Mulia Sdn Bhd upped its stake in Media Prima to 20.56% after acquiring 50 million new shares in the company. This was done via a direct business transaction.

Aurora Mulia acquired 55 million shares in the media group on July 11 this year, bringing its interest to 16.05%. It previously purchased 123.02 million shares in the company from Umno-linked Gabungan Kesturi Sdn Bhd on July 2 for an 11.09% stake.

Aurora now holds 228.02 million shares in Media Prima, valued at RM109.45 million based on the latter’s closing price of 48 sen yesterday.

Media Prima’s results come as loss-making Utusan Melayu (M) Bhd, which operates Malaysia’s oldest Malay language newspaper Utusan Malaysia, was among the victims of the industry-wide declines in the circulation of print-based newspapers and associated advertising business.

Utusan, a Practice Note 17 status company, will have its shares suspended on Aug 28 this month.

Its shares will be delisted two days after if the company fails to submit an appeal to Bursa Malaysia Securities Bhd.

Utusan posted a RM12.09 million net loss in 1H19 on continued cashflow constraints. The latter prevented the company from bringing in new investors to revive the business.

Utusan registered consecutive full-year net losses from the 2012 to 2018 fiscal years, amounting to total losses of RM394.95 million.

In comparison, Media Prima posted a hefty RM669.66 million loss after tax for the fiscal year ended Dec 31, 2017 (FY17), but managed to recover in FY18 with a RM58.99 million net profit on revenue diversification and asset-light strategies.

Shares in Media Prima closed one sen lower at 48 sen yesterday, while Utusan closed at five sen — down one sen.