Astro posts RM1.31bil revenue in 1Q19

By Digital News Asia June 6, 2018

Market reach has grown 6% y-o-y to 5.5 million, or 75% of Malaysian households
Total adex of RM151 million in 1Q19 was driven by a 17% increase in TV Adex to RM83 million

Astro posts RM1.31bil revenue in 1Q19

ASTRO Malaysia Holdings Bhd posted RM1.31 billion in revenue for the first quarter of financial year 2019 (1Q19). Earnings before Interest, Taxes, Depreciation and Amortisation (EBITDA) stayed strong at RM461.3 million while Profit after Tax and Minority Interest (PATAMI) fell 11% year-on-year (y-o-y) to RM174.7 million.

Strong Free Cash Flow (FCF) of RM338 million, enables an attractive dividend yield with customer and Adex growth supported by scale and reach. Total customers rose 6% y-o-y to 5.5 million

Astro chairman Zaki Azmi, said: “In what continues to be an evolving and increasingly borderless media landscape, Astro is focused on delivering sustainable growth over the long term. We continue to be highly cash generative and disciplined in our cost and capital management. The board is pleased to declare a first interim dividend of 2.5 sen per share.”

Astro group chief executive officer Rohana Rozhan (pic), said: “We are strongly executing against our strategic imperatives to defend our market position, augment our business model to ensure best in class consumer engagement and expand for scale and growth. Our market reach has grown 6% y-o-y to 5.5 million, or 75% of Malaysian households.

“This is the result of our ability to defend and grow our customer base and reach, thus giving us a larger monetisable base across our verticals of pay, prepaid, ad sales, commerce and Go Shop.”

Astro saw an increase in TV adex of 17% y-o-y to RM83 million as well as of relatively new revenue adjacencies such as commerce and Go Shop, NJOI prepaid and digital adex; signifying encouraging trajectory as traditional subscription revenues are under competitive pressure.

The value of Astro’s products and services, quality entertainment for the whole family, increased seamless viewing, control and flexibility in how customers watch at home and on the go - have deepened the customers’ engagement with Astro via 23 million TV viewers, 16.5 million weekly radio listeners and 6.7 million monthly unique visitors on Astro’s digital properties.

Astro’s Connected Home Entertainment services recorded a strong growth of 52% y-o-y to reach 869,000 households with over 11 million On Demand programmes downloaded and watched.

Astro GO registered users increased by 43% y-o-y to 1.7 million with active viewers watching an average 203 minutes of content monthly.

Rohana said, “Astro is developing deep customer personas and data analytics to drive increased immersion and personalisation across its media assets, and at the same time, rationalising cost benefit of spent to address the potential wallet and advertisers for each customer persona.

“While focused on our strategic priorities, we have remained committed to our digital first transformation initiatives and a razor focus on cost management, which have created headroom for us to reinvest into creating more local and Nusantara content IPs that will underpin our Pay TV viewership and Tribe’s regional expansion.”

Driving new engines of growth

Astro started FY19 with another strong quarter of adex performance which outperformed the market, by registering a 6% growth y-o-y. Astro’s total adex of RM151 million in 1Q19 was primarily driven by a 17% increase in TV Adex to RM83 million, underpinning Astro’s strong share of 44% and 69% in TV adex and radex respectively.

The company is strengthening its consumer and digital data analytics capabilities to better serve its targeted consumer personas to enable greater personalisation and more compelling innovative propositions for its B2B and B2C customers.

Astro’s e-commerce business registered good performance this quarter. Go Shop saw its 1Q19 revenue rising by 35% y-o-y to RM84 million, spurred by its growing base of customers in Malaysia and Singapore, mainly driven by its product mix, analytics driven campaigns and innovative show formats.

Astro’s other growth engines like production, theatrical and talent have collectively grow by RM10 million y-o-y to RM20 million.

Astro’s regional online video streaming service, Tribe, continues to grow in Indonesia, the Philippines, Thailand and Singapore by forging complementary win-win partnerships in the region.

In April, Tribe started to offer its content as part of Indonesia-based Telkomsel’s bundled video streaming product, giving Tribe the opportunity to tap into Telkomsel’s strong customer base.

Investing in vernacular and local content

Astro’s collective strength in talent and vernacular IPs, its brands, its customer reach and engagement across its media assets lends the company a unique and differentiated edge to sustain strong demand amongst all Malaysian customer personas.

The company will build on these strengths, for example, the Karangkraf JV in creating a deeper engagement with the Malaysian customers.

Astro’s 51% JVCo with Karangkraf, Nu Ideaktiv is slated to premier its inaugural TV shows based on popular content IPs, namely ‘Mingguan Wanita’, ‘Pa & Ma’ and ‘Rasa’ in July, with accompanying apps by year-end.

Astro’s investment into Nu Ideaktiv is aimed at deepening its content offerings for the Malay-language segment in Malaysia and Nusantara. In addition, the company has added Karangkraf’s 15 content IPs to grow its partner network to 50 digital brands.

Reclaiming the premium segment

Rohana said: “We are excited to bring 2018 FIFA World Cup Russia, this year’s largest sporting event globally, to all Malaysians. The 2018 FIFA World Cup will mark our commitment to reclaim our premium customer personas like never before. All 64 matches will be seen LIVE in HD, of which 37 are exclusive to Astro on TVs and smart devices via Astro GO, NJOI Now and Stadium Astro apps, as well as on-ground activities such as viewing events. Football fans can also enjoy an immersive World Cup 2018 experience via the Stadium Astro Virtual Reality app. As sports is live and social, Astro is partnering with Twitter to provide ‘near-live’ World Cup clips and content on @stadiumastro to spark real-time conversation among Malaysians on social media.”

This will be followed by broadcast of EPL in Ultra HD in October 2018. In total Astro expects to launch four Ultra HD channels comprising live sports and general entertainment.