Astro posts lower profit due to higher finance cost

launch of Astro on Demand

KUALA LUMPUR: Astro Malaysia Holdings Bhd’s net profit slid 6.5% to RM106.01mil for the third quarter ended Oct 31, 2015 on unrealised foreign exchange (forex) impact, but it will maintain its dividend policy payout.

The broadcaster has declared a dividend of 2.75 sen per share for the quarter under review.

In a filing with Bursa Malaysia, Astro said the lower net profit was due to a drop in earnings before interest, tax, depreciation and amortisation (Ebitda) of RM16.1mil, higher net finance costs by RM36.4mil on unrealised forex impact arising from an unhedged finance lease liability of RM54.5mil and unhedged vendor financing of RM8.8mil. 

This was offset by a decrease in the discounting of the transponder’s deposit to its present value of RM22mil.

The group’s revenue climbed 7.4% to RM1.37bil on an increase in merchandise sales of RM14.6mil from the home-shopping business and sales of programming rights of RM8.4mil. This was offset by a decrease in subscription and advertising of RM10.5mil and RM7.2mil respectively.

Earnings per share (EPS) were lower at 2.04 sen from 2.18 sen in the previous year.

For the nine-month period, the broadcaster’s net profit grew to RM411.55mil from RM379.40mil on the back of a higher revenue of RM4.07bil from RM3.88bil a year ago.

EPS improved to 7.91 sen from 7.30 sen. A dividend of 8.25 sen per share was declared from 6.75 sen per share previously.

Radio’s revenue for the quarter was lower at RM75.1mil from the previous RM80.9mil due to the festive season in the preceding quarter. 

The group said the lower Ebitda margin was dragged by higher content costs, marketing and market research expenses and selling as well as distribution costs, but offset by compensation for delay in return of the transponder and lower impairment of receivables.

The decrease in subscription revenue was due to decrease in net addition for Pay-TV residential subcribers by 900 (from 15,000 to 14,100).

With the aim to deliver strong cashflows, Astro's chief executive officer Datuk Rohana Rozhan said the group added 218,000 new TV customers during the period under review, underpinned by strong response for Astro NJOI.

“This resulted in a customer base of 4.7 million or 66% TV household penetration in the third quarter of financial year 2016 from 62% a year ago.

“Average revenue per user grew to RM99.30 from RM98.50 backed by the take-up of value-added services,” said Rohana said in a press statement, adding that there was good response from its On Demand offering launched in October.

This pushed up connected  personal video recorders to 252,000 and Astro on the Go downloads to 1.8 million with an average 150 minutes weekly viewing time.

Astro’s share of advertising and radio expenditure grew by 34% and 60.5%, driven by higher viewers and listeners.

Meanwhile, Go Shop, its e-commerce business’ revenue went up to RM126mil with good response to the Chinese language channel. Going forward, Rohana added that next year would be a more challenging year with higher sports cost and a volatile forex environment.

Astro shares closed unchanged at RM2.86 on Tuesday.