Kelebihan digitalisasi Media Prima dilihat pada pertengahan 2019

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Ms Senorita

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Media Prima Bhd - (11 Feb, 40.5 sen) : Pengekalan harga sasaran tidak berubah (TP) sebanyak 42 sen: Kami berfikiran terbuka selepas berbincang dengan pengurusan Media Prima Bhd. Kumpulan itu percaya kelebihan daya saingnya melalui tarikan penonton yang lebih ramai akan menyelamatkannya daripada merudum. Kumpulan ini menyasarkan strategi Odysseynya dengan bertujuan agar pulangan yang lebih tinggi ke segmen digital bagi mengurangkan hasil yang menurun dari platform media tradisional. Kerugian dijangka berkurangan melalui pelbagai inisiatif dan pulangan dividen yang tidak pasti sekurang-kurangnya dalam satu hingga tiga tahun akan datang. Kami mengekalkan ramalan perolehan dan "memegang" TP sebanyak 42 sen, penetapan pada harga nilai buku (PBV) sebanyak 0.6 kali.

Pada pendapat kami, sebab utama penurunan harga saham Media Prima adalah dari pelbagai usaha yang tidak berhasil dan terlalu bergantung kepada hasil media tradisional. Ini merupakan sebab utama Media Prima menanggung pelaburan yang tinggi dalam pengambilalihan dan perkongsian, permulaan kos rasionalisasi, dan tempoh kematangan yang lebih lama kepada strategi digital.

Melalui Odyssey, Media Prima memperluaskan sasaran pendapatan bukan iklan dari 20% kepada 40% dan hasil digital dari 5% hingga 20% pada tahun 2020. Untuk mencapainya, Media Prima perlu meneroka platform media termasuk televisyen, radio, cetak dan luaran untuk mencapai sasaran penonton yang lebih luas, manakala Rev Asia akan memenuhi keperluan media moden.

Di bawah Odyssey, Media Prima menyasarkan untuk menyumbang 20% ​​daripada jumlah hasil. Untuk mencapainya, Media Prima percaya platform media tradisionalnya dapat mengangkat sasaran digitalnya - Tonton segmen online mendapat capaian penonton yang lebih luas melalui platform YouTube; akhbar tradisional dapat menawarkan bacaan dalam talian melalui laman web dan aplikasi telefon; serta radio yang menawarkan aliran podcast baru. Melalui digitalisasi, pelawat unik New Straits Times Press meningkat kepada 19 juta dan melalui Ripple, Media Prima mampu memperolehi segmen yang tepat bagi membolehkan penyelesaian bersesuaian untuk pengiklan untuk mencapai pelbagai sasaran penonton.

Menyedari betapa pentingnya kandungan kreatif, produksi kandungan Media Prima bekerjasama dengan pemain yang lebih hebat - Netflix dan Dailymotion - bagi menyiarkan kandungan Media Prima. Di samping itu, melalui karyanya, Ejen Ali kini disiarkan ke lebih daripada 45 buah negara dan sangat popular di negara-negara jiran.

Pada pandangan kami, struktur kos semasa Media Prima terlalu padat untuk sebuah syarikat ke arah digitalisasi. Kos ‘overhead’ Media Prima kini merangkumi hampir 36% daripada jumlah kos berbanding dengan 18% oleh Astro Malaysia Holdings Bhd dan kami percaya Media Prima mensasarkan untuk menanggung kos kakitangan di bawah 30% daripada jumlah perbelanjaan. Jika ini menjadi kenyataan, kami percaya Media Prima dapat menyalurkan penjimatan dari kos rasionalisasi ke arah lebih banyak kepada kandungan kreatif dan usaha digitalisasi.

Sebahagian daripada usaha digitalisasi, Media Prima baru-baru ini melancarkan Big + (Big Tree segmen OOH) yang memberi tumpuan kepada penggunaan teknologi pengenalan geotag dan imej pada papan iklannya. Teknologi ini akan membolehkan pengguna, menggunakan telefon pintar mereka untuk memberi tindak balas pantas terhadap pengiklanan. Perbelanjaan modal tidak didedahkan bagi inisiatif ini; Walau bagaimanapun, dijangkakan pulangan senyap dari segmen ini disebabkan kos permulaan.

Walaupun pengurusan sebelum ini telah menunjukkan pengurangan kerugian pada suku tahun yang akan datang, keadaan berubah disebabkan oleh kelewatan pemberhentian kakitangan dan pertumbuhan perbelanjaan pengiklanan yang lebih perlahan daripada yang dijangkakan walaupun sentimen pengguna agak baik.
Disebabkan ini, kami menjangkakan kerugian berterusan untuk tahun-tahun kewangan 2019 dan 2020 akan datang.

Kami percaya Media Prima tidak akan mengeluarkan dividen dalam tempoh satu hingga tiga tahun akan datang. Tunai berjumlah RM257 juta pada suku ketiga 2018, merosot daripada RM374 juta setahun lalu. Keseluruhannya, kita tidak menjangkakan hasil dividen menjadi tarikan utama untuk pelaburan ini. Walaupun pendapatan digital agak pantas di barisan teratas, kami menganggap tidak akan ada sebarang perubahan penting dalam sumbangan pendapatan di semua platform medianya. Oleh itu, kami menganggarkan pendapatan kami tidak berubah pada masa ini.

Walaupun optimis dalam inisiatif digital, kami melihat kadar perlahan sumbangan digital akan membawa Media Prima kembali pulih hasil kejatuhan dari sumbangan media tradisionalnya yang semakin merosot. Kami hanya akan mula melihat ganjaran dari inisiatif pada separuh kedua 2019. TP 42 sen didasarkan pada PBV sebanyak 0.6 kali, -2 penyimpangan standard dibawah minima lima tahun.


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Benefits from Media Prima’s digital initiatives seen in 2H19

Media Prima Bhd - (Feb 11, 40.5 sen) Maintain hold with an unchanged target price (TP) of 42 sen: We are feeling neutral after a meeting with Media Prima Bhd’s management. The group believes its competitive advantage through a wider audience catchment will return it to the black. The group is aiming to leverage its Odyssey strategy for higher contribution from the digital segment to mitigate a declining revenue from traditional media platforms. Losses are expected to be narrowed through various initiatives and a dividend payment seems unlikely at least in the next one to three years. We maintained our earnings forecasts and “hold” call with a TP of 42 sen, pegged at price-to-book value (P/BV) of 0.6 times.

In our view, the main reason for Media Prima’s dwindling share price is its fruitless diversification efforts and being heavily dependent on traditional media revenue. This led Media Prima to incur a high investment in acquisitions and partnerships, embark on cost rationalisation exercises, and a longer gestation period for the digital strategy.

Through Odyssey, Media Prima is aiming to expand its non-advertisement revenue from 20% to 40% and digital revenue from 5% to 20% by 2020. To achieve this, Media Prima is exploiting its media platforms including television, radio, print and outdoor to reach a wider target audience, while Rev Asia will cater for the modern media.

Under Odyssey, Media Prima is aiming for digital to contribute 20% of total revenue. To achieve this, Media Prima believes its traditional media platforms can lift its digital targets — the free-to-air segment’s Tonton can reach a wider audience through the YouTube platform; a traditional newspaper is able to offer online reading through websites and phone apps; and radio to offer new podcast streams. Through digitalisation, the New Straits Times Press’ unique visitors increased to 19 million and through Ripple, Media Prima was able to catch an accurate segmentation enabling customised solutions for advertisers to reach various target audiences.

Having realised the importance of creative content, Media Prima’s in-house content production has worked with over-the-top players — Netflix and Dailymotion — to broadcast Media Prima’s contents. Additionally, its brainchild Ejen Ali is now broadcast to over 45 countries and is very popular in our neighbouring countries.

In our view, Media Prima’s current cost structure is too dense for a company on track towards digitalisation. Media Prima’s overhead cost currently comprises almost 36% of total cost compared with Astro Malaysia Holdings Bhd’s 18%, and we believe Media Prima is targeting to hit a personnel cost below 30% of total expenses. If this materialises, we believe Media Prima is able to channel the savings from the cost rationalisation towards making more creative contents and digitalisation efforts.

As part of its digitalisation efforts, Media Prima recently launched the Big+ (the OOH segment’s Big Tree) focusing on using geotagging and image recognition technologies on its billboards. The technologies will enable consumers, using their smartphones, to swiftly respond to advertisements. The capital expenditure is not disclosed for this initiative; however, we expect a muted contribution from this segment due to the start-up cost.

While management had previously guided for reduced losses in the coming quarters, this tone has changed due to a delay in staff lay-offs and a slower-than-expected advertising expenditure growth despite strong consumer sentiments. In light of this, we anticipate the losses to persist for the rest of financial years 2019 and 2020.

We believe Media Prima is unlikely to disburse a dividend in the next one to three years. Its cash stood at RM257 million as of the third quarter of 2018, declining from RM374 million a year ago. All in, we do not expect dividend yield to be the main attraction for this stock. Despite an acceleration from digital revenue at the top line, we reckon there will not be any significant changes in earnings contributions across all of its media platforms. As such, we are leaving our earnings estimates unchanged for now.

Despite optimism in its digital initiatives, we viewed the slow pace of digital contribution will drag Media Prima’s return to the black as its traditional media contribution is deteriorating rapidly. We will only start seeing rewards from the initiatives in the second half of 2019. Our TP of 42 sen is based on P/BV of 0.6 times, -2 standard deviations below five-year mean. — Hong Leong Investment Bank Research, Feb 11

Sumber : the edge markets
 

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Ms Senorita

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Pelaburan digital Media Prima berhasil

MEDIA Prima Bhd, kumpulan media bersepadu terbesar di Malaysia, mencatatkan keuntungan selepas cukai RM59 juta bagi tahun kewangan berakhir 31 Disember 2018, berbanding kerugian RM668.7 juta pada tahun sebelumnya.

Keuntungan itu dicapai menerusi kejayaan kepelbagaian perolehan selain strategi meringankan aset selari dengan misi transformasi kumpulan.

Prestasi memberangsangkan itu disumbangkan oleh keuntungan sekali menerusi penyelesaian perjanjian jualan dan pajak semula berjumlah RM133.1 juta.

Pengarah Urusan Kumpulan, Datuk Kamal Khalid berkata, prestasi kukuh itu juga menunjukkan inisiatif transformasi mula meningkatkan margin kumpulan dan mengimbangi kerugian daripada segmen tradisional.

“Jika dikecualikan perkara luar biasa, kumpulan merekodkan kerugian selepas cukai yang lebih rendah sebanyak 42 peratus.

“Kami percaya dengan operasi sebagai kumpulan aset ringan dan pada masa sama sebagai peserta utama dalam landskap tradisional dan digital, ia memberi kami lebih ketangkasan dan daya saing untuk berkembang pantas dalam sektor pertumbuhan utama,” katanya dalam kenyataan di Kuala Lumpur, hari ini.

Katanya, ketika industri media terus berdepan dengan cabaran akibat lanskap ekonomi semasa, pelaburan digital dan perdagangan Media Prima merekodkan pertumbuhan positif dalam 2018.

Perolehan digital dan perdagangan pada tahun kewangan meningkat 76 peratus kepada RM301 juta dan ini mengimbangi penurunan perolehan daripada segmen perniagaan tradisional seperti dicatatkan oleh prestasi kewangan Media Prima yang lebih baik pada tahun itu.

Perolehan kumpulan menyusut satu peratus pada 2018, berbanding penurunan tujuh peratus pada 2017.

Pencapaian dan perolehan pengiklanan digital terus berkembang di seluruh platform Media Prima.

Perolehan digital meningkat kepada RM87.9 juta dalam tahun kewangan 2018 berbanding RM41.5 juta bagi tempoh sebelumnya, menekankan kejayaan dalam strategi digital yang meliputi kerjasama pintar dan pengambilalihan strategik.

Sumber : myMetro
 

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Media Prima going digital seen to bode well for its long-term strategy



(Dec 17, 29.5 sen)

Maintain hold with an unchanged target price of 29 sen:
The Edge reported that Media Prima Bhd gave official notifications to employees affected by its manpower rationalisation, part of the next phase of its business transformation. Under Media Prima, Sistem Televisyen Malaysia Bhd Employees Union, TV3 Executive Union, National Union of Journalists Peninsular Malaysia or NSTP branch and National Union of Newspaper Workers are affected.

According to the article, Media Prima is looking to trim 543 employees — 14% of its total workforce, without mentioning the total compensation package involved. We estimate that Media Prima — based on a similar exercise in 2017, where it forked out RM20 million for 243 employees — will need to fork out RM44 million as a compensation package for the 543 employees.

Based on the annual report for financial year 2018 (FY18), Media Prima incurred a total employees cost of RM382 million (ex-termination benefits) on a 3,900 headcount, translating into a staff cost of RM98,000 per employee per annum. Based on that figure, we estimate Media Prima could save about RM53 million annually from the whole exercise trimming 543 employees.

Overall, we are positive about the move to ensure Media Prima’s survival in the long term given a structural shift in the media sector towards digital. Media Prima has been hurt by weak contributions from traditional platforms — television and print segments. While its home shopping has shown promising top-line growth, this is unable to cushion the falling traditional segments.

Our forecasts are unchanged pending more clarity from the management on details of the exercise. However, based on our calculations, we estimate Media Prima to remain in the red in FY20 as the staff cost-savings will be offset by a compensation cost of about RM44 million. Media Prima is aligning its business towards digital, and we believe the rationalisation bodes well for its long-term strategy to reduce exposure to traditional platforms. — Hong Leong Investment Bank Research, Dec 17

Sumber : the edge markets
 

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Saham Media Prima tidak berubah meskipun pengumuman pelan rasionalisasi tenaga kerja

Saham Media Prima tidak berubah meskipun pengumuman pelan rasionalisasi tenaga kerja

Sejak awal Oktober tahun ini, saham syarikat media itu mengalami penurunan ketara, jatuh sebanyak 69.8 peratus daripada 48 sen pada 1 Okt kepada 14.5 sen hari ini dengan 110,300 saham diniagakan.

KUALA LUMPUR: Saham Media Prima Bhd tidak berubah di tengah-tengah pengumuman pelan rasionalisasi tenaga kerjanya.

Sejak awal Oktober tahun ini, saham syarikat media itu mengalami penurunan ketara, jatuh sebanyak 69.8 peratus daripada 48 sen pada 1 Okt kepada 14.5 sen hari ini dengan 110,300 saham diniagakan.

Media Prima dalam satu kenyataan hari ini berkata strukur operasi baharu dan senarai pekerja yang terlibat ditentukan selepas beberapa perundingan dengan Kesatuan Sekerja Sistem Televisyen Malaysia Bhd, Kesatuan Eksekutif TV3, Kesatuan Kebangsaan Wartawan Malaysia (Cawangan NSTP) dan Kesatuan Kebangsaan Pekerja-Pekerja Akhbar (NUNW).

"Pemakluman rasmi diberikan kepada semua kakitangan terlibat pada 16 Dis, 2019, dan bayaran pampasan akan dibuat sepenuhnya selepas proses kawal selia dan dalaman selesai.

"Kumpulan memastikan pampasan yang adil dan saksama ditadbir oleh Akta Pekerjaan 1955, perjanjian kolektif kesatuan masing-masing dan kontrak pekerjaan; dan kumpulan juga akan menyediakan sokongan yang termasuk perkhidmatan penempatan keluar pekerjaan dan kaunseling kerjaya," kata syarikat itu.

Dilaporkan bahawa syarikat itu merancang mengurangkan sehingga sebanyak 1,500 pekerjaan.

Media Prima merupakan syarikat media kedua di negara ini yang berdepan masalah kewangan selepas akhbar harian berbahasa Melayu tertua negara, Utusan Malaysia, terpaksa menutup operasinya pada Oktober tahun ini.

Sumber : astro awani
 

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if Media Prima x wat sesuatu, boleh bungkus ni. langkah yang bijak untuk penetrate platform digital.
 

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Media Prima raih peningkatan pendapatan 5.0 peratus pada suku keempat 2019


KUALA LUMPUR: Media Prima Bhd mencatat peningkatan pendapatan sebanyak 5.0 peratus pada suku keempat berakhir 31 Disember 2019 kepada RM304.6 juta berbanding RM290.9 juta pada tempoh sama tahun sebelumnya.

Kumpulan media bersepadu itu dalam satu kenyataan berkata, jika perkara luar biasa (EI) yang dilaporkan dalam kedua-dua suku dikecualikan, ia berupaya mencatat keuntungan selepas cukai (PAT) sebanyak RM9.7 juta pada suku dikaji berbanding kerugian selepas cukai (LAT) RM38.5 juta pada suku sama tahun sebelumnya.

Perkara luar biasa itu, katanya, termasuklah pelaksanaan penstrukturan semula operasi dalaman pada suku keempat 2019, dan keuntungan sekali sahaja daripada urus niaga jual dan pajak semula pada 2018.

Media Prima menjelaskan, cabaran dalam ekonomi dan industri terus memberi kesan kepada prestasi tahun kewangan penuh kumpulan pada 2019 (FY19).

“Pendapatan menurun sebanyak 7.0 peratus pada FY19 berbanding dengan tahun sebelumnya, disumbangkan pendapatan rendah pengiklanan tradisional dan pengedaran yang mana masing-masing menurun 11 peratus dan 12 peratus.

“Jika tiada perkara luar biasa, LAT Kumpulan boleh dikurangkan sebanyak 35 peratus kepada RM69.4 juta pada FY19 berbanding RM106.0 juta setahun yang lalu,” kata kenyataan yang dikeluarkan di sini hari ini.

Kenyataan itu menyebut, segmen digital dan perdagangan kumpulan mencatatkan 4.0 peratus peningkatan pendapatan kepada RM320.2 juta pada FY19.

Segmen beli belah di rumah Rangkaian Televisyen Media Prima, CJ Wow Shop, mencatat 9.0 peratus peningkatan pendapatan kepada RM232.3 juta dan peningkatan sebanyak 13 peratus kuantiti barangan yang dijual.

Jumlah pelanggan juga meningkat 13 peratus pada FY19 dan sebanyak 1.0 peratus dari tahun-ke-tahun sejak 2016.

Bagi segmen digital, ia berkata, Media Prima Digital melalui REV Asia mencatatkan 8.0 peratus peningkatan pendapatan kepada RM44.7 juta pada FY19, justeru memperlihatkan kejayaan dalam strategi pemasaran kandungannya.

“Antara pencapaian utama dicatatkan Media Prima pada 2019 ialah kejayaan besar Ejen Ali iaitu salah satu hak milik intelektual kumpulan.

“Siri animasi televisyen popular yang ditayangkan buat pertama kalinya di layar perak ini memperoleh RM30.8 juta dalam kejayaan ‘pecah panggung’, menjadikannya filem Malaysia yang mencatatkan kutipan tertinggi pada 2019, dan juga rekod kutipan tertinggi filem animasi tempatan serta di kedudukan ketiga kutipan tertinggi bagi filem Malaysia setakat ini. Filem itu
juga ditayangkan di Indonesia, Brunei dan Singapura,” katanya.

Mengulas perkembangan itu, Pengerusi Kumpulannya, Datuk (Dr) Syed Hussian Aljunid, berkata prestasi suku keempat 2019 menyuntik keyakinan bahawa Media Prima berada dalam kedudukan kukuh untuk memasuki fasa seterusnya usaha transformasi kumpulan.

“Sebagai kumpulan media bersepadu, kami akan terus berinovasi bagi memenuhi keperluan audiens dan para pengiklan yang semakin berkembang.

“Ini termasuk mengembangkan kehadiran digital, dan pada masa sama melaksanakan peluang perniagaan baru dengan memanfaatkan aset sedia ada. Kami juga kekal fokus dalam mengasah kelebihan untuk terus berdaya saing, di samping memantau dengan rapat kecekapan pengendalian operasi.

“Saya yakin Media Prima mempunyai aset dan pasukan yang tepat untuk melaksanakan peluang-peluang yang mendatang,” katanya.

Sementara itu, kumpulan itu turut mengumumkan ia sudah memuktamadkan fasa pertama pelan transformasi, Odyssey, yang bermula pada 2016.

Pelan transformasi berkenaan digubal bagi menangani isu legasi dan teknologi baru yang memberi kesan kepada perolehan dijana daripada perniagaan media tradisional.

Media Prima sudah melaksanakan pilihan penyelesaian yang berjaya dan mampan untuk penstrukturan Kumpulan.

Fasa pertama memberi fokus kepada kepelbagaian perolehan menerusi tiga bidang utama iaitu digital, perdagangan dan melangkaui Malaysia, dan membabitkan pemerolehan strategik, serta kerjasama dengan syarikat media dan teknologi global.

Media Prima percaya Odyssey, kata kenyataan itu, menyediakan asas yang diperlukan bagi pemulihan korporat pada masa depan apabila perolehan dijana menerusi inisiatif ini menyumbangkan perolehan lebih besar kepada kumpulan dari tahun ke tahun.

Pada 2019, pendapatan Odyssey mencecah RM318 juta, menyumbang 29 peratus kepada keseluruhan perolehan kumpulan berbanding RM176.4 juta atau 15 peratus pada 2017.

Pengarah Urusan Kumpulan Media Prima, Datuk Kamal Khalid, berkata pelaburan penting dalam Odyssey telah meletakkan kumpulan mempunyai asas yang kukuh bagi bersaing dalam persekitaran media yang berubah dengan pantas yang dipacu digital ketika ini.

“Pelaksanaan proses rasionalisasi dan penstrukturan menjadikan kami syarikat yang lebih tangkas dalam melayari ketidaktentuan masa depan.

“Kita bersedia menghadapi masa depan kerana mempunyai warga kerja yang bertenaga dan komited dalam menjadikan Media Prima sebagai syarikat peneraju media pertama-digital.

“Menuju dekad akan datang, kami akan memasuki fasa seterusnya transformasi perniagaan yang menjanjikan penyampaian terbaik kepada audiens, para pengiklan dan rakan niaga,” katanya.


Sumber : BHonline
 

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Special Report: Media Prima on an even keel now, says Kamal



LITTLE did Datuk Kamal Khalid know what was in store for him when he took on the position of group managing director at Media Prima Bhd in August 2017 after having headed the group’s TV business. He had served the group in different capacities for close to 11 years.

The almost three years Kamal spent steering Media Prima were anything but dull.

Nine months after he assumed the top post at the company, Malaysia saw an unprecedented change in government and, at the time, Umno was a substantial shareholder of the group, but not any longer.
Also during Kamal’s tenure as managing director, the group underwent a massive restructuring even as the media landscape turned tough.
In an exclusive exit interview as Media Prima’s group managing director, Kamal shares with The Edge that while the journey was interesting and the experience rewarding, it did take a bit out of him.
“You had digital disruption, which has hit all the traditional media companies. And then you had the elephant in the room — a political change after 60 years. Having to manage that was difficult.
“But the company does seem to be on even keel now. We have done the restructuring, we have done a rationalisation, which gave me absolutely no pleasure but it was something I think we needed to do ... so the company is better positioned to face whatever challenges it needs to face going forward,” he remarks.
“So I think it’s the right time for new energy and leadership to take over and my successor, Iskandar, is very well versed in the industry, with a great track record and CV. He will do well to take this group forward.”
Datuk Iskandar Mizal Mahmood, the current group executive director of Media Prima, will take over from Kamal effective April 1.
Iskandar, who joined Media Prima’s board on Oct 1 last year, has over 30 years of wide-ranging experience in the corporate world. He was the group CEO of Pos Malaysia Bhd and a group director of DRB-Hicom Bhd prior to joining the group.
It will be interesting to see what strategies Iskandar implements and whether he and his team can turn Media Prima around in a challenging operating environment. The group has a presence in print, radio and free-to-air TV as well as an out-of-home advertising business and home shopping.
Its earnings, like those of most players in the industry, have been on a downward trend in recent years.
From RM1.5 billion in FY2014 (ended Dec 31), revenue dropped to RM1.43 billion in FY2015, RM1.29 billion in FY2016, RM1.2 billion in FY2017 and RM1.19 billion in FY2018.
According to its latest unaudited fourth-quarter results, revenue for FY2019 was down 6% year on year to RM1.12 billion.
Media Prima has not paid any dividends since FY2017. It last paid a dividend of 8 sen in FY2016, lower than the 10 sen dividend per share paid in F2015 and 11 sen per share paid in 2014.
In terms of bottom line, the group slipped into the red in FY2016, registering RM69.7 million in net losses, which widened in the following year to RM669.7 million.
The company returned to the black in FY2018, registering a RM58.9 million net profit but fell back into the red again in FY2019, recording a net loss of RM185 million.
Nevertheless, Kamal believes the worst is over for the company, which is starting to see green shoots, judging from its results for the latest quarter ended Dec 31, 2019 (4QFY2019).
“We have come through the difficult times intact. It’s no secret that media companies have fallen by the wayside over the last few years ... But we still remain standing. It was a great fourth quarter last year when we turned an operational profit … So there is still life in this old machine,” Kamal states.
Revenue for 4QFY2019 rose 5% to RM304.6 million from RM290.9 million in 4QFY2018.
Stripping out the exceptional items reported in both quarters, Media Prima would have posted a net profit of RM9.7 million in 4QFY2019 versus a net loss of RM38.5 million in 4QFY2018.
Exceptional items in this case included the execution of an internal restructuring in 4QFY2019 and a one-off gain from a sale and leaseback arrangement in 2018.
Moving forward, Media Prima is expecting to save about RM70 million to RM80 million per annum from the staff rationalisation undertaken last year.
Some analysts are positive about the group’s progress thus far.
CGS-CIMB Research recently upgraded the stock to an “add” from “reduce”. It has a target price of 25 sen, which offers the stock an upside potential of over 40%. It closed at an all-time low of 14 sen last Friday.
“Media Prima narrowed its FY2019 core net loss far more than analysts expected. A trading opportunity could emerge as its loss burden is reduced with ample cost savings … after the stock’s 35% year-to-date spiral,” says the research house in a Feb 27 report.
“We cut our FY20-21F LPS by between 22% and 88% and now project FY22F to be profitable in the light of the strong cost-savings initiative. Admittedly, we like that Media Prima has finally done something to enforce an integration of its media assets. However, whether these initiatives bear fruit hinges on the workforce’s ability to execute plans successfully and the group’s capability to lure audiences to its platforms. The latter may require investments to prop up its content quality with competition in the media landscape at its stiffest,” the report adds.
AmResearch is still cautious about Media Prima’s near-term outlook and recommends a “hold” on the stock “in a challenging operating environment, coupled with the difficulty in monetising its digital initiatives and still-declining traditional media segments”.
“Media Prima still expects a challenging operating environment, particularly for its traditional media segment, although it believes its stronger digital presence would help partially offset any decline in earnings. Nevertheless, the group acknowledges that global uncertainties and the coronavirus (Covid-19) outbreak will delay its earnings recovery,” it says in a Feb 27 report.

Immediate-term target — return to profitability
Kamal believes Media Prima is on track to return to the black in this financial year.
“If you strip out the extraordinary items, we performed better last year than in 2018. So, going by that and generating significant cost savings from the restructuring, as well as our business units taking better advantage of what’s available in the market, I think the group can return to profitability. That’s the immediate-term target,” he says.
Kamal reckons that there is cause for optimism when it comes to Media Prima’s earnings because its latest quarterly results show that all the work and restructuring the group has done are bearing fruit.
“The cost savings are significant. So that, together with the greater efficiencies and better revenue generation, should make the company viable,” he reasons.
In 2017, Media Prima embarked on its three-year Odyssey Transformation Plan — a strategic initiative to reinvent the group.
The plan aimed to deliver three important targets: increase revenue contribution from commerce and non-advertising sources; generate income from digital initiatives; and expand revenue sources beyond Malaysia.
“We tried to compensate to get new revenue and investments and so on. But eventually, the writing was on the wall. You know you cannot move forward with that number of employees, given that the business is changing … we needed to reallocate resources.
“Not just realising it but also determining that for the company to go forward, it needed to be a lot leaner and smaller. It couldn’t be an industrial-era company; it had got to be an Industry 4.0 company. That was tough. There was absolutely no joy in making those cuts. For me, that was a big low,” Kamal says, adding that the group could not carry the cost base it had been carrying for a long time.
Media Prima announced a rationalisation that saw more than 500 job cuts last year.
The group had 4,236 employees in FY2015, which came down to 4,149 in FY2016, 4,039 in FY2017 and 3,897 in FY2018.
Moving forward, Kamal thinks traditional media is still relevant but he predicts the pie will shrink.
“Frankly, I think people are premature when they talk about the death of traditional media. Traditional media will survive into the future but it’s never going to enjoy the primacy it enjoyed 20 years ago. It needs to retain its relevance and think outside previous silos. Moving forward, everything will be multi-faceted and have digital components,” he says.
In FY2019, all of Media Prima’s traditional businesses — TV, radio and print — together with its home shopping segment were in the red while its out-of-home, digital media and content creation were in the black.
Kamal does not think digital will necessarily replace traditional revenue but digital earnings will continue to grow.
“I think traditional media businesses are still relevant and can operate profitably but they need to change their business model and accept operating on a lower cost basis,” he says.
So, what is next for him after Media Prima?
“I will probably spend the first month working on my golf game. That is something that has been neglected over the last three years,” Kamal laughs.
“It’s a good time for me to step back and recharge my batteries. I would like to do something but I will take some time to decide exactly what,” he quips.

Sumber : the edge markets
 
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