KUALA LUMPUR: Star Publications (M) Bhd registered a turnover of RM1.01bil for the financial year ended Dec 31, 2014, which is a marginal drop of a mere 1.1% compared with the preceding year amid a tough operating environment for the industry as a whole.
The media group was affected by weak advertising spending last year due to the two airline tragedies – MH370 and MH17 – and poor consumer sentiment due to the cautious economic outlook.
As a mark of respect to those impacted by the unprecedented airline tragedies, corporations and government agencies toned down their campaigns, while spending during the festive celebrations saw a marked reduction – events that affected the media industry as a whole.
Profit before tax for the year in operations declined by only 0.8% to RM190.95mil compared with 2013, excluding impairment losses on radio licence, film rights, investment in associates, goodwill and one-off expense from a voluntary separation scheme (VSS).
Including impairments and VSS cost that amounted to RM37.53mil, profit before tax for 2014 is RM153.42mil compared with RM192.59mil registered in the preceding year.
For the fourth quarter, profit before tax came in lower at RM32.30mil due to impairments on the back of a turnover of RM280.89mil. In the corresponding quarter of 2013, Star recorded a pre-tax profit of RM60.56mil on a revenue of RM289.17mil.
In 2014, the mainstay print and digital segment saw a reduction in revenue by almost 6% due to the events affecting the industry.
Profit before tax contracted by 15.3% compared with 2013 mainly due to lower advertising revenue and non-operational expenses such as the VSS and impairments.
The events and exhibition business segment of the group that comprises Cityneon and I.Star Ideas Factory continued to perform well with a significant 65.11% jump in profit before tax to RM19.05mil last year.
This came on the back of an improved turnover of RM235.53mil compared with RM198.88mil in 2013.
The television channel segment saw an improved turnover to RM10.88mil compared with RM9.98mil in 2013. This segment’s loss before tax increased marginally by 5.6% to RM6.71mil in 2014, excluding losses due to impairments.
Revenue for the radio broadcasting segment came in lower by 7.3% to RM51.4mil while losses before tax widened to RM5.97mil due to lower top line and impairment on radio licence.
Going forward, the company and the board expect the challenging business and market conditions to continue in the near term as Malaysia’s economy adjusts to an environment of lower oil prices and weaker ringgit.
However, the various media-related segments of the group will continue to enhance its platforms seeking a wider audience.
The events and exhibition business segment that is seeing encouraging growth will continue to seek out more opportunities both locally and in emerging markets such as Vietnam and Myanmar.
I.Star Ideas Factory will continue with its efforts to strengthen its market position.
In a separate announcement, Star said it is proposing to change its name to Star Media Group Bhd.