Astros FY18 PATAMI 24% to RM771mn Date Released:28 Mar 2018
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Total customers 7% to 5.5mn, driven by NJOI
Astro Malaysia Holdings Berhad
Result highlights for the financial year ended 31 January 2018 (FY18)
Astro showed resilience in a challenging market throughout the year, outperforming local and international peers with a 24% y-o-y growth in PATAMI to RM771mn, mainly due to higher EBITDA and favourable forex gain
Revenue -1% y-o-y to RM5.53bn
EBITDA 0.2% y-o-y to RM1.82bn
Strong FCF of RM1.36bn enabled fourth interim dividend of 3 sen per share and final dividend of 0.5 sen per share
Customer and Adex growth supported by NJOI
Total customers 7% y-o-y to 5.5mn
Best in class churn rate of 9.6%
Achieved ARPU of RM99.9
Total Adex 2% y-o-y to RM722mn
Go Shop grew 11% in revenue to RM290mn
Tun Zaki Azmi, Chairman of Astro, said: In a challenging business environment, Astro continues to deliver profits growth and strong cashflow generation. The Board is pleased to declare a fourth interim dividend of 3 sen per share and to recommend for shareholders' approval a final dividend of 0.5 sen per share.
Dato' Rohana Rozhan, Group Chief Executive Officer of Astro, said: The media landscape is undergoing aggressive shift towards digitalisation. In FY18, we accelerated our transformation to complement and enhance our skills, agility and capabilities as a consumer and content company. We executed strongly on key imperatives to transform Astro as a digital and data-driven company, to optimally invest and monetise our media assets, to achieve cost efficiencies through scale and best practices, to build on customer engagement by deepening our strengths in vernacular verticals, and to build a robust innovation pipeline. Last year's results were a culmination of this focus, delivering record profitability, even as revenue came under pressure given soft consumer sentiments and competitive headwinds.
Customers: Increased Reach and Deeper Engagement
Astro's total customers grew by 7% y-o-y from 5.1mn to 5.5mn, an increased TV household reach from 71% to 75% in FY18, primarily driven by NJOI. At the same time, NJOI's revenue grew by 21% y-o-y to RM100mn, as its skinny bundles and ala carte prepaid choices gained traction. Pay TV remains resilient despite competition, with global best in class churn of 9.6%, ARPU of RM99.9 and incoming ARPU of RM67.7.
Rohana said: Contrary to expectations in the era of cord-cutting, we are seeing deeper engagement with our customers across all our media assets; 23mn individuals in Astro households, 16.5mn radio listeners and 6.9mn average monthly unique visitors on Astro's digital properties. The number of households with connected PVRs have increased by 59% y-o-y to 804k and they are watching an average 50 hours of content weekly and downloaded 23mn On Demand programmes in FY18. Astro GO and NJOI Now apps are providing customers content mobility. As a result, Astro GO registered users increased by 45% y-o-y to 1.6mn; with active viewers watching an average 247 minutes of content weekly. This gives us the ability to optimally market and monetise innovative products and services personalised for households, individual customer personas and advertisers.
Adex: Achieved Growth in a Soft Market
Total Malaysia's Adex declined by 8% y-o-y from RM4.9bn to RM4.5bn. Astro's total Adex however, registered a 2% growth y-o-y from RM705mn to RM722mn. This includes Digital Adex which grew 17% from RM30mn to RM35mn. This leads to a share of 44% and 74% in TV Adex and Radex respectively. This trajectory is expected to continue with focussed efforts on providing solutions to both agencies and advertisers alike, driven increasingly by customer persona data.
Content: Focused on Vernacular, Nusantara Premium Originals and Live Sports
Rohana said, Our content cost of RM1.6bn in FY18 was 33% of our TV revenue and was within our guidance of between 32% and 35%. In major sporting years such as 2018, content cost is expected to be approximately two percentage points higher. In light of global competition, we have renegotiated key international content to ensure we aggregate choice content for our customers, encompassing all the requisite rights for On Demand, increased portability and box sets whilst securing better economics given these rights are rapidly being commoditised. At the same time, we have reinvested these savings into our content by deepening our commitment to vernacular and regional content, particularly in signature, premium local and Nusantara IPs as they clearly differentiate our product proposition vis a vis global competitors.
To this end, Astro has entered into win-win partnerships with local and regional content powerhouses such as Grup Majalah Karangkraf and Emtek, as well as talents, award-winning directors and producers like Ifa Isfansyah and Salman Aristo from Indonesia, Kiatkamon Iamphungporn from Thailand and Bianca Balbuena from the Philippines. This has resulted in the production of key original content IPs for ASEAN audiences like 3 A.M. Bangkok Ghost Stories, Gantung, Do[s]a and Doors. Astro's animation kids IP, Cam & Leon co-produced with Giggle Garage, has been licensed to Indonesia's Global TV and will be available on Amazon Prime Video in the US.
This year Astro further strengthens its position as the home of sports with live broadcast of the 2018 FIFA World Cup Russia , Gold Coast 2018 Commonwealth Games, Jakarta 2018 Asian Games and the 2018/2019 Premier League season in August. To amplify live sports conversation among fans in Malaysia on social media, Astro has partnered with Twitter to provide sports clips and content on Stadium Astro's twitter account.
Talent: Upskilling, reskilling and retooling our talent
Astro is committed to hiring talent with requisite skillset
