Astro Malaysia expects continued growth in FY2016 despite challenges

BUKIT JALIL: Astro Malaysia Holdings Bhd, which saw its earnings before interest, taxes, depreciation and amortisation (ebitda) and revenue increase 12% and 9% respectively for the financial year ended Jan 31, 2015 (FY15), expects to see a similar trajectory in FY16.
Its CEO Datuk Rohana Rozhan said it still sees strong growth in the group, from products such as Njoi, its free satellite TV proposition, its pay-TV and Astro on the Go platforms.

"This year, we expect almost the same trajectory as last year. It remains however, very challenging and a soft marketplace. But because we have the ability to address the market in a wide basis, with a whole range of services that consumers can choose from, the same trajectory for revenue and ebitda will hold through," she told a press conference after announcing its financial results here yesterday.
On the implementation of the Goods and Services Tax (GST), she said it is still early to assess the impact and that Astro has no clarity on the matter at the moment. Hence, it will be working closely with the Royal Malaysian Customs and Inland Revenue Board.

"Like any business, these are managed over time. There is a lot of dynamics to the business and various components to the cost. For example, Astro has technology, IT, content, production and services input so all will be taken as a whole. For us, it's business as usual. Our challenge is to give the best value to consumers."

She also pointed out that 60% of the RM1.7 billion to RM1.8 billion content cost are US dollar denominated, so a weaker ringgit means higher costs.

"We're prudent in treasury management and for this year, we're fully hedged, below the current prevailing rates." said Rohana.

For the fourth quarter ended Jan 31, 2015, Astro's net profit rose 25.7% to RM139.97 million from RM111.39 million a year ago, mainly due to increase in ebitda, lower depreciation costs of property, plant and equipment and amortisation costs of software.

Its revenue increased 7% to RM1.35 billion from RM1.26 billion mainly due to an increase in subscription and other revenue.

For FY15, net profit jumped 16% to RM519.37 million from RM447.95 million in FY15 mainly due to an increase in ebitda, which rose 12% to RM1.81 billion, and lower net finance costs; while revenue grew 9.2% to RM5.23 billion from RM4.79 billion.

Astro's performance was underpinned by expansion in customer base. Sales of value-added products and services also increased the average revenue per user, and control of costs resulted in improved profitability. The performance of new home shopping service Go Shop was also encouraging.