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Malaysian pay-TV firm Astro posts 4% revenue increase amid ‘challenging environment’

Astro logoPay-TV giant Astro has reported a four per cent increase in revenue for the first half of the financial year in what the company describes as a “challenging operating environment” in its home market of Malaysia.

Group revenue climbed to RM2.7 billion (US$630 million), a four per cent increase for the first six months of the financial year ending 31 January 2016.

EBITDA (earnings before interest, tax, depreciation and amortisation), usually the fairest reflection of a company’s growth, was up seven per cent to RM962 million.

The company saw a one per cent fall in the take-up of HD, but all other key indicators were up, particularly Njoi, Astro’s free package, which was highlighted as a growth area by Astro’s COO Henry Tan in an interview with Mumbrella last month. That growth now means Astro has a household TV penetration of 65 per cent in Malaysia, up from 60 per cent a year earlier.

Astro’s Q2FY16 key performance indicators:

Source: The company

Source: The company

Advertising revenue was up by five per cent, according to the company CEO Dato’ Rohana Rozhan.

She said in a press statement: “Advertising income registered a 5% growth to RM305mn, supported by higher TV viewership, radio listenership and growing interest in digital. Astro’s share of TV Adex and Radex increased to 35% and 61% respectively. Greater utilisation of analytics and close collaboration with our key advertisers and media buyers has also contributed to growth in our share of Adex.”

The results come two months after Astro launched a new TV measurement system, DTAM, to address perceived limitations in the existing system, which is seen to underestimate the reach of television in Malaysia.

Rohana also pointed to the uptake of the company’s on-demand service Astro on the Go, which saw downloads increased by 31 per cent year on year, and Go Shop, Astro’s e-commerce venture. A Chinese language Go Shop channel is to launch later in the year, she said.

Tun Zaki Azmi, chairman of Astro, commented in summary: “Amidst a challenging operating environment coupled with soft consumer sentiment, the Group continues to deliver on its growth strategies to generate shareholder value creation. On that note, the Board is pleased to declare a second interim dividend of 2.75 sen per share, 22 per cent higher compared to the same period last year.”

Rohana Rozhan

Rohana Rozhan

Rohana added: “Our commitment to top line growth is matched by our commitment to remain active managers of our costs. Our content forex exposure for the year, and into the first quarter next year is fully hedged, giving us time to evaluate and put in place measures to manage the impact of prevailing rates. Our priority is to ensure an optimal cost base to provide the best value for our customers. Astro aims to achieve sustainable growth in a challenging environment by growing our subscriber base, share of advertising and e-commerce. Underpinned by strong execution and cash generation, we are committed to deliver on our dividend policy.”

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