STAR Publications (M) Bhd chairman Yong Ming Sang said he expected the group to perform satisfactorily in the current financial year to Dec 31, if the Severe Acute Respiratory Syndrome (SARS) outbreak was contained and newsprint prices remained stable.
He told shareholders at the company's AGM yesterday that the group would strive to maintain a good and consistent dividend payout to reward its shareholders. For the financial year to Dec 31, 2002, the company paid a dividend of 20 sen (including 15 sen tax exempt) compared with 15 sen the prior year.
“Subject to the need to maintain sufficient funding requirements for the running of the company and for expansion, our policy has always been to distribute a good part of the group's profits back to our shareholders. This is done in the good faith of maximising shareholders' value and maintaining good corporate citizenship,'' Yong said.
Managing director Datuk Steven Tan said Star Publications was adopting a prudent policy by stocking up on newsprint to take advantage of the current low prices.
He said world newsprint prices were currently at historical low levels of between US$420 and US$430 per tonne. However, the situation could change suddenly should there be an increase in demand following any economic recovery.
“Hence, we think it's prudent to hold more newsprint stock. From our past experience, any shortage of newsprint could drive prices up very quickly, resulting in much higher operating costs,” he said.
Later, at a news conference, Tan said that based on the more subdued prospects for the local economy, advertising expenditure was expected to grow at between 6% and 8% this year for the industry.
He said The Star was hopeful that its advertising revenue would be above the industry average, adding that the firm was now able to deliver a bigger and better quality newspaper in terms of pagination and editorial and advertising content with the establishment of new printing plants at Star Media Hub in Bukit Jelutong and at The Star's Northern Hub in Penang.
On the impact of the SARS outbreak on the company, Tan said there would be a “time lag” and it was too early to speculate on its effect on advertising revenue.
Meanwhile, Star Publications told the KLSE that it and vendors Rediffusion Bhd and Forefront Assets Sdn Bhd had agreed to extend by another month to May 31 the effective date for the proposed RM23.6mil purchase of the entire stake in Radio Rediffusion Sdn Bhd.
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