Astro Posts 35% Increase in PATAMI to RM442mn in H1FY18
Digital Transformation Driving Operational Efficiency
Astro Malaysia Holdings Berhad | Result highlights for the first six months of the financial year ending 31 January 2018 (H1FY18)
- Adex growth and strong cost discipline drives margin improvement and profits growth
- Revenue -2% y-o-y to RM2.75bn
- EBITDA +12% y-o-y to RM1.01bn
- PATAMI +35% y-o-y to RM442mn
- Strong FCF of RM723mn enables second interim dividend of 3 sen per share.
- NJOI underpins customer growth
- Total customers +6% y-o-y to 5.3mn
- ARPU rose to RM100.8, driven by take-up of value-added products and services
- Total Adex +4% y-o-y to RM351mn
- Continues to lead in share of TV Adex and Radex at 43% and 74% respectively.
Tun Zaki Azmi, Chairman of Astro, said: -
“In a challenging market, Astro is focused on delivering sustainable growth over the long term. Our businesses continued to be cash generative and the Board is pleased to declare a second interim dividend of 3 sen per share.”
Dato’ Rohana Rozhan, Group Chief Executive Officer of Astro, said: -
“Our diversified revenue streams across the TV, radio and digital platforms, Adex and e-commerce continued to show resilience. Margins and profits in Q2FY18 benefited from lower cost to serve and one-off savings arising from content secured on more favourable terms.”
“We continue to expand our reach by serving 5.3mn, or 72% of Malaysian households and increase our customer engagement with the 21mn individuals in these homes. Our home proposition achieved net growth of 288k driven primarily by NJOI net adds, and is on track for 90% reach within 5 years, reinforcing a strong base to serve. Our connected PVRs increased by 62% y-o-y to 639k, with cumulatively 7.1mn on demand videos watched. We are also encouraged by the reduction in Pay TV churn with ARPU at RM100.8.”
“Our singular focus now is to expand our household reach onto individual devices and developing meaningful personal relationships. Viewing across multiple screens and on demand consumption are gaining momentum. Astro GO grew its registered users to 1.3mn with an average of 235 minutes viewing time per week among active users.”
Astro is committing significant resources in investing and building a second to none individual relationships both in Malaysia and ASEAN. The company is continuously enhancing and evolving its products, delivery networks and customer experience. Its regional online video streaming service, Tribe has 1.9mn registered users in Indonesia, the Philippines and Singapore, and continues to gain steady traction with users watching 160 minutes of content weekly. Tribe was also recently soft-launched in South Thailand, catering to the Malay speaking Thais by offering Astro’s own content in Malay dramas, variety shows and movies.
Go Shop, Astro’s e-commerce service, has to date 1.2mn registered users in Malaysia and Singapore. Go Shop continues to grow from strength to strength with live shows featuring key talents and branded content resonating with customers. In addition, there has been an increasing number of customers shopping via the Go Shop app, which to date has garnered a total of 680k downloads.
Leading TV Viewership and Radio Listenership driving Adex Growth
Astro's TV viewership share gained one additional percentage point and is now at 77%. Average viewing time increased to 4 hours daily.
Rohana said, “We acknowledge the need to refresh our value proposition, enhance customer experience and product awareness across our platforms, and will do so as our priority, particularly in our on demand and Astro GO offerings. We are happy to report the positive response we had to key signatures like Game of Thrones achieving 700k on demand views and our coverage of the 29th SEA Games registering a record number of 11mn viewers, which form a solid base for exponential growth for us. Our signature vernacular IPs continue to resonate on all platforms. Hero Seorang Cinderella is the highest rated drama series year-to-date with 3.1mn TV viewership, 5mn digital views on Gempak and 32mn social media reach.”
Astro Radio leads with over 16mn listeners weekly across its nine radio brands while Astro’s digital properties attracted 6.7mn unique visitors and 60mn page views. With increasing reach on TV, Radio and Digital, Astro’s total Adex rose 4% y-o-y against the backdrop of a 7% market decline. Astro continues to grow its share of TV Adex and leads in Radex at 43% and 74% respectively.
Digitalisation is Key to Operational Efficiency and Achieving Scale for our Businesses
Rohana said, “We are on track to digitalise 75% of our operations by year-end. This imperative is key to boosting productivity, delivering greater efficiencies and improving customer experience. We have rolled out our digital customer acquisition and omni-channel customer engagement platforms, with the latter gaining significant traction and saw a self-service utilisation rate of 66%.”
Build Winning Content Verticals
Rohana said, “We are executing on our intention to own 50% of our content spend in original IPs by 2022. We intend to own deep verticals in premium Nusantara series, Horror, eSports, Kids and Islamic, often in conjunction with like-minded partners.”
H1FY18 revenue was lower primarily due to the end of a one-off sports channel sub-licensing, marginally lower contribution from subscriptions and e-commerce. This was partially mitigated by higher contribution from Adex, NJOI and production revenue. Going forward, the company expects revenue growth in the immediate term to be underpinned by e-commerce, Adex, production revenues and NJOI.
Rohana concluded, "We will continue to play and build on our strengths leveraging off new technologies to address a larger ASEAN market, thus delivering growth in reach and scale as an ASEAN digital-first content and consumer company, creating value for our shareholders."