Astro Q1 net profit slips 3% on higher content, finance costs

PETALING JAYA: Astro Malaysia Holdings Bhd reported a 3.1% decline in net profit to RM195.82 million for the first quarter ended April 30, 2017 against RM202.17 million in the previous corresponding period, due to higher content and finance costs.
Revenue fell 2.7% from RM1.36 billion to RM1.33 billion on the back of decrease in licensing, subscription and advertising revenue.
Astro has proposed to declare an interim dividend of 3 sen per share.
The group said in a filing with the stock exchange that the drop in licensing revenue was due to loss of content recovery for sports channels; the decrease in subscription revenue was mainly dragged down by lower package take-up; while lower advertising revenue was due to Chinese New Year advertisement spending recorded in the corresponding quarter.
It noted that higher net finance cost was due to lower unrealised forex gain arising from unhedged non-current balance sheet liabilities comprising finance lease liabilities and vendor financing.
Astro is cautiously optimistic for the rest of the financial year, despite relatively subdued consumer sentiment.
As the operating environment is facing disruption, the group is re-positioning its business with emphasis towards personalisation, mobility and interactivity with customers.
The group also continues to actively manage its key operating expenses particularly content costs, which are substantially US dollar denominated and optimising its cost to serve.
“On the basis of the above, the board believes the group will remain cash generative and will focus on investing in our growth strategy,” it said.