Astro scores in all major indicators

Astro now has an average of 7.5 million daily viewers. — DNA pic
Astro now has an average of 7.5 million daily viewers. — DNA pic

KUALA LUMPUR, Sept 22 — Malaysia's dominant pay-TV operator Astro Malaysia Holdings Bhd has every reason to cheer as it managed to register growth in most of its key areas during its fiscal first half ended July 31, 2014.

First half net profit grew 25 per cent as it successfully added to its subscriber base and grew its average revenue per user (ARPU).

For the fiscal first half ended July 31 2014, Astro’s net profit rose to RM266 million versus RM212 million in the same period a year ago. Revenue increased by 12 per cent to RM2.6 billion, against RM2.3 billion in the first half of last year.

The increase in revenue and earnings came on the back of a 13 per cent increase in subscriber base to 4.16 million compared with 3.67 million subscribers a year ago. This means that its services are now used by close to 60 per cent of the seven million Malaysian households.

From the total subscriber base, there were 3.49 million pay-TV household subscribers while the remaining 678,000 were customers of NJOI subscription-free satellite TV service, which offers up to 23 TV channels.

“The growth in customer base is across all demographics and we are particularly pleased with the growth in our Chinese base, driven by Astro packages like the Chuen Min Pack and Dynasty Pack, as well as higher take-up of NJOI,” Astro chief executive officer Rohana Rozhan said in a statement.

In terms of viewership market share, Astro now has a share with average daily viewers of 7.5 million, versus 6.9 million in the first half of last year. It attributed the higher viewership to the 2014 FIFA World Cup.

During the football tournament from mid-June to mid-July, the company recorded a TV viewership of 8.2 million.

During the first half of its fiscal year, Astro’s ARPU increased to RM98, a 3.3 per cent increase compared with the ARPU of RM94.9 in the same period last year.

The higher ARPU was partly driven by higher take-up of its value-added products and services across the board — including its bundled packages, high definition (HD), personal video recording and other services.

Astro, which also operates a number of radio channels in Malaysia such as hitz.fm, MIX Fm, MY FM, Lite FM and others, registered higher advertising revenue for both its satellite TV and radio business.

Total advertising revenue rose seven per cent to RM290 million, comprising RM160 million for TV and RM126 million for radio, with publication advertising revenue making up the remaining RM4 million.

Astro also managed to increase its market share in terms of radio and TV advertising expenditure (adex) from 55 per cent and 31 per cent respectively in the first half last year to 56 per cent and 33 per cent this year.

“We will continue to execute against our key strategies of growing customer base, increasing ARPU, and driving advertising share,” said Rohana.

During the first half, Astro’s EBITDA (Earnings Before Interest, Tax, Depreciation And Amortisation) margin also gained one percentage point to 35 per cent.

The only few major areas it registered a decline in the first half were its pay-TV gross net adds.

“Having slightly smaller gross and net adds are understandable, as the pay-TV market is now much more matured,” said an analyst from a foreign research house when contacted by Digital News Asia (DNA).

Value added products and services

Over the past two fiscal years, Astro has allocated over RM2 billion in capital expenditure (capex), comprising RM933 million in its 2013 financial year and another RM1.1 billion in the last financial year.

It said a significant chunk of its capex was used to execute its set-top box swapping exercise, although the company did not disclose the actual amount spent.

Astro said it is also seeing good traction in the box swapping exercise. In early 2013, only 44 per cent of its subscribers were using the B.yond set-top boxes. Today, over 88 per cent of its customers are using the new boxes.

The swapping exercise is important as it allows the company the opportunity to upsell new products and services to its customers.

For example, the number of customers signed up to its high definition service has now increased to 1.88 million versus 1.52 million in the first half of last year.

Customers using Astro On The Go service that allows subscribers to watch TV across different types of mobile devices anywhere in the world, are also on the rise. The app has registered a total 1.21 million downloads as at July 31, 2014, almost double from the 629,000 downloads it registered a year earlier.

In fact, during the FIFA World Cup 2014 tournament, Astro company managed to record1.9 million viewers for its Astro On The Go and the Astro Go 2014 FIFA World Cup apps.

“The high viewership is proof that Astro's multi-screen strategy, be it on TV, notebook, tablet or smartphone, is resonating with Malaysian viewers,” Rohana said.

Astro also grew the number of subscribers for additional decoders and for its its personal video recording services.

During the first half, the number of customers with more than one decoder rose to 359,000 versus 268,000 a year ago; while those who subscribed to personal video recording services increased to 636,000 versus 414,000 a year ago.

While the number is still small, it is nevertheless encouraging that its Astro’s IPTV (Internet Protocol television) business is growing. In the first half, it had 33,000 IPTV customers, compared with 16,000 a year ago. — Digital News Asia

* This article was first published here

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