Star Media Group Bhd on Thursday posted a net loss of RM54.76 million in the third quarter ended Sept 30, 2021 (3QFY21), compared with a net profit of RM26.92 million in the corresponding quarter a year ago, dragged by a one-off reversal of compensation income.
The group also recorded a lower revenue of RM46.24 million, down 4.08% from RM48.21 million previously, its filing to Bursa Malaysia showed. No dividend was declared.
The group said if the one-off reversal of compensation income that amounted to RM50.54 million is excluded, its loss before tax would have narrowed by 76% to RM4.15 million from RM17.41 million in 3QFY20.
The compensation income was awarded in FY20 for the late delivery of vacant possession of an investment property under construction from Jaks Island Circle Sdn Bhd (JIC), a subsidiary of JAKS Resources Bhd. But the sum has now been reversed following the Court of Appeal’s decision in July this year that their legal dispute necessitates a full trial.
Compared with the preceding quarter of 2QFY21, the group’s net loss widened by 44.7% from RM37.85 million, while revenue retreated 1.07% from RM46.74 million.
For the nine months ended Sept 30, 2021 (9MFY21), the group’s net loss widened to RM106.71 million from RM4 million a year earlier, while revenue dropped 6.79% to RM135.6 million from RM145.47 million.
On prospects, the group said it has continued to progress with its digital transformation initiatives to improve cost and operational efficiencies.
“March 2021 marks a year since MCO 1.0 and the implementation of the paywall for The Star Online. This follows a group-wide ‘Subscribe and Win’ campaign that was launched in 1Q to drive more subscriptions and there has been steady growth despite the uncertain economic situation.
“The group experienced a significant growth in the Malay target segment with mStar taking the lead in its content category, peaking at 8.5 million unique visitors in September,” it said.
In view of rapid changes in media consumption trends, the group said it will focus on sustaining its investment in the digital space and attracting digital revenue.
This will be done by introducing new products and rejuvenating existing ones to keep up with the changing market needs, it added.
It further said it will remain focused on its digital transformation initiatives and strategies across all media platforms and will continue to improve its operational efficiencies.
“Amid the challenging media industry landscape, the group is also on the lookout for merger and acquisition opportunities as well as to penetrate into new businesses that have a promising outlook,” it added.
Star Media Group closed unchanged at 34.5 sen on Thursday, valuing the group at RM254.8 million.
This articles first appeared on The Edge Markets
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