Astro 1Q net profit dips on earnings decline

Despite headwinds, Astro group chief executive officer Henry Tan said the group remains steadfast in executing its transformation plan and streaming aggregation strategy.(Flle pic)

KUALA LUMPUR: Astro Malaysia Holdings Bhd’s net profit for its first quarter ended April 30, 2022 dropped to RM100.02mil from RM141.25mil in the previous corresponding period, mainly due to a decrease in earnings before interest, taxes, depreciation and amortisation (ebitda) and higher net financing costs.

In a filing with Bursa Malaysia yesterday, the pay-TV operator said its ebitda margin decreased by 2.5% against the previous corresponding quarter.

“This is mainly due to higher content costs, marketing and market research expenses and broadband costs, offset by lower merchandise costs and licence, copyright and royalty fees, as a percentage of revenue.”

It said the higher financing costs incurred during the quarter was due to unfavourable unrealised foreign exchange losses arising from unhedged lease of transponders, which was offset by lower depreciation of right-of-use assets and tax expenses.

Revenue in the first quarter dipped to RM962.09mil from RM1.06bil a year earlier, mainly due to a decrease in subscription revenue and merchandise sales that was offset by an increase in advertising revenue.

Despite headwinds, Astro group chief executive officer Henry Tan said the group remains steadfast in executing its transformation plan and streaming aggregation strategy.

“Our average revenue per user improved to RM97.40, as customers migrate to the new and better value packages we launched last November.”

Commenting on its prospects, the group said it is committed to further enhance the “New Astro” experience to be “The Entertainment Destination for Malaysians.”

Astro said it will continue to invest in its transformation plans, in particular content, broadband, streaming, customer experience, data, addressable advertising and technology infrastructure to simplify its processes to better serve its customers.

“The Copyright (Amendment) Act 2022, which was gazetted in February 2022, is a major step forward in addressing digital piracy, resulting in criminalisation of the sale of illegal streaming devices and the distribution or sharing of unauthorised copyright content through applications, websites, and hyperlinks by any party through messaging applications or social media platforms.”

Having transitioned into the endemic phase, Astro said the nation’s economy is expected to recover.

“However, recovery is expected to be uneven with headwinds from intermittent Covid-19 waves, supply chain disruptions leading to cost-push inflation, further interest rate hikes and near term market volatility resulting from current geopolitical events.

“The group remains cautiously optimistic and will continue to monitor business conditions, whilst prudently managing costs.”

In a separate statement, Astro announced that it had appointed Tunku Ali Redhauddin Tuanku Muhriz as chairman, succeeding Tun Zaki Tun Azmi effective June 23.

Tun Zaki, who has served as chairman since its listing on Bursa Malaysia in 2012, retires upon the conclusion of Astro’s 10th AGM today.

Tunku Ali is currently an independent non-executive director on the board.

Astro also declared a first interim dividend of 1.25 sen per share, to be paid on July 20.

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