Update Astro 2Q profit rises 5%, pays 2 sen dividend

by **Cals** Thu 12 Sep 2013, 00:32

Update Astro 2Q profit rises 5%, pays 2 sen dividend
Business & Markets 2013
Written by Chong Jin Hun of theedgemalaysia.com
Wednesday, 11 September 2013 18:03

KUALA LUMPUR (Sept 11): Astro Malaysia Holdings Bhd reported a 5% rise in second quarter net profit from a year earlier mainly on the pay-television (TV) operator’s significantly lower finance cost.

In a statement to the exchange today, Astro said net profit rose to RM98.83 million in the quarter ended July 31, 2013 (2QFY14) from RM94.47 million. Revenue climbed to RM1.19 billion from RM1.07 billion.

"This (revenue increase) was mainly due to the increase in subscription revenue and advertising revenue of RM89.3 million and RM12.4 million respectively.

"The increase in subscription revenue is attributed to both an increase in ARPU (average revenue per user) for pay-TV residential subscribers of RM3.10 (from RM91.80 to RM94.90) and an increase in number of pay-TV residential subscribers by 193,200 from 3,165,600 to 3,358,800," Astro said.

The company said it had registered finance cost of RM88 million in 2QFY14 compared to RM105.4 million previously. Lower finance cost had mitigated the impact of depreciation of set-top boxes of RM58.5 million and higher amortisation of software at RM11 million, it said.

Astro’s cumulative 1HFY14 net profit however fell to RM212.97 million from RM216.75 million. This came on higher revenue of RM2.31 billion versus RM2.05 billion.

The firm plans to reward shareholders with a dividend of two sen a share for the quarter in review.

Looking ahead, the group said its Astro B.yond conversion and targeted customer acquisitions will have an impact on the firm's profit margins in FY14.

Astro however expects the situation to normalise. The group said it is mindful of its operating expenses which include content cost.

"The adex (advertisement expenditure) performance continues to outperform the industry’s growth rate, underpinned by its increasing reach and relevance to advertisers given strong TV viewership and radio listenership.

"Combined with the availability of new platforms across TV, radio and digital media, the group expects its comprehensive marketing solutions to generate adex growth for the industry," Astro said.

Astro said it believes that the group will continue to be cash generative. Given its financial strength, the company said it will be able to invest in its growth strategy, and pursue progressive dividend policy.