PETALING JAYA: Star Media Group Bhd (SMG), after launching a number of new digital products and platforms last year to further reach out to its audiences, expects revenue growth from its digital segment to continue despite the soft and challenging market conditions brought about by the Covid-19 pandemic and the movement control order (MCO).
In a filing with Bursa Malaysia when it released its fourth quarter and full-year financial results, SMG said the group will 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 print.
“Towards this end, SMG Brand Studio provides advertisers a One Stop Shop for solution-based, end-to-end marketing planning encompassing strategy, data & analytics to creative and content execution. This new service will certainly complement our existing growth in digital platforms. We hope to increase advertising take-up rates during these uncertain times and achieve a higher growth in the near future, ” it said.
SMG said it had 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 on how it gets back into the market, especially post MCO.
“The Group has a strong balance sheet, with a cash reserve of more than RM300mil with no borrowings as of Dec 31,2020. 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, ” it said.
As business and consumer behaviours remain uncertain, SMG said its revenue gradually improved from Q3’2020 and drastic measures are also being taken to contain the impact of the pandemic.
For financial year 2020, SMG recorded a pre-tax loss of RM16.53mil compared with a pre-tax profit of RM14.64mil in the 2019 financial year. It said revenue from all segments were impacted by the pandemic and prolonged movement control orders.
However, with the implementation of conditional MCO (CMCO) in the second half of the year, revenue gradually improved and it saw a slight spend shift into digital advertising.
Its print and digital segment for the year recorded a pre-tax loss of RM17.15mil in FY2020 compared with a pre-tax profit of RM13.20mil in FY2019.
“Many advertisers were still very cautious on advertising spending due to the effects of Covid-19 and subsequent MCO. However, digital revenue has marginally improved by 2% in FY2020 as compared to FY2019, ” it said.
On its radio arm, SMG said revenue declined to RM20.27mil in FY2020 from RM24.82mil in FY2019 as a result of cautious spending by advertisers due to the pandemic.
“Revenue has gradually improved since Q2’2020 as Malaysia implemented recovery MCO and CMCO in the second half of FY2020. This segment recorded a pre-tax loss of RM3.37mil in FY2020 as compared to a pre-tax profit of RM0.81mil in FY2019, ” it said.
On its event and exhibition segment, revenue decreased to RM3.68mil from RM13.80mil, mainly due to cancellation of events in FY2020 caused by the pandemic.
“This segment recorded a small pre-tax loss of RM0.38mil in FY2020 as opposed to a pre-tax profit before tax of RM1.76mil in FY2019, ” it said.