Astro expects ‘decent’ single-digit advertising revenue growth

KUALA LUMPUR: Astro Malaysia Holdings Bhd, which is looking to go down the digitalisation route, sees “decent” single-digit advertising revenue growth for the first half of the year after a soft first quarter.

Speaking to reporters after the group’s AGM on Thursday, Astro COO Henry Tan said it will be supported by a rebound in advertising expenditure (adex) from the second quarter, as well as festive season in the current quarter.

Despite a 10% adex drop experienced by the market, particularly in the radio and television space, he said Astro was only dragged down by 5% in terms of advertising revenue.

Going forward, Astro will be placing an emphasis on the digital advertising space, which it sees as an area of growth. Currently, the digital advertising space contributes about 5-5.5% of advertising revenue.

“For instance, this year we have given ourselves a clear target that 75% of all our legacy system or platforms will be digital by end of this year,” said CEO Datuk Rohana Rozhan.

She went on to say that with digitalisation, the group has been seeing as much as 75% cut in its capital expenditure for content to RM500 million per annum compared with the previous RM1.8 billion to RM2 billion.

Looking ahead, Astro is expecting a strong growth amid a formidably challenging market place.

“We are still going to grow in terms of household penetration predominantly driven by Njoi, with top line driven by adex as well as home shopping, and we are also going to maintain or cut content costs less,” Rohana said.

This, she said will also be supported by the new revenue stream the company has cultivated in the form of its start-ups.

Astro saw a 3.1% decline in net profit to RM195.82 million for the first quarter ended April 30, 2017 against RM202.17 million last year.