Astro showing tentative signs of recovery

2026-03-26 - 10:21

Astro’s shares have been on a downward spiral, plunging 58% in the past year alone. (File pic) PETALING JAYA: Astro Malaysia Holdings Bhd’s downward spiral may finally be nearing its bottom after its net profit for the fourth quarter ended Jan 31, 2026 (Q4 FY2026) more than doubled year-on-year. The media and entertainment group’s net profit jumped nearly 130% to RM24.1 million from RM10.5 million a year ago while revenue dipped 7% to RM712.9 million from RM766.4 million the previous year. Its advertising business showed tentative signs of recovery, with advertising expenditure (adex) rising 18% quarter-on-quarter in Q4. The growth was driven by stronger demand across television, radio and digital platforms. Astro closed its financial year on a positive note, delivering two consecutive quarters of revenue growth, reflecting momentum from its ongoing transformation strategy. However, the group underperformed on a full-year basis as net profit fell 51% to RM63.1 million from RM129.2 million in FY2025 due to higher staff-related costs, broadband costs and marketing and distribution expenses. Revenue was also weaker at RM2.79 billion in FY2026 compared to RM3.08 billion the previous year as it was hit by a drop in subscription revenue, advertising revenue, rental income and sales of programming rights. Group CEO Euan Smith said there were “some positive signs” in advertising across Astro’s television, radio and digital segments. “Our streaming platform, Sooka, continues to gain traction supported by compelling sports, strong local content and strategic partnerships,” he said in a statement. Kenanga Research said Astro’s pay-TV gross additions grew 14% year-on-year in Q4, marking the second consecutive quarter of growth and “signalling early stabilisation in the subscriber base”. The research house upgraded the stock to “market perform” from “underperform” while lowering its target price to 8 sen from 12.5 sen previously. It also cut its FY2027 earnings forecast for Astro by 32%. “We believe value has emerged with current depressed valuations already reflecting earnings risks. Meanwhile, a potential recovery in subscriber base offers upside,” Kenanga said in a note today. Meanwhile, TA Securities said Astro’s FY2026 core net profit came in below both its own and consensus forecasts, dragged by higher content costs, weaker contributions from new TV packages, and lower pay-TV subscriptions. The brokerage downgraded Astro to “sell” and cut its target price to 7 sen from 11 sen. However, it said a potential re-rating catalyst would be if the Astro One strategy, which offers lower-priced packages, gains meaningful traction and delivers on subscription growth. Astro’s fortunes have dimmed in recent years after being buffeted by intense competition from over-the-top (OTT) services such as Netflix and Disney+ Hotstar that pulled away its traditional subscribers. Its once massive subscriber base has steadily whittled away as subscribers opted for TV boxes or illicit streaming devices. Like most legacy media companies, Astro has been hit by the huge drop in adex as brands shifted their spending to online and social media. The decline of the company founded by the late tycoon T Ananda Krishnan is reflected in its battered share price, which has plunged 92% over the past five years. Astro shares closed unchanged at 8 sen, valuing the company at RM392 million. It has fallen 58% over the past year.