Media Prima sees profit rise in 2Q on lower opex, higher advertising income

KUALA LUMPUR (Aug 24): Media Prima Bhd’s net profit for the second quarter ended June 30, 2022 (2QFY22) rose 17.91% to RM15.82 million from RM13.42 million in the same period last year, despite lower revenue, supported by lower operating expenses and higher advertising income.

Revenue dropped 10.9% to RM260.58 million from RM292.45 million in the same period a year ago, dragged by lower sales of home shopping goods, content and newspaper. In the same period, operating expenses dropped to RM215.54 million from RM250.28 million, its bourse filing showed.

Earnings per share climbed to 1.43 sen, from 1.21 sen. No dividend was declared.

According to Media Prima, the group's advertising revenue grew 4% year-on-year, contributed by increased advertising income from five out of its six business segments, namely: digital media, broadcasting (radio and television), publishing, out-of-home and Omnia — its integrated solutions provider that offers creative services and marketing solutions across the group's platform.

In terms of segmental revenue, four segments — Omnia, out-of-home and digital media, and broadcasting — saw growths.

Omnia reported a revenue increase of 20% — partly due to advertising revenue from its out-of-home platform not being reported under Omnia in 2QFY21. Excluding the out-of-home platform, the segment still registered a revenue increase of 6%.

Out-of-home segment, meanwhile saw a 13% rise in revenue, reflecting a gradual return in demand for out-of-home advertising during the current quarter, while digital media and broadcasting saw revenue growth of 9% and 4%, respectively.

Its publishing and home shopping segments, however, reported revenue declines of 8% and 44%. While publishing saw an increase in newspaper advertising revenue, lower newspaper circulation and printing services dragged its performance. Home shopping, on the other hand, was affected by subdued consumer sentiment and more cautious spending as the country transitioned into the endemic phase for Covid-19.

For the first six months of FY22, Media Prima’s net profit rose 17.06% to RM21.85 million from RM18.66 million — though revenue fell 7.12% to RM508.05 million from RM546.98 million — thanks to lower opex and other depreciation, as well as stronger other operating income.

Looking ahead, Media Prima said its Omnia’s integrated marketing solutions has benefitted the group’s advertising performance and will continue to be a key strategic driver of its performance.

The group is expecting a gradual recovery in demand for several of its advertising platforms, especially its broadcasting and out-of-home platforms, which were impacted by movement control orders in the past two years.

“Investments in premium localised content is pivotal for the group in meeting the growing demand for quality content for its own platforms and other major streaming platforms, further reiterating the group’s commitment to grow its content investment as an earnings driver,” it said.

Media Prima is also looking to move forward with the next phase of WOWSHOP, which involves revamping the group’s e- commerce capabilities and Malaysians’ preference for in-store shopping, following the opening of the economy.

As such, it will look out for more strategic collaborations, while elevating its competitive advantage, particularly in the digital sphere.

Shares in Media Prima closed three sen or 6.59% higher at 48.5 sen on Wednesday (Aug 24), giving the group a market capitalisation of RM538 million.