Astro's revenue drops 2% to RM4.14bn, partners Karangkraf to build content verticals

Astro saw a two percent year-on-year (yoy) decrease in revenue to RM4.14 billion for the nine months of the financial year ending 31 January 2018 (M9FY18).

As part of its strategic long term growth portfolio, Astro has entered into a binding term sheet with Grup Majalah Karangkraf (GMK) to form a joint venture. Under the joint venture, Astro will invest RM100 million for a 51% stake in Karangkraf Digital 360. The joint venture will also boost Astro's online presence among the Malay community and help boost its combined monthly unique visitors to about 10 million. The agreement also seeks to pursue 360° monetisation strategies for the Karangkraf Digital’s content IPs across multiple platforms, leveraging on Astro’s capabilities, growing reach and engagement.

The joint venture is in line with Astro's aim to build Nusantara and Islamic content verticals, which are key to Astro's digital and business transformation. According to the press statement, Astro is allocating "significant resources" for this segment and is accelerating its execution to achieve its regional ambitions.

Meanwhile, total ad expenditure increased by 0.4% yoy to RM526 million, leading to a larger share of radio ad expenditure (74%) and TV ad expenditure (44%). In a bid to engage the younger generation, Astro Radio launched two new radio brands - Zayan and goXuan - which target progressive Muslims and trendsetting Chinese Gen Zs respectively. This brings the number of radio stations under Astro to 11. It also launched a new entertainment startup Rocketfuel Entertainment, offering influencer marketing and talent management services under one roof. Rocketful Entertainment currently manages more than 100 influencers in beauty, fashion, lifestyle, automotive and parenting, across Southeast Asia.

Astro has been boosting its capabilities in the areas of software development, artificial intelligence, data analytics, video delivery, ad technologies and e-commerce. It has also made progress in training its workforce to become digitally-savvy to boost productivity, reduce cost to serve and enhance customer experience, through omnichannel and personalisation. As such, the company is confident that its agility and readiness to adapt will equip it to compete and capture opportunities in the new digital economy.

According to Dato’ Rohana Rozhan, group CEO of Astro, the company's growth is underpinned by continued strengthening of its propositions to households and commercial customers in Malaysia. It is also "aggressively" securing engines for future growth by building an ecosystem comprising watch, listen, read, shop and serve for the individual’s increasingly digital lifestyles in Malaysia and regionally.

“As a group, we are committed to growing our businesses of today by reinforcing and complementing our value propositions in the homes, and our reach and engagement to our advertisers. At the same time, we are driving our growth engine of tomorrow in the digital life spaces, Nusantara content vertical and commerce both in Malaysia and ASEAN. In doing so we are confident that we will continue to build on existing core revenue streams whilst driving profit growth by embracing digitalisation and cost economics. Concurrently, the investments we are making in new growth areas will make certain we are able to sustain strong and continued value creation for our shareholders," Rohana said.