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KUALA LUMPUR, DEC 9, 2015:Astro Malaysia Holdings Bhd (Astro) may consider increasing subscription fees to cope with rising operations costs following the challenging business environment expected in 2017, said AmResearch Sdn Bhd. The bank-backed research firm said Astro’s earnings would be hit by higher net finance costs and content costs due to unfavourable USD foreign exchange (forex) rates. “Year-to-date, Astro’s realised net finance costs from the discounting of its transponders deposit extended to RM131 million.” AmResearch said in a note today. It added that Astro’s content costs are expected to rise by up to RM250 million at the current forex rates as well as partly due to seasonal sports events such as the Olympics and Euro Cup. The ringgit is quoted at RM4.26 against the USD as at press time. The possibility to raise its user fees follows Astro’s chief executive Datuk Rohana Rozhan’s comment that 2016 will be a more challenging year with higher sports cost and a volatile forex environment. Astro reported a lower net profit of RM103.40 million in third quarter result for the financial period ended October 31, 2015 – compared to RM110.53 million registered in the corresponding period last year. In a statement to Bursa Malaysia, the company said the reduced profit was due to a drop in earnings before tax, depreciation and amortisation (Ebitda) of RM16.1 million, higher net finance costs by RM36.4 million due to unrealised forex impact primarily arising from unhedged finance lease liability of RM54.5 million and unhedged vendor financing of RM8.8 million. However, Astro’s revenue for the quarter was up by 0.4% to RM1.37 billion compared to RM1.28 billion in the same period last year. The higher revenue was due to an increase in other revenue of RM23.1 million – offset by lower subscription and advertising of RM10.5 million and RM7.2 million, respectively. “The increase in other revenue is due to an increase in merchandise sales of RM14.6 million from home-shopping business and sales of programming rights of RM8.4 million.” “The decrease in subscription revenue was due to decrease in net addition for Pay-TV residential subscribers by 900 (from 15,000 to 14,100),” Astro said. The company maintained its dividend policy payout and declared a dividend of 2.75 sen per share in the third quarter, 22% higher compared to the same period last year. Rohana said the company offer its customers more choices and better value in its products and services across its platforms. The company also added 218, 000 new TV customers during the period under review due to strong response for NJOI (free TV services). Rohana said Astro’s average revenue per user (ARPU) grew to RM99.30 from RM98.50 – supported by the take-up of value-added services. “Customers responded well to our On Demand offering launched in October 2015, pushing up connected PVRs (personal video recorder) to 252, 000 and Astro On the Go downloads to 1.8 million with an average 150 minutes weekly viewing time.” “We continue to proactively manage new business realities, making disciplined choices across our portfolio to ensure market leadership and sustainable growth…We are committed to delivering our dividend policy,” Rohana said in a statement.

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