PublicInvest maintains outperform on Astro with lower TP of RM2

Existing customers don

KUALA LUMPUR: Astro Malaysia Holdings Bhd's earnings result in 2QFY19 came in lower than expected with revenue flat at RM1.42mil but net profit falling 93.3% to only RM16.6mil.

"Adjusting for the unrealised forex losses due to the revaluation of M3B transponder lease liabilities, 2QFY19 normalised net profit came in at RM46.6m (-80.8% YoY)," said PublicInvest Research

For 1HFY19, revenue was within expectations but normalised net profit came in below expectations at only 34% and 33% of its and consensus full-year estimates respectively.

The poor results were mainly dragged by higher-than-expected content cost from the 2018 FIFA World Cup due to the weaker ringgit, the weaker-than-expected adex due to the reduced need to advertise during the tax holiday period and the higher finance cost.

TV fell into the red with LBT of RM13.5m for the first time since its relisting (vs. RM310.4m
in 2QFY18).

"We cut our earnings by 7-26% for FY19-21F mainly to account for the higher-than-expected content cost and the weaker-than-expected adex," said the research house.

It maintained its outperform call with a lower target price of RM2.