PETALING JAYA: Astro Malaysia Holdings Bhd’s outlook remains challenging as it continues to face significant structural challenges as consumers increasingly shift to streaming platforms and short-form video content, putting sustained pressure on the pay-television operator’s subscriber base, revenue and earnings.
“This is the reason why the demand for its services has seen a slow decline over the years.
“What’s worse is that its business has high operating costs, whereby fixed costs are quite high, mainly in content and also in transponders and satellite fees.
“As such, every ringgit lost in revenue from subscriber attrition is felt directly at its bottom line. While revenue has been declining at a low- to mid-single-digit pace, earnings have fallen by close to double digits over the years,” Tradeview Capital fund manager Neoh Jia Man told StarBiz.
He said it remains uncertain how the company would navigate or recover from these structural challenges, looking ahead.
However, Neoh said “one good thing” about the company is that “at least it is generating quite a healthy level of cash flow every year”, since most of the group’s costs stem from the depreciation of content and transponder assets.
He added that a potential reinstatement of dividends could serve as a catalyst for the stock, noting that Astro has not been paying dividends for the past two to three years. Neoh said Astro is doing all that it can to stop the company’s decline.