Update Star 2Q profit jumps 38% to RM39.38 mil, declares 9 sen dividend

by **Cals** Mon 18 Aug 2014, 22:28

Update Star 2Q profit jumps 38% to RM39.38 mil, declares 9 sen dividend

Business & Markets 2014

Written by Kamarul Anwar of theedgemalaysia.com

Monday, 18 August 2014 19:56

KUALA LUMPUR (Aug 18): Star Publications (Malaysia) Bhd saw a 38% jump in its net profit for the second quarter ended June 30, effectively breaking the streaks of declines in the previous three quarters thanks to greater revenue contribution from its print, digital, and event segments.

The media company reported a net profit of RM39.38 million on revenue of RM274.53 million for 2QFY14, compared with net profit of RM28.54 million and turnover of RM251.32 million for 2QFY13.

“Group revenue in 2QFY14 increased by 9.23% ... mainly due to higher revenue contribution from print, digital, and event segments,” Star explained in a filing with Bursa Malaysia.

Along with a higher net profit, Star declared a dividend totalling nine sen per share. This comprised a first interim dividend of six sen and a special tax-exempt dividend of three sen. At this time last year, Star’s dividend stood at six sen.

Star’s biggest revenue contributor, the print and digital segment, saw a 4.4% increase in revenue to RM193.44 million mainly due to higher advertising revenue as 2QFY14 saw an improved market sentiment, the group said.

“The profit before tax for this segment also improved by 15.3% as compared to the last corresponding quarter,” Star added.

However, Star’s event, exhibition, interior and thematic segment saw the biggest top line growth in relative terms in the quarter. According to the group, the segment had revenue of RM63.76 million in 2QFY14. This represented a 30.87% increase from the previous year’s RM48.72 million.

Star attributed this increase to the exhibition and interior projects completed by its unit Cityneon Holdings Ltd. Another unit part of the event segment, I.Star Ideas Factory Sdn Bhd, also had an additional exhibition show in Penang.

“This segment’s profit before tax improved to RM6.68 million mainly due to better gross margins from Cityneon in the current quarter under review,” Star added.

Star’s loss-making segments, namely radio broadcasting and television channel, also recorded higher revenues, said the group.

Star’s surprising 2QFY14 financial performance resulted in the group narrowly escaping from having a cumulative net profit contraction. In the first half of FY14, Star’s net profit was RM55.64 million or 7.54 sen per share. This was 1.86% higher than the previous corresponding period’s RM54.62 million or 7.4 sen per share.

Revenue for 1HFY14 was RM485.67 million, up 2.91% from RM471.94 million a year ago.

However, Star’s 2QFY14 financial statement showed its operating and net margins were slightly lower year-on-year in 1HFY14. The operating margin was 16.43% while net margin was 11.46%, compared to 17.26% and 11.57% in 1QFY14.

Star expected a “fairly steady” outlook for advertising expenditure (adex) growth for the remainder of 2014,

As for its events and exhibition business segment, Star said Cityneon will seek out more opportunities in China and Southeast Asia, especially for the thematic and interior design businesses.