Astro’s 2Q earnings fall on weaker subscription, ad revenue

The group’s balance sheet remains strong as it continues to be cash generative, cost disciplined and proactive in its capital management

by S BIRRUNTHA / pic by TMR FILE

ASTRO Malaysia Holdings Bhd stated that a decrease in subscription and advertising revenues impacted earnings which declined 21% year-on-year to RM133.65 million for the second quarter ended July 31, 2020 (2Q20).

Revenue for the quarter fell 11.8% to RM1.09 billion from RM1.24 billion a year ago due to the decrease in subscription and advertising revenues but was offset by an increase in merchandise sales.

Earnings per share for the quarter was 2.56 sen. The Pay-TV operator declared a dividend of 1.5 sen for the quarter.

For the six-month period, Astro’s net profit stood at RM207.49 million on revenue of RM2.14 billion versus a net profit of RM345.53 million and revenue of RM2.47 billion recorded for the same period last year.

Astro’s chairman Tun Zaki Azmi said the group’s balance sheet remains strong as it continues to be cash generative, cost disciplined and proactive in its capital management.

CEO Henry Tan (picture) added that the group had delayed several initiatives during the Movement Control Order (MCO) period and its subsequent iterations, including upselling, installations and production of live reality shows.

“Playing our role as a responsible corporate citizen, we acted quickly amid the challenging operating environment to serve our customers and nation as well as to ensure the wellbeing of our employees.

“The 2Q results included the full effect of the one-off sports pack rebate given to our loyal sports customers. We believed this was the right thing to do, providing access to other content and compensating for the absence of live sports,” he said in a statement.

Tan noted that the group operations are now close to full capacity, with the resumption of installations.

“We see the Astro Ultra Box continuing its growth trajectory, with over 100,000 boxes installed, up 60% over three months.

“Customers payment trend is also encouraging, and local productions, global live sports and on-ground events are resuming,” he added.

He also pointed out that the Go Shop programme sustained its strong performance and generated profits for the quarter.

Moving forward, Astro said it is cautious about its prospects for the rest of the year due to prevailing uncertainties amid the pandemic, structural changes in the media industry and the ongoing acts of piracy.

It added that the group is mindful of the potential impact on consumers’ disposable income and sentiments when the loan moratorium ends.

Astro will continue to support its commercial customers who are still affected by the ongoing Recovery MCO.

Commenting further on the group’s outlook, Tan said the group’s agility in adapting to the new normal has allowed the company to deepen its engagement with customers, strengthen its value proposition and seize opportunities for adjacencies in commerce, broadband, digital and over-the-top (OTT).

“We are committed to being the entertainment destination for Malaysians and will drive digital, aggregate more streaming OTT services, push broadband bundles, produce more winning and compelling content while simplifying our products, packages and processes,” he added.

Astro shares last traded up 3.5 sen at 80.5 sen on Tuesday, valuing the company at RM4.2 billion.