Quick take: Astro shares up 4% on better-than-expected Q2 results
KUALA LUMPUR: Shares in Astro Malaysia Holdings Bhd improved over 4% in early trade Friday after the company reported second quarter results that beat analysts estimates.
The pay-TV operator rose 4.48%, or six sen to RM1.40 with 1.61 million shares done, making it one of the top gainers on Bursa Malaysia.
Astro’s net profit for the second quarter ended July 31,2019 (Q2 2020) jumped by more than 10 times to RM169.3 million, contributed by lower content costs and reduced marketing and distribution expenses.
For the same period, profit after tax and minority interest (PATAMI) jumped 920% year-on-year to RM169mil, underpinned by cost discipline measures, Astro said in a statement released today.
Revenue in the second quarter fell 12.7% to RM1.24bil from RM1.42bil, predominantly due to a decrease in subscription revenue and licensing income.
The company declared a second interim dividend of 2 sen per share.
Moving forward, Astro said the market remains challenging with structural changes in the global content, media and advertising industries, including threat of piracy.
MIDF Research said Astro’s 1HFY20 normalised earnings increased by 56.6% year-on-year to RM352.4mil.
“This has exceeded both our and consensus expectations, accounting for 56.2% of full year FY20 earnings estimates respectively, ” it said.
The research house said the exceptional item relates to post-tax impact of unrealised forex loss of RM7mil in 1HFY20.
The surge in earnings was primarily due to the notable reduction in total cost in line with its focus on operational efficiency.
“We are making upward adjustment to our FY20, FY21 and FY22 earnings by 7.8%, 8.5% and 5.9% to RM675.8mil, RM686.7mil and RM696.0mil respectively as we are lowering further our cost assumptions, ” MIDF said.
MIDF has maintained a buy on Astro with a higher target price of RM1.84 from RM1.74 previously. This is premised on forward PER of 14.0x pegging against FY21 EPS of 13.2sen per share.
Source: TheStar