Pay-TV operator Astro's profit jumps ten fold for Q2 to RM169.3m

Yiswaree Palansamy
Astro Malaysia Holdings Bhd reported RM16.58 million net profit in the second quarter of last financial year. ― Reuters pic

KUALA LUMPUR, Sept 12 ― Astro Malaysia Holdings Bhd's net profit for the second quarter ended July 31, 2019 (Q2 2020) jumped by more than 10 times to RM169.3 million, contributed by lower content costs and reduced marketing and distribution expenses.

The pay-TV operator reported RM16.58 million net profit in the second quarter of last financial year. For the same period, profit after tax and minority interest (PATAMI) jumped 920 per cent year-on-year to RM169 million, underpinned by cost discipline measures, Astro said in a statement released today.

Revenue for Q2 2020 decreased 12.7 per cent to RM1.24 billion from RM1.42 billion, predominantly due to a decrease in subscription revenue and licensing income.

“In a competitive media landscape, Astro remains highly cash generative, cost disciplined and proactive in its capital management,” Astro chairman Tun Zaki Mohamed Azmi said, adding that the company declared a second interim dividend of 2 sen per share.

Astro chief executive Henry Tan meanwhile said the company's strong PATAMI was driven by rigorous cost discipline to optimise content spend and operating expenses.

“Concurrently, we are putting in place building blocks for new revenue adjacencies, specifically in broadband and content bundles with Maxis and in over-the-top (OTT) through our strategic partnerships with iQIYI and HBO Asia; with more partnerships in the coming months,” Tan said.

According to Astro, it is currently available in 5.7 million, or 76 per cent of Malaysian households, with its signature vernacular and premium content, as well as the biggest live sports telecast on its Pay-TV and NJOI platforms.

NJOI is an over-the-top service that provides complete and free access to a selection of TV channels such as Astro Awani, Astro Prima, Astro AEC among others, and video-on-demand (VOD).

“Astro’s TV viewership share is market leading at 75 per cent. Over one million connected set-top-boxes, up 11 per cent year-on-year, drove growth in On Demand video downloads by 38 per cent to 33 million and average weekly viewing by 11 per cent to 462 minutes,” the company said in the statement .

While Astro’s total advertisement expenditure (adex ) in the first half of financial year ending January 31, 2020 (1HFY20) declined by 3 per cent to RM302 million, it outperformed industry adex, which saw a 5 per cent contraction.

Moving forward, Astro said the market remains challenging with structural changes in the global content, media and advertising industries, including threat of piracy.

“Astro’s focus is to strengthen its core pay-TV and NJOI businesses by redefining customer value propositions, elevating customer service and refreshing content. The company will leverage on its customer base to build new revenue adjacencies in broadband, OTT, digital and commerce,” the company said, adding that cost optimisation efforts will continue.

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