KUALA LUMPUR (March 21): Astro Malaysia Holdings Bhd saw its fourth quarter net profit drop 18.95% year-on-year amid lower revenue, while it recorded higher net financing costs, dragged by unfavourable unrealised foreign exchange losses from unhedged lease liabilities.

Earnings for the quarter ended Jan 31, 2024 (4QFY2024) fell to RM44.38 million from RM54.75 million in 4QFY2023, with earnings per share sliding to 0.85 sen from 1.05 sen, the pay TV service provider's bourse filing showed.

Quarterly revenue fell 13.63% to RM819.85 million from RM949.26 million, primarily due to lower subscription revenue, advertising revenue, sales of programming rights and rental income, and the ceasing of its Go Shop operations, which closed on Oct 11, 2023.

For its full FY2024, net profit fell 85.76% to RM36.88 million — its lowest since the group's listing in 2012 — from RM259.04 million a year ago, mainly due to lower earnings before interest, taxation, depreciation and amortisation or Ebitda.

Ebitda margin was impacted by higher broadband costs and staff-related costs as a result of a voluntary separation scheme and higher net finance costs due to unrealised forex losses from unhedged lease liabilities. Revenue slipped 7.58% to RM3.34 billion from RM3.62 billion.

Excluding the unrealised forex impact and post-tax VSS cost, the group said it recorded a full year net profit of RM181 million.

No dividend was declared for the quarter in review. The group paid 0.25 sen per share for FY2024 — also a record low — equivalent to a 31% payout ratio for its full year.

"Despite a rather turbulent economic landscape and the challenges of reinvention faced by PayTV operators globally, Astro remains resilient, implementing multiple initiatives that broaden our technology accessibility and convenience, as well as diversifying our business," said Astro group chief executive officer Euan Smith.

Smith also said the group continued to lead the content landscape in the country, "producing highly successful signatures and dramas which garnered great traction amongst our viewers".

Further on its outlook, the group cautioned that the strong US dollar will continue to impact multiple cost lines in its business, while local economic conditions exacerbated by geopolitical factors and softening customer sentiments — due also to the recent service tax revision — will also present challenges to the industry.

“In softening the impact of these challenges, we have introduced more affordable entry points on both PayTV & sooka to drive affordability during the last quarter, to further enhance the value of our products and services. Notwithstanding all this activity, the group continues to maintain a cautious outlook, carefully monitoring business conditions and ensuring effective cost discipline,” the group added.

Astro shares closed 3.28% or one sen lower at 29.5 sen — another historic low for the group — on Thursday, valuing the group at RM1.54 billion.