KUALA LUMPUR: Shareholders of Astro Malaysia Holdings Bhd can expect progressive dividend payments in the future, banking on its strong cash-generating business and its stance for a 75% minimum payout rate.
Astro announced a dividend payment of 1.5 sen for the fourth quarter result ended Jan 31, 2013 and a final dividend of 1 sen that is subject to shareholders' approval at the upcoming AGM in July. This brings Astro's full-year dividend payment for the financial year ended Jan 31, 2013 to 4 sen.
Chief executive officer Datuk Rohana Rozhan said at Astro's full-year results briefing that the stock was positioned as a total return stock, which at the same time was going through a reinvestment period.
“The reinvestment period is last year and this year. We are refreshing the technology and ensuring that all the customers are on our new B.yond platform by the end of this financial year, which is 2014,” she said.
Over these two years, she said operating expenditure (opex) would increase due to the installation costs of swapping out the boxes to the B.yond high-definition (HD) platform. Astro has a remainder of 1.3 million boxes to swap out by this year.
As a result of the higher opex, Astro's earnings before interest, tax, depreciation and amortisation (EBITDA) for 2013 was 3% lower at 33% compared to 36% in the previous financial year.
“But, at the same time, we are a very strong cash-generative business and we are in a position to articulate a progressive dividend policy,” Rohana said.
While Astro's investment in B.yond set-top-boxes (STBs) was impacting its margin in 2013 and 2014, it would drive sustainable earnings growth thereafter, she added.
For the fourth quarter ended Jan 31, Astro's net profit fell to RM83.16mil from RM157.01mil in the same quarter a year ago, due to a reduction in interest income of RM41.4mil as well as higher depreciation of RM57.5mil compared with the corresponding quarter, which resulted in lower tax expenses by RM22.3mil.
Revenue for the quarter, however, increased 9.29% to RM1.132bil from RM1.035bil a year ago on the back of higher subscription revenue of RM95mil.
The growth in subscription revenue was attributed to a 5% increase in Astro's average revenue per user (ARPU) to RM93 from RM89 previously. Also, the number of pay-TV residential subscribers rose by 208,500 to 3.276 million.
Meanwhile, full-year revenue for 2013 expanded by 10.87% to RM4.26bil from RM3.85bil a year ago due to the increase of subscription and advertising revenue, as well as good take-up of value-added products and services.
Notably, Astro's advertising revenue growth stood at 9% compared to industry growth at 5%.
In a filing with Bursa Malaysia, Astro said radio revenue grew by RM14.5mil, driven by consistently strong listernership ratings.
Meanwhile, full-year net profit came in 33.55% lower at RM418mil on the back of higher depreciation, decrease in EBITDA and increase in net finance costs.
Rohana said: “The results strongly encourage us as it shows that our customers are hungry for more content, quality experience and more services and products from us.”
Total subscribers for the year grew by 418,000, with pay-TV and Njoi, Astro's multi-channel free TV, taking an equal share.
This brought its total customer base to 3.5 million and a household penetration rate of 52%. Astro's existing Internet-protocol TV (IPTV) collaboration with TIME DOTCOM BHD allows it access to 100,000 homes passed.
The Maxis-Astro IPTV tie-up, which is set to be commercially launched by end-April, will add 1.3 million homes passed for Astro to tap into.
Of these 1.3 million homes passed, Rohana said it was understood that one million were already Astro customers.
The IPTV collaboration with Maxis gives customers the option to purchase bandwidth a la carte or in a bundle together with Astro.
Moving forward, the company will focus on completing the conversion of the remaining subscribers onto the B.yond platform.
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