Astro’s 1Q net profit drops 84% to RM16m, declares 0.25 sen dividend

KUALA LUMPUR (June 19): Astro Malaysia Holdings Bhd’s net profit dropped 84% to RM15.9 million in the first quarter ended April 30, 2023 (1QFY2024), from RM100.02 million a year earlier, as earnings were impacted by a higher unrealised foreign exchange loss.

This, the group said, was due to transponder lease liabilities amid the strengthening of the US dollar.

Nonetheless, the group's net profit would have been RM62 million for 1QFY24, excluding post-tax impact of unrealised forex loss due to mark-to-market revaluation of transponder-related lease liabilities.

Earnings per shares fell to 0.3 sen from 1.92 sen, the group's Bursa Malaysia filing showed.

Revenue decreased 7.38% to RM891.13 million from RM962.09 million in 1QFY2023, mainly arising from the decrease in subscription revenue, advertising revenue and merchandise sales.

Astro declared a first interim dividend of 0.25 sen per share, to be paid on July 18.

Compared to the immediate preceding quarter, the group’s net profit dropped 70.97% from RM54.75 million, while revenue fell 10.05% from RM990.67 million. Earnings per share stood at 1.05 sen in 4QFY2023.

Astro said FY2024 will see the group continuing the journey to be the "entertainment and streaming destination of choice" for Malaysians by investing in its transformation for long-term and sustainable growth.

This will encompass delivering the best content experience across all platforms, becoming Malaysia’s No 1 aggregator of the best streaming and lifestyle apps, and elevating local content with high production value and premium storytelling.

"Astro accounts for half of content investment in Malaysia, with the group’s local content capturing 77% of viewing share. We are reinventing our content proposition to meet the increasing demand for high quality local content on all screens," the group said in a statement.

Group maintains cautious outlook

Astro said macroeconomic headwinds, including slowing global growth, strengthening US dollar, relatively high interest rates, and moderate but elevated levels of inflation, are expected to continue impacting households and businesses.

"The group maintains a cautious outlook and will carefully monitor business conditions, whilst prudently managing costs," it added.

Astro noted that more piracy cases were heard in court in 2023, ruling firm in support of legitimate content creators and the content industry, following the landmark anti-piracy case that the group won in November 2022 against a commercial establishment in the Klang Valley area under the Copyright (Amendment) Act 2022.

“These rulings denounce content piracy as theft, illegal, and punishable by law, and are essential to create awareness and rightful content consumption behaviour. Ongoing efforts with authorities will continue and the group expects results of these to grow over time,” it said.

Astro group chief executive officer Euan Smith said the group's bold play book is transforming Astro into a digital, streaming company.

"About 25% of our customers are now enjoying our new streaming TV packs, which offer 11 premium streaming apps on top of our sparkling slate of Astro originals and live signatures, sports, movies, news and kids," he said.

Smith said Astro's new TV packs, which can be bundled with the group's own internet service, Astro Fibre, continue to see good take up.

"As such, our ARPU (average revenue per user) has grown by RM1.30 year-on-year (y-o-y) to RM98.70 in 1QFY2024. Astro Fibre had a great first year, driving our broadband base higher by 28% y-o-y. In a market where viewing share is dominated by local content, Astro is Malaysia’s largest content creator," said Smith.

Astro’s share price closed down half a sen or 0.75% at 66 sen on Monday (June 19), valuing the group at RM3.42 billion.