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Astro banks on Go Shop and content to counter challenging FY20

Despite recording a revenue of RM5.5 billion for its financial year which ended on January 31 2019, Astro saw a negative 40% year-on-year to RM463 million following profit after tax and minority interests. This was attributed to the higher sports content cost, one-off employee separation scheme and unrealised forex losses on finance lease liabilities.

However, the company brought in a double digit growth in its commerce revenue, seeing a 29% year-on-year to RM374 million. Go Shop saw its customer base grew by 38% y-o-y to 1.8 million and recorded a revenue at RM99 million in Q4FY19.

Meanwhile, Astro’s ADEX posted a 43% growth in digital ADEX to RM50 million, albeit the 5% year-on-year drop in total revenue to RM687 million. However, ADEX continued to show quarterly recovery with a 10% increase quarter-on-quarter to RM196m in Q4FY19.

Meanwhile, its share of TV ADEX and radio ADEX remained strong at 44% and 76% respectively, while share of digital ADEX stood at 5%.

Henry Tan, chief executive officer of Astro, said that given the challenging operating environment, Astro is “reviewing its business to remain efficient and agile to serve its customers better”. He added that the company’s focus will remain on serving its 5.7 million Malaysian homes and 23 million individuals via its Pay TV and NJOI platforms with differentiated and compelling content.

Astro’s overall viewership was also said to be on the rise with NJOI penetrating about 77% of Malaysian households, garnering TV viewership share of 75%. Its total video views also grew with the number of connected set-top-boxes increasing by 25% year-on-year to surpass the one million mark, driving On Demand downloads by 135% to 54 million videos in a year.

Astro has also revealed that it has brought in more customers to its content, with registered Astro GO users growing by 32% to 2.2 million. Astro also said on its financial report that its radio brands have grown its presence on digital platform with average monthly digital streams of 14.8 million, up 53% year-on-year. Meanwhile, its digital brands such as Astro Gempak, Xuan, Astro Ulagam, Astro Awani and Stadium Astro continue to resonate with 8.3 million average monthly unique viewers.

Some of its regional partnerships and content licensing include its collaboration with Telkomsel in Indonesia to produce a mini-series, Nawangsih. For scale and better monetisation, Astro also sold the rights of its content IPs including Demon’s Path, Jason’s Market Trails, Jason Can`t Cook, Festive Foods, Hantu Kak Limah and Paskal The Movie to global OTT players.

“By leveraging on our customer base and our ability to reach and engage on television, radio and digital platforms, revenue adjacencies such as commerce, adex, content licensing and theatrical sales are showing promising growth trajectory,” Tan said.

In the financial statement, Astro  said that it anticipates FY20 to be a “challenging” year and recognises the urgency to strengthen its customer value proposition through initiatives such as broadband bundles, viewing across all screens, better customer service and deeper engagement with fans. The company aims to ride on its content, by deepening its strength in local vernacular and Asian originals through strategic partnerships to address local and regional audience.

As part of Astro’s revenue diversification, it continues to leverage on its customer base to offer targeted marketing and advertising solutions enabled by data and analytics, to drive advertising and commerce revenue.

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