Astro Posts Earnings Rebound in 3Q

Astro Malaysia Holdings Berhad | Results highlights for the third quarter of the financial year ending 31 January 2019 (Q3FY19)

  • Q3FY19 PATAMI +5% y-o-y to RM153mn; lifted by a rebound in Adex and supported by other revenue contributors including eCommerce and theatrical sales
  • Revenue resilient at RM1.4bn
  • Cost discipline underpins higher EBITDA; +13% y-o-y to RM473mn
  • Strong FCF of RM1.1bn enables third interim dividend of 2.5 sen per share
  • Pay TV ARPU flat q-o-q at RM99.9

Tun Zaki Azmi, Chairman of Astro, said: “In a competitive media landscape, Astro continues to be cash generative, cost disciplined and proactive in its capital management. The Board is pleased to declare a third interim dividend of 2.5 sen per share.”

Henry Tan, Chief Executive Officer designate of Astro, said: “Overall, we’ve had a decent quarter predicated on our strong market reach which has grown 6% y-o-y to 5.7mn customers, or 76% of Malaysian households, enabling better monetisation across our verticals of pay, prepaid, Adex and eCommerce.

We saw increased Adex with the biggest growth coming from digital. We are encouraged by the growth of relatively new revenue adjacencies such as eCommerce, licensing income and theatrical sales; signifying encouraging trajectory as traditional subscription revenues remain under competitive pressure. The group registered higher EBITDA and PATAMI during the quarter, underpinned by efforts to optimise key operating expenses including content costs and cost to serve.”

Deeper Customer Engagement Across Platforms
Astro continues to increase engagement across all platforms, reaching 23mn TV viewers, 16.2mn weekly radio listeners, 7.3mn monthly unique visitors on its digital platforms and 1.6mn shoppers. Astro’s connected boxes increased by 37% y-o-y to 963,000 households with over 38mn On Demand programmes watched while registered Astro GO users grew by 38% y-o-y to 2.1mn.

A Sterling eCommerce Performance
Go Shop saw its customer base grew by 35% y-o-y to 1.6mn and recorded its highest ever quarterly revenue at RM98mn. Go Shop will continue to provide value, increase its product variety and create more entertaining content to cater to different customer segments.

Recovery in Adex
Adex staged a strong quarterly recovery of 11% to RM179mn, with a 40% growth in digital Adex to RM14mn. Better Adex performance was underpinned by resumption of advertising spend post tax holiday period. Astro’s compelling content continues to drive viewership making Astro increasingly attractive to advertisers with TV viewership share at 75% and radio listenership at 16.2mn. Astro’s share of TV Adex and Radex remained strong at 43% and 74% respectively, while share of digital Adex stood at 4%.

Local Box Office Sets New Benchmark; Rivalling Hollywood Blockbusters
Astro’s push for local movies have seen both critical and commercial success. Its most ambitious project to date, Polis Evo 2, recently premiered in Malaysia, Singapore and Brunei and will hit the Indonesian cinemas soon. This co-production with leading Indonesian content company, PT Surya Citra Media Tbk, has already garnered an initial box office of RM17mn.

Astro’s 2018 releases include Paskal The Movie and Hantu Kak Limah, which grossed RM30mn and RM38mn respectively; beating latest Hollywood blockbusters; Mission: Impossible – Fallout and Marvel’s Deadpool 2.

Netflix Buys Worldwide Rights for Astro’s Original Series, Demon’s Path
Astro is pleased to announce that Netflix has acquired the worldwide rights for its first Hong Kong original drama series, Demon’s Path. The 13-episode drama series will be available to Netflix subscribers worldwide (except in China) this month.

eGG Network hosts The Kuala Lumpur Major, the Biggest Esports Event in Malaysia
Recently eGG Network partnered international esports tournament companies, PGL and Imba TV to host The Kuala Lumpur Major, a world-class esports tournament which received overwhelming response from Dota 2 fans, clocking over 7mn total hours of views.

Building a Stronger Astro
Henry Tan said: “In light of the challenges, we are implementing a strategic review of our business and organisational structure; including deeper cost rationalisation and workforce optimisation, which will incur one-off costs in the coming months. This exercise will enable us to remain competitive, efficient and agile so we can pursue opportunities in key growth areas such as broadband, membership and rewards, production of premium content, Adex and eCommerce.”

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