KUCHING: Astro Malaysia Holdings Bhd (Astro) is poised to register a middle single digit revenue growth in financial year 2017 (FY17) ending Jan 2017.
Following a company’s briefing, analysts were confident that the pay-television operator can achieve the top line growth supported by home shopping business and the company’s free satellite TV service subscription, NJOI.
The research arm of Public Investment Bank Bhd (PublicInvest Research) in a report yesterday said Astro will focus on NJOI’s growth which can be monetised later through prepaid charges or conversion to pay-TV subscribers.
The company hopes to add on 350,000 to 400,000 of new NJOI subscribers in FY17.
It also expects advertising revenue to register a growth of fiver per cent and its home shopping channel to register revenue of RM350 million in the next financial year.
Astro has forecasted the company’s average revenue per unit (ARPU) to improve to RM101 on upselling value-added products and potential rationalisation of its packages and pricing mainly on sports content.
Nevertheless, RHB Research Institute Sdn Bhd (RHB Research) in another report said it remained cautious on the 2016 outlook for the media sector owing to the subdued Malaysian consumer sentiment as shown by Malaysian Institute of Economic Research (MIER) Consumer Sentiment Index which hit an 18-year low of 63.8 points in Dec 2015.
In spite of that, the research firm observed that Astro’s home shopping venture, Go Shop, has registered better-than-expected progress, serving 410,000 customers while generating RM189 million revenue in FY16 ended Jan 2016.
Thus, the research firm continued to like the electronic-commerce business of the pay-TV operator as a segment of revenue diversification and forecasted that the venture could contribute as much as RM400 million by FY18 ending Jan 2018.
It noted the company aims for the home shopping business to break even in FY17.
Meanwhile, Astro told Bursa Malaysia on March 22 that its earnings for the fourth quarter financial year 2016 (4QFY16) ended Jan 2016 jumped by 45.5 per cent year-on-year (y-o-y) to RM203.77 million from RM139.97 million in 4QFY15 ended Jan 2015.
The pay-television operator explained that the increased in net profit for 4QFY16 was attributed to increase in earnings before interest, tax, depreciation and amortisation (EBITDA) of RM27 million, lower net finance cost by RM30 million due to lower unrealised foreign exchange loss arising from unhedged finance lease liability of RM19.4 million and unhedged vendor financing of RM34.7 million.
Nonetheless, Astro noted the higher earnings was offset by an increase in transponder’s lease interest of RM6.8 million and increase in share of post-tax result from investment accounted for of RM12.9 million, offset by higher tax expenses by RM11.2 million.
Revenue in 4QFY16 increased by 3.9 per cent y-o-y to RM1.4 billion from RM1.35 billion in 4QFY15.
The higher revenue was due to an increase in subscription, advertising and other revenue of RM7.8 million, RM24.8 million and RM21 million respectively.
