Report: Sources claim more cost-cutting measures, job cuts at Star Media Group

The local media group has been pushed to downsize its organisation to remain afloat. — Reuters pic
The local media group has been pushed to downsize its organisation to remain afloat. — Reuters pic

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KUALA LUMPUR, June 17 — Sources have claimed that over 100 staff at the Star Media Group Bhd could be affected by cost-cutting measures that are said to include job rationalising exercises.

A report by The Edge Markets said that amid thrifty advertising spending habits caused by the Covid-19 pandemic, the local media group has been pushed to downsize the organisation to remain afloat.

The report claimed that these austerity measures also represent the third occasion in which jobs were cut at Star Media since 2017.

“Letters on the cost-cutting exercise involving job rationalisation were issued to senior management members yesterday and there are plans for another round of job cuts later this month for journalists,” said a source quoted in the report.

The report also detailed how Star Media reported a net loss of RM3.98 million in this year’s first quarter (1QFY20) that ended on March 31, with revenue at RM65.76 million over the same period.

In comparison, the media group reported a net profit of RM3.54 million in 2019, with revenue over the same period last year at RM82.57 million.

Also quoted in the report stock watchers CGS-CIMB Securities Sdn Bhd, who said it was an unavoidable fact that Star Media will run into losses in 1QFY20, adding how the company was only remaining profitable over the past few quarters thanks to their other sources of income, mainly through other investments.

“The movement control order (MCO) kicked off in the last two weeks of March 2020, prompting advertisers to renege on their buying commitments.

“Star’s net loss of RM4 million was equivalent to 20 per cent of our FY20F’s net loss forecast.

“We project wider losses in the subsequent quarters as we noticed that advertisement buys became sparser as the MCO progressed.

“Thus, we are keeping our FY20-22F forecasts,” CGS-CIMB Securities was quoted in the report.

The report also included how the group’s cash reserves stood at RM398.6 million, of RM0.54 per share at the end of March, with a real estate net book value at RM158.8 million, or 21.5 sen per a share, with Star Media stocks trading at 34 sen per stock as of yesterday evening.

As for the upcoming Star Media’s upcoming AGM slated to take place on June 22, the meeting will be conducted virtually for the first time in the group’s history.

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