ARPU Boosted by New TV Packs and Broadband Bundles
Astro Malaysia Holdings Berhad (AMH) | Result highlights for the first quarter of the financial year ending 31 January 2024 (Q1FY24):
· Normalised PATAMI* at RM62mn; PATAMI at RM16mn
· EBITDA +36% q-o-q to RM248mn
· ARPU +RM1.30 y-o-y to RM98.70
· Broadband base +28% y-o-y
· First interim dividend of 0.25 sen per share
Amid persistent macroeconomic headwinds and foreign currency volatility, Astro posted revenue of RM891mn in Q1FY24 with broadband and enterprise segments showing positive trajectory y-o-y. EBITDA rose 36% q-o-q to RM248mn in Q1FY24, due to higher sports content cost in the previous quarter, Q4FY23. The Group recorded Normalised PATAMI of RM62mn in Q1FY24; PATAMI was impacted by higher unrealised forex loss due to transponder lease liabilities as the US Dollar strengthened.
The Group remained cash generative and proactive in its capital management. The Board of Directors has declared a first interim dividend of 0.25 sen per share, exercising caution as Astro continues to reinvest in its transformation for long-term growth.
Euan Smith, Group CEO of Astro said: “Our bold playbook is transforming Astro into a digital, streaming company. About 25% of our customers are now enjoying our new streaming TV packs, which offer 11 premium streaming apps on top of our sparkling slate of Astro Originals and live signatures, sports, movies, news and kids. Our new TV packs, which can be bundled with our own internet service, Astro Fibre, continue to see good take up as customers can seamlessly stream on demand entertainment and enjoy greater value. As such, our ARPU has grown by RM1.30 y-o-y to RM98.70 inQ1FY24. Astro Fibre had a great first year, driving our broadband base higher by 28% y-o-y. In a market where viewing share is dominated by local content, Astro is Malaysia’s largest content creator, originating winning local originals like One Cent Thief, Projek: High Council and Liar; and local signature IPs like Gegar Vaganza Season 9 and Big Stage. Our latest movie blockbuster, Polis Evo 3 grossed ticket sales of RM50mn so far and is the No.1 movie in Malaysia beating all Hollywood blockbusters.”
“Our OTT aggregation strategy is advancing. WeTV is the latest to join Astro’s growing family of streaming apps, namely BBC Player, beIN SPORTS CONNECT, Disney+ Hotstar, HBO Go, iQIYI, Netflix, TVBAnywhere+, Viu and ZEE5, in addition to our own Astro GO. Streaming on Ultra and Ulti boxes, as well as on Astro GO is growing significantly, with On Demand shows streamed jumping 31%y-o-y to 194mn in Q1FY24. Ultra and Ulti Boxes installs grew 42% y-o-y to 860k while Astro GO saw its monthly active users rise 7% y-o-y to 566k, with average weekly viewing time of 3.5 hours,” Euan added.
Key Highlights
· Live Sports, Astro Originals Creating Waves of Excitement:
o As the official broadcaster, Astro is firing up excitement for Liga Malaysia with its high-quality coverage and on-ground activities. We have already recorded a total TV audience of 5.9mn while response for Liga Malaysia Pack is tracking above expectation with take-up of 58k on Astro and NJOI
o Andai Itu Takdirnya, emerged as the No.1 TV show On Demand during Ramadan with TV viewership of 932k with 483k shows streamed while live signature show Sepahtu Reunion AL Puasa garnered TV viewership of 996k with 496k shows streamed
· Astro Fibre Now Available to Additional 118k Homes in Sabah: Partnered Celcom Timur (Sabah) to provide high-speed broadband to a potential of 118,000 homes in Kota Kinabalu and major towns in Sabah
· Q1 Adex Supported by Ramadan and Raya: Total industry Adex, including Astro’s, moderated post year-end festivities and the FIFA World Cup Qatar 2022. Astro recorded Adex of RM99mn in Q1FY24, supported by Ramadan and Raya. Radex, TV Adex and Digital Adex share stood at 79%,33% and 2% respectively. Astro Radio brands continued to rank No.1 across all languages, registering 18.0mn weekly listeners on FM and online. SYOK saw its podcast monthly listens increased by 14% y-o-y to 921k while Astro digital brands registered 7.8mn monthly unique visitors
· sooka Wins Over Young Local Football Fans with Liga Malaysia: Digital natives’ usage is growing on sooka, the Group’s standalone streaming service, as a result of Liga Malaysia now being available on mobile devices and Smart TVs. Over 217k watched over 43mn minutes of Malaysian Football League (MFL) action. Sales of Single Match Passes exceeded 136k while over 11k Liga Malaysia Passes were sold. Overall, sooka, which has over 28k hours of content library, achieved 1.2bn minutes watched to date, with 70% of users on mobile
· Protecting the Media and Entertainment Industry Against Piracy: For the common good of the entertainment industry and to protect the rights of paying customers, it is critical that anti-piracy measures are effectively enforced. Astro continues to work closely with the authorities and industry stakeholders to protect copyrighted content. Recent actions against piracy and copyright infringement:-
o On 3 April 2023, a 22-year-old student was fined bythe Kuala Lumpur Magistrate's Court for having in his possession anunauthorised link to a popular local TV drama series on his devices
o On 5 April 2023, two individuals were charged at the Kuala Lumpur Session Court (Cyber) for selling TV boxes with unauthorised Astro content
o On 13 April 2023, two individuals were fined RM14,000 in total by the Kluang Magistrate's Court for selling TV boxes pre-loaded with unauthorised Astro content
o On 16 June 2023, an individual was fined RM20,000 by the Kuala Lumpur Sessions Court for selling TV boxes pre-loaded with unauthorised Astro content
· Driving Sustainability: Astro continues to be guided by its 5 pillars - Responsible Business, Caring for its Environment, Voice for Good, Education for All and Community Development. Some milestones: -
o Commitment to achieving Carbon Neutrality by 2040 and currently finalising our Climate Roadmap
o Aired over 2,000 hours of public service announcements (PSAs) across TV, radio and digital to amplify positive messages for the community
o In conjunction with Earth Day, Astro curated international and local documentaries on a dedicated rail - Love Earth while Astro Awani produced a panel discussion on ‘Invest in Our Planet,’ infographic videos and stories across its platforms. Team Astro also celebrated Earth Day with upcycling workshops; and collecting and recycling 935kg of materials
Outlook
FY24 will see us continuing the journey to be The Entertainment and Streaming Destination of Choice for Malaysians by investing in our transformation for long term and sustainable growth. This will encompass:
· delivering the best content experience, across all platforms, through New Astro;
· becoming Malaysia’s No.1 aggregator of the best streaming and lifestyle apps;
· elevating local content with high production value and premium storytelling via our Astro Originals, signatures and movies;
· ramping up the growthof our streaming app sooka, broadband and addressable advertising; and
· leveraging digital, data and technology to reimagine our business models and transform our legacy cost base.
Astro accounts for half of content investment in Malaysia, with the Group’s local content capturing 77% of viewing share. We are reinventing our content proposition to meet the increasing demand for high quality local content on all screens, and the success of our recent Astro Originals, signatures such as Projek: High Council, Andai Itu Takdirnya, Family Feud and Liar, our latest blockbuster, Polis Evo 3 and new local sports content, Liga Malaysia bear testament to this.
With third-party cookies soon to be phased out, we expect Addressable Advertising to gain traction over the longer-term as more advertisers tap into its capability to deliver targeted ads to specific individuals or households based on location, affluence, and other demographics by leveraging Astro’s first-party data. The Group is now equipped with a holistic audience measurement on Linear and On Demand and will be augmenting this measurement currency to include Commercial Establishments. Meanwhile, our own internet service Astro Fibre continues to see encouraging traction especially across broadband-content bundles, and is now available to enterprise customers as well.
2023 has observed more piracy cases being tried in courts, with rulings firmly in support of legitimate content creators and the content industry. This follows the landmark anti-piracy case that Astro won in November 2022 against a commercial establishment in the Klang Valley area under the Copyright (Amendment) Act 2022. These rulings denounce content piracy as theft, illegal, and punishable by law, and are essential to create awareness and rightful content consumption behaviour. Ongoing efforts with authorities will continue and the Group expects results of these to grow over time.
Macroeconomic headwinds including slowing global growth, strengthening USD, relatively high interest rates, and moderate but elevated levels of inflation; are expected to continue impacting households and businesses. The Group maintains a cautious outlook and will carefully monitor business conditions, whilst prudently managing costs.
