Astro full-year earnings within analysts' estimates
By Goh Thean Eu April 1, 2014
- Astro full-year profits within analysts’ estimates
- Revenue growth driven by strong subscription, adex
[RM1 = US$0.31]
The net profit is well within the range of most analysts’ expectations. RHB Research had expected the pay-TV operator to post a net profit of RM437 million, MIDF forecasted RM432 million while Hwang DBS Vickers had an estimate of RM466 million.
According to Astro, its “disciplined” cost-management initiatives resulted in lower cost of sales and lower staff related costs as a percentage of revenue.
For the full year ended Jan 31, 2014 (FY14), its revenue also grew by 12% to RM4.79 billion. This was mainly driven by an increase in subscribers, advertising and other revenue.
The year also saw an increase in average revenue per user (ARPU) to RM96, versus RM93.20 in FY2013. This means that Astro customers, on average, spent more on their pay-TV bills during this financial year as compared with the previous financial year. As a result, its subscription revenue rose 9% to RM3.99 billion.
“We have delivered four consecutive quarters of double-digit revenue growth in FY14, underpinned by [the] expansion of our customer base, higher take-up of value-added products and services, as well as industry-leading adex (advertising expenditure) growth,” claimed its chief executive officer Rohana Rozhan.
During the year, Astro grew its subscriber base by 400,000 to 3.9 million, comprising 3.44 million pay-TV subcribers and 442,000 Njoi subscribers. This translates to a 56% Malaysian TV household penetration rate. [Njoi is the company's subscription-free satellite TV service)].
The company also managed to grow its advertising revenue by 17%, above the industry average, to RM582 million. From the amount, TV advertising revenue was RM335.2 million while radio advertising revenue was RM246.8 million.
New services drive growth
One of the drivers for stronger revenue growth was the increasing take-up of its newer services, such as the HD (high definition) and PVR (personal video recorder) services.
During the year, customers on the Astro B.yond platform grew by 47% to 2.88 million, of whom 1.67 million also signed up for the HD service and another 532,000 for the PVR service.
“We are focused on enhancing our digital proposition. Our ambition is to be the No 1 digital platform for ‘Watch, Listen, Read and Play’ by becoming the platform of choice for Malaysians to consume their favourite media in a seamless manner across all devices,” declared Rohana.
She said that Astro On-The-Go (AOTG) continues to do well. So far, downloads have more than doubled to 847,000, compared with the 398,000 downloads it registered a year earlier. The AOTG average weekly viewing time also doubled from 35 minutes in FY13 to 72 minutes in FY14.
“Our new value-added products and services such as Value Packs, focused on vernacular offerings, is driving strong customer take-up, whilst our prepaid offering Njoi continues to receive strong response from consumers,” Rohana said.
She added that the company will be also banking on major sporting events to keep its growth momentum going.
“To continue providing the best content for our customers this year, the group will be focusing on key sports content given that the line-up of key sporting events tends to attract a good following amongst our sports subscribers,” she said.
The company’s shares on Bursa Malaysia ended the day (Monday) one sen (0.31%) higher at RM3.20 a share. More than 4.87 million shares changed hands. So far this year, Astro shares have appreciated by 20 sen or 6%.
The company also declared a fourth interim dividend of two sen per share and proposed a final dividend of one sen per share, subject to shareholders’ approval. This brings the total dividend for the year to nine sen per share or more than RM400 million.
Meanwhile, chief operating officer Henry Tan said that Malaysians have turned to its homegrown news channel AstroAwani for updates relating to the missing Malaysia Airlines MH370 flight.
“We saw that channel share grew by 10 times during this period,” he claimed.
Traffic for its homegrown news content has also spiked to more than 22 million unique visitors in March, compared with 3.2 million unique visitors in February.
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