Astro All Asia Networks plc made a net loss of RM250.4 million from a profit of RM34.02 million for its third quarter (3Q) for the financial year ending Jan 31, 2009 (3Q09) on start-up losses in its overseas investments and further provisions in relation to its Indonesian venture.
Its 3Q revenue rose 10% to RM745 million from RM679.4 million a year earlier. An interim dividend of 2.5 sen was declared, bringing its total dividend-to-date to 7.5 sen from five sen a year earlier.
Its earnings before interest, taxes, depreciation and amortisation (EBITDA), excluding the cost and provisions incurred from its Indonesian business, was 6% lower at RM154 million as the cost of content and operating expenses grew due to the increase in the number of channels.
“Gross subscriber additions at the Malaysian pay-TV operations were at a new high of 164,000 while net additions were strong at 96,000 and churn rate was 9.8%. Despite increasingly challenging market conditions, the radio business continued to deliver growth in revenue and EBITDA,” it said.
For its Indonesian venture, Astro ceased its support and services and its trademark licence agreement with PT Direct Vision on Oct 20, as it did not receive payment from the latter for its services.
“Following the cessation of services, the group has reconsidered carrying value of certain assets associated with the Indonesian venture, with a view to their recoverability in the context of current economic conditions and ongoing litigation and has concluded that a further provision of RM264 million is required,” it said.
To recap, Astro had proposed to participate in a joint venture, where it would operate a pay-television business through PT DV in March 2005. In anticipation of the completion of the joint venture, Astro provided certain services and expended monies towards the operational requirements of PT DV.
A dispute triggered between the Astro and Lippo group over the subscription and shareholders’ agreement — and despite several attempts, both parties failed to complete the joint-venture agreement.
“Despite the setback of the cessation of the Indonesian activities, the group continues to make progress. The Malaysian business has delivered a robust performance and for the rest of the year, it is expected to continue to grow though the current economic uncertainties may dampen consumer demand,” its chairman Datuk Haji Badri Masri said in a statement yesterday.
However, Astro would be evaluating its Indonesian content production and distribution activities where it may have to account for further restructuring charges estimated at RM75 million.
“Various legal actions have now commenced in respect of developments in Indonesia and the group will account for costs associated with these actions as they incur,” he said.
Badri said cost management measures had been implemented across the group to sustain margins and to minimise impact on the group’s future earnings.
“We also intend to remain focused on product and service improvement, cost-effectiveness and ongoing innovation. The core Malaysian business is highly cash-generative thus supporting our dividend policy,” he said.
In a separate statement, Astro said it had filed a notice of appeal yesterday at the Supreme Court of Indonesia to review the Central Jakarta District Court’s decision.
Astro’s appeal against the Competition Supervisory Commission’s (KPPU) ruling that it had breached competition laws there had been dismissed by the district court on Dec 3.
