ARPU +RM1 Y-o-Y to RM98.20 Underpinned by Higher Value Bundles
Astro Malaysia Holdings Berhad (AMH) | Result highlights for the fourth quarter of the financial year ended 31 January2023 (Q4FY23) [All comparisons refer to the third quarter of FY23 (Q3FY23) quarter-on-quarter (q-o-q) comparison, except as noted]:
- PATAMI +>100% q-o-q to RM55mn
- Adex +14% q-o-q to RM126mn
- Broadband base +34% y-o-y
- ARPU increased by RM1 y-o-y to RM98.20
Astro’s Q4FY23 revenue increased by 7% q-o-q to RM991mn, driven in part by higher Adex and a larger broadband base. PATAMI improved q-o-q to RM55mn, the result of higher revenue and unrealised forex gains due to transponder lease liabilities as the Ringgit appreciated during the period, offset by higher sports content cost. The Group remained cash generative and proactive in its capital management. However, amid macro and industry challenges, in this quarter the AMH legal entity recognised a non-cash impairment of RM763mn in respect of its historical cost of investments in subsidiaries. This impairment is an accounting adjustment and has no impact on the Group's consolidated PATAMI, nor any bearing on the entity or Group’s current or future cash position. The Group recorded a full year PATAMI of RM259mn in FY23. Given the non cash impairment, no interim or final dividends will be paid this quarter. The dividend declared in respect of FY23 amounts to 3.0 sen per share, equating to a 60% payout ratio.
Euan Smith, Group CEO of Astro said: “Our transformation plans have continued apace this year as we continue to put in place the structures and architecture that will define the Astro of the future. We are starting to see the benefits from the investments in content, product, connectivity, advertising and customer service, moving the company aggressively into the new streaming, on demand era. In line with Astro’s OTT aggregation strategy, we added Viu and ZEE5 to our existing premium apps and further enriched the content line-up for customers, who now have access to over 110k shows on demand. Together with the best live international and local sports, Astro Originals, premium international shows and everyone’s favourite Astro signatures, the addition of Viu reinforces our position as the entertainment destination for Malaysians with its extensive Korean drama and original series, while ZEE5 brings compelling new content for our Indian vernacular. Customers are streaming more than ever on the Ultra and Ulti boxes, as well as on Astro GO, with our On Demand shows streamed rising 25% y-o-y to 660mn. Our value-added streaming-focused TV packs, which can be bundled with Astro Fibre, are delighting our current customers and attracting new ones, contributing to the growth of both our ARPU by RM1 y-o-y to RM98.20, and increasing our broadband base by 34% y-o-y.”
“As the official broadcaster of the FIFA World Cup Qatar 2022, we were very pleased with viewing figures. In addition, many match events and special appearances by football legends helped increase footfall and generate on-ground excitement for all our customer groups. More recently we are extremely pleased to have become the official broadcaster of Liga Malaysia. Initial reception to our high quality coverage has been strong and we look forward to building the sport with the league and clubs. Elsewhere, the heightened awareness on the consequences of using illegal streaming devices at commercial premises is helping to drive higher subscription for our enterprise packs, which can be paired with BIZFibre.”
Best of Live Sports, Astro Originals and Local Movies:
- As the official broadcaster of Liga Malaysia, Astro has returned to champion local football with 244 matches in HD and 13 supporting programmes on 2 dedicated Arena Bola channels. Take up of Liga Malaysia offerings on Astro, NJOI and sooka are off to a good start since the 2023 season kick-off last month
- Astro Original, Projek: High Council, currently the No.1 show On Demand with 155mn minutes streamed, has attracted a new wave of fans with total social media reach of 23mn and 1bn views on Tik Tok. On ground activities generated huge excitement, reinforcing the new Astro experience among fans
- Live signature shows enthralled viewers with fan favourite Gegar Vaganza Season 9 registering 2.3mn TV viewership and 1.7mn shows streamed
- Mechamato The Movie is the No.1 local animated film with RM36mn while Didi & Friends The Movie grossed RM8.1mn inbox office sales
Streaming More on Astro:
Ultra and Ulti Boxes installs grew 47% y-o-y to 827k while Astro GO saw its monthly active users rose 10% y-o-y to 581k, with average weekly viewing time of over 3 hours. Both platforms are designed to make streaming easy and seamless, resulting in OnDemand shows hitting 660mn in FY23, up 25% y-o-y
Growth in Adex:
Total Adex rose 14% q-o-q toRM126mn, with year-end festivities and the FIFA World Cup Qatar 2022 driving strong performance across all TV, radio and digital platforms. Radex, TV Adex and Digital Adex share stood at 73%, 34% and 2% respectively. Astro Radio brands continued to rank No.1 across all languages, registering 17.7mn weekly radio listeners on FM and online. SYOK, Malaysia’s most popular audio entertainment app, saw its podcast monthly listens increased by 28% y-o-y to 1.1mn while Astro digital brands registered 8.4mn monthly unique visitors
sooka Continues to Win Over Millennials:
Streaming service, sooka, which has over 22k hours of content library, achieved 1.1bn minutes watched to date, with 82% users on mobile. Sales of World Cup Match Passes exceeded expectation and drove engagement, with VIP TV subscriptions on the big screen doubling during the World Cup period. sooka users can catch the best sports events including Liga Malaysia by subscribing to either the VIP+Sports plan, Liga Malaysia Pass or a standalone Single Match Pass
Astro continues to be guided by its 5 pillars: Responsible Business, Education for All, Voice for Good, Caring for its Environment and Community Development. Some milestones:-
- Astro’s carbon footprint improved in 2022 with a 5.4% reduction of GHG emissions to 22,713 tCO2e from 24,020 tCO2e in 2021 due to various initiatives while renewable energy generated by solar panel system resulted in a significant carbon avoidance of 887 tCO2e, equivalent to planting 26,975 trees. Astro is currently developing a climate roadmap, in line with its commitment to achieve Carbon Neutrality by 2040
- Committed to Voice For Good, Astro broadcast more than 8,000 hours of public service announcements over TV, radio and digital platforms in 2022 to raise awareness on key environmental, social, civic and governance issues
- In championing education for all, Astro contributed a total of RM140,000 to Astro Kasih hostels and Starfish Foundation in East Malaysia during the year. Astro also supported World Vision Malaysia with RM30,000 that will go towards education initiatives among local communities in Sabah
- Astro Kem Badminton (AKB) trained 1,500 children between 10 to 12 years old across Malaysia in 2022 to promote teamwork and leadership skills through sports. Since inception, AKB has trained more than 18,000 aspiring young players
Through the New Astro Experience, The Group is committed to realise its vision to be The Entertainment Destination for Malaysians encompassing:
- delivering the best content experience across all platforms;
- becoming Malaysia’s No.1 aggregator of the best streaming and lifestyle apps;
- elevating local content with more premium Astro Originals for urban and younger viewers;
- seizing opportunities for adjacencies in digital, broadband and advertising; and
- leveraging digital, data and technology to reimagine its business models.
FY24 will see Astro continuing to invest in its transformation for long term and sustainable growth, focusing on content, broadband, streaming, addressable advertising, customer experience, data and technology to better serve customers.
The Group’s strategic partnership with the Malaysian Football League (MFL) marks its re-entry as the official broadcaster of Liga Malaysia, Malaysia’s top tier professional football league. Remaining steadfast to its aspiration as Malaysia’s Home of Sports, Astro will raise production quality, drive better engagement and provide comprehensive coverage of the Liga Malaysia sporting franchise, giving fans the #DemiLigaKita experience they truly deserve. Astro expects this to be positive for the business going forward. With local content capturing 75% of customers’ viewing share, the Group will also continue to expand its pipeline of Astro Originals, and signatures such as Projek High Council, Andainya Itu Takdir, Family Feud and Liar to meet viewers’ demand for high quality local content.
The Group has aggregated 10 global streaming apps onto its flagship Ultra Box and these are included in Astro TV packs, providing for the best big screen viewing experience to customers, with more premium apps coming soon. Astro will also be adding lifestyle apps, relevant for Malaysians in the near future. Focus will also be on scaling sooka, its freemium streaming service for younger cord-nevers that is available both on both mobile and the big screen through its smart TV app.
The Group is now equipped with unified audience measurement on Linear and On Demand and has recently augmented this measurement currency to include Commercial Establishments. The Group expects Addressable Advertising to gain traction 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. Meanwhile, Astro Fibre, its own internet service launched in March 2022, has seen encouraging traction especially across broadband-content bundles, and was recently made available to enterprise customers. Bundled with content packages, the Group expects Astro Fibre to continue growing into the future.
On 2March 2023, Malacca’s Magistrates’ Court fined three individuals for selling illegal streaming devices (ISDs) in the form of TV boxes pre-loaded with unauthorised Astro content. 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 be accretive over time.
Macroeconomic headwinds including slowing global growth, comparatively higher 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 monitor business conditions, whilst prudently managing costs.
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