Kuala Lumpur, 29 November 2016 – Media Prima Berhad (“Media Prima” or “The Group”), Malaysia’s largest integrated media company today announced its third quarter financial results which incorporated its undertaking of a key restructuring exercise to optimise its print manufacturing operations. This involves optimising the Group’s printing plant capacity, a strategic plan that allows Media Prima to unlock potential cost savings while the Group continues to invest in digital expansion activities and new business initiatives in line with the shift in consumers’ preference for digital content.
The one-off expenses of the restructuring exercise of its print manufacturing operations and the start-up costs of its new ventures are reflected in Media Prima’s financial results for the first nine months of the financial year ending 31 December 2016 which the Group also announced today.
|2.||Profit Before Tax||61.1m||144.3m||(70%)|
|3.||Exceptional Items (“EI”)|
|i. One-off Restructuring Expenses (Print Manufacturing Operations)||104.6m||–||NA|
|ii. Start-up costs of New Initiatives||12.7m||–||NA|
|4.||Profit After Tax/Loss After Tax||(71.6m)||106.7m||(>100%)|
|5.||Normalised Profit After Tax (Excluding EI)||45.6m||106.7m||(57%)|
- Media Prima recorded revenue of 4 million and registered normalised Profit After Tax (PAT) of RM45.6 million for first nine months of the financial year ending 31 Dec 2016.
- New Straits Times Press (M) Berhad implemented the restructuring of its printing manufacturing operations and implemented a one-off restructuring expenses of RM104.6 million (“Restructuring Expenses”)
- Media Prima implemented new business initiatives (“New Initiatives”) which incurred start-up costs due to gestation period.
- Incorporating the one-off Restructuring Expenses and also the start-up costs of the New Initiatives, Media Prima recorded Loss After Tax (LAT) of RM71.6 million.
Media Prima’s performance for the year remains affected by the soft consumer sentiments and the overall challenging operating environment. Having anticipated this, Media Prima had made significant investments in several new initiatives in early 2016, which not only provided a potential for medium-to-long term growth but also cushioned the impact of declining ADEX and newspaper circulation. Nonetheless, these initiatives have incurred start-up costs due to gestation period as reflected in the Group’s lower earnings compared to the same period in 2015.
The new initiatives undertaken by Media Prima, through the Group’s media platforms, include the launch of CJ Wow Shop (home shopping), revamp of tonton (Over the Top (OTT) video streaming portal) and the launch of Kool FM. The Group had also earlier this year launched several digital initiatives such as the interactive learning portal FullAMark, e-magazines as well as popular mobile applications capitalising on Media Prima’s Intellectual Properties.
Datuk Seri FD Iskandar, Group Chairman of Media Prima said, “Even under the prevailing soft market conditions, the Group was able to record modest results through our integrated media businesses. Our Out-of-Home and Radio media platforms recorded commendable revenue growth during the period. This clearly reflects the Group’s ability to remain resilient while weathering the uncertainties in the market with sound business strategies and smart industry collaborations.”
He added that Media Prima remains committed to deliver value to the shareholders and reiterated that the Group is in a strong cash position in spite of the restructuring exercise and investments in the new initiatives. Media Prima today announced a second interim, single tier dividend of 2.0 sen per ordinary share for the financial year ending 31 December 2016. The total dividends declared for the current financial period ended 30 September 2016 is 4.0 sen.
Big Tree Outdoor (“BTO”), the Group’s OOH advertising company and Media Prima Radio Network (“MPRN”), registered revenue of RM115.9 million and RM49.2 million respectively against RM112.0 million and RM47.4 million year-on-year (y-o-y). OOH and MPRN also recorded an encouraging PAT growth y-o-y of 3% and 18% respectively.
Media Prima Television Network (“MPTN”) recorded a marginal increase in revenue despite the lacklustre ADEX across the industry, registering a total of RM466.8 million in revenue against the RM463.1 million recorded within the same corresponding period of last year. MPTN’s CJ Wow Shop, had played a significant part in offsetting MPTN’s lower advertising revenue, contributing close to RM40.0 million in revenue in a period of six months since its launch in April 2016.
The challenging operating environment has impacted Media Prima’s Print and Content Creation businesses where both registered a decline in revenue and earnings for the first nine months under review. Print revenue declined by 22% y-o-y and incurred a LAT of RM125.4 million on the back of the restructuring exercise, lower ADEX (21% decline y-o-y) and continued decline in newspaper sales (26% decline y-o-y). Excluding the one-off restructuring expenses, Print recorded a LAT of RM20.8 million compared to PAT of RM24.2 million in 2015. Media Prima’s Content Creation unit also posted a revenue decline of 5% y-o-y and recording a PAT of RM7.7 million due to lower sales.
Dato’ Sri Amrin Awaluddin, Group Managing Director of Media Prima said, “The Group is continuously reviewing its business operations to improve its cost structure and actively growing its digital presence as part of the Group’s medium-term strategy to meet consumer demands. The restructuring of our printing plant operations, for instance, is to reduce our printing capacity and optimising cost efficiencies. This is in line with the declining circulation of physical newspapers across the industry and the significant increase in readership of the electronic versions, as recorded by the New Straits Times, BH and Harian Metro since January 2016”.
He further added that the digital initiatives undertaken earlier this year such as the revamp of tonton have enabled the popular video portal to increase its revenue through subscription fees compared to previous years. Meanwhile, Media Prima Digital (“MPD”) is expected to be able to monetise the
growing reach of its mobile applications which in less than a year, has a combined total of over 900k downloads.
“While the Group is pleased with the progress made by our new initiatives, the remainder of the year is expected to remain challenging. Within the media industry, the Group continues to face challenges from factors such as consumer fragmentation, technological advancements, the shift in advertisement to digital and increased competition from global media players,” he said.
The outlook for OOH is expected to remain positive with the continuous roll-out of digital assets and investment into recently secured concessions such as the Light Rapid Transport’s Line Extension and Mass Rapid Transport’s Exterior Outdoor Advertising for Package B. Radio will continue to offer its integrated radio solutions and further capitalise on the increased listenership of MPRN’s radio stations as reported by the recent GFK Radio Audience Measurement Survey.
Television will continue to face soft ADEX while its new initiatives will be able to contribute to its revenue moving forward. Meanwhile, Print will continue to focus on monetising its digital initiatives such as FullAMark, e-magazines and other digital publications. MPD will continue to support all digital initiatives within the Group and further grow its mobile applications business while Content Creation will focus to grow external revenue through advertiser content and tapping into international markets through original content programming for video on demand services.
For further information, kindly contact:
Media Prima Berhad at: 603- 1300 300 672 Ext: 8949 or 03 – 2724 8949
Azlan Abdul Aziz at [email protected] or 6012-614 0522
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