PETALING JAYA: Star Media Group Bhd expects revenue growth from its digital segment despite the soft and challenging market conditions.
SMG, which released its financial results on Thursday, said it would focus on using new technologies and analytics to improve, deepen and predict how its customers consume content with the end goal of increasing engagement and monetisation to drive new revenue streams beyond its print business segment.
“With our existing growth in digital platforms, we hope to increase the advertising take-up rates during these uncertain times and achieve a higher growth in the near future, ” said the company in announcing its results.
In spite of the challenging environment, SMG said it would continue to progress with its digital transformation initiatives as well as improving costs and operational efficiencies.
“The group has embarked on various cost cutting measures and efforts are also being directed at restructuring some of the business units within the group to re-strategise operations, which include manpower rationalisation and realignments in how we get back into the market, especially post MCO.”it said.
SMG posted a net loss of RM27mil and a revenue of RM31.5mil for the second quarter of its 2020 financial year.
For the first half of the financial year, SMG reported a loss of RM30.9mil with revenue of RM97.3mil for the period.
SMG said it registered a loss mainly due to loss from its print and digital segment.
“Due to the Covid-19 pandemic, many businesses are holding their advertising spending for other business priorities, ” it said.
The print and digital segment recorded a pre-tax loss of RM25.41mil in the second quarter compared with a pre-tax profit of RM3.11mil in the second quarter of 2019.
Revenue for the latest quarter was lower due to softness in Malaysian economy coupled by the effects of Covid-19 and the subsequent MCO which further exacerbated the revenue loss in the quarter.
For its radio broadcasting segment, it generated a revenue of RM2.02mil in the second quarter compared with RM5.68mil in the same quarter in 2019.
“This segment recorded a loss of RM2.98mil as compared to RM0.45mil in 2Q 2019. The decline in revenue is mainly attributed to cautious spending by advertisers and subdued advertising market due to the Covid-19 pandemic, ” said SMG.
For its event and exhibition segment, revenue declined to RM0.16mil from RM2.23mil and the segment recorded a pre-tax loss of RM0.27mil in the second quarter as compared with a pre-tax loss of RM0.04 million in the same quarter of 2019.
“The pandemic has caused a lot of our offline events to be cancelled but we have taken this opportunity to explore online alternatives i.e. webinars, Star Virtual Education Fair which have helped to limit the fallout from these cancelled events, ” it said.
SMG said it has a strong balance sheet, with cash reserves of more than RM300mil and no borrowings as of June 30,2020.
“This will act as a solid base for SMG to capitalise on merger and acquisition opportunities during the market consolidation, and even penetrate into new businesses that have a promising outlook. With its strong financial standing, the board is confident the group is well positioned to weather through these unprecedented challenges, ” said SMG.