ASTRO All Asia Networks plc reported yesterday its best quarter yet and declared a maiden dividend for its financial year ended Jan 31, 2005.
The pay-TV company posted a more than 10-fold increase in net profit to RM155.4mil, or 8.1 sen a share, for the year, beating estimates of RM137.7mil in a poll of brokers by Reuters Estimates. A year ago, its net profit was RM12.3mil, or 0.88 sen a share.
Revenue rose 21% to RM1.72bil from RM1.42bil and pre-tax profit improved slightly under 10 times to RM213.2mil from RM22.6mil.
For the year, the company declared a dividend of 2.5 sen a share, representing a payout ratio of 30% or RM48mil.
For its fourth quarter, Astro posted a 90.3% rise in net profit to RM72.5mil, or 3.77 sen a share, from RM38.1mil, or 1.99 sen a share, in the previous corresponding period.
Revenue improved by 16.3% to RM461mil from RM396.4mil and pre-tax profit shot up 124% to RM89.6mil from RM40mil.
“In a nutshell, we have delivered pretty much to expectations. The TV business has continued to perform very well, definitely to expectations, and the radio business has responded well,'' said Astro group chief executive officer Ralph Marshall. “Overall, we are well positioned to continue the growth of the TV business.''
Astro expects profits for the 2006 financial year to be higher still even after taking a RM100mil hit for the first year of its operations in Indonesia.
For the year just ended, Astro grew its subscriber base by 283,000 to 1.566 million, representing a penetration rate of 30.4%. In the fourth quarter alone, it added 95,000 subscribers, its highest addition in a single quarter.
Average revenue per subscriber was RM80, down RM1 from the previous year, and the subscriber acquisition cost, because of lower marketing costs, fell 7% to RM789 per box from RM848 in the preceding quarter.
“Celestial (Astro's Chinese movie channel) was working in a market that had some setbacks. The distribution market for VCDs and DVDs was difficult throughout the year, particularly for Hong Kong, Malaysia and Indonesia,'' Marshall said.
He said the Celestial channel, which will also be launched in Thailand in April, had shown great promise and was now available to two million homes across nine countries.
“We expect Celestial to come through with strong earnings over the next two to three years,'' he said.
Marshall said the churn rate, at 9% in the 2005 financial year, was expected to improve.
“We have been achieving growth penetration into the mass market, which is essentially the Malay-speaking market, and we are achieving good penetration into the overall mass market,'' he said. At the end of its latest quarter, Astro had 626,708 Malay subscribers, 645,322 Chinese subscribers and 216,750 Indian subscribers.
Going forward, Astro expects to strengthen its subscriber base by 250,000 to 300,000 and will incur higher content and operational costs as it prepares to introduce new channels in the fourth quarter of its current year.
Average revenue per subscriber is projected to remain flat until revenues from the new channels kick in and the company is expected to experience higher capital expenditure owing to deferrals from the previous financial year. Astro had planned to invest RM200mil during its 2005 and 2006 financial years.
The company is expected to introduce 50 new channels within a year, most probably after the Measat-3 satellite is launched in September this year.
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