KUALA LUMPUR: Media Prima Bhd has returned to the black with a net profit of RM8.7 million for the first half of this year.
This sharply reversed a net loss of RM179.7 million in the same period a year ago on the back of its on-going business transformation initiatives to become Malaysia’s leading digital-first content and commerce company.
Media Prima, the largest integrated media group, also registered its first quarterly profit since the final quarter of 2016.
Its net profit for the second quarter surged more than five times to RM31.7 million year-on-year from a net loss of RM138.39 million.
Media Prima, which currently ranks third in the country in terms of digital reach, posted a revenue RM623 million for the first six months, up 3.7 per cent to from RM601.0 million in the same period a year ago, attributed to higher contributions from the group’s digital and commerce segments.
The group aims to increase digital revenue contribution to eight per cent by year-end, compared to the group’s three percent target for 2017.
“The key catalysts include investing in more digital content, growing commerce revenue through integrated media and maximising the value of its existing assets,” it said in a statement.
Its digital revenue increased to RM44.8 million for the first half of this year against RM14.9 million in the same period last year, driven by higher digital advertising revenue across all platforms.
Commerce revenue from Media Prima’s home shopping business surged 60.8 per cent to RM96 million from RM59.7 million last year.
This segment continued to gain traction with a customer base of 941,000 shoppers in the first six months from 771,300 in the first three months this year.
Group chairman Datuk Mohd Nasir Ahmad said the financial results re-affirmed that Media Prima had implemented the right strategies to improve its performance while mitigating the impacts of the challenges affecting the media industry worldwide.
“Last year, the group focused on clearing-off major exceptional items which allowed us to begin the new financial year on a stronger foundation.
“This year, we continued to accelerate our digital-first transformation plans across the group while exercising prudent financial and risk management,” he said.
Nasir said the group would remain focused on doing what it does best across its digital and traditional assets, with a view of attaining sustainable profitability and delivering high returns to its shareholders.
Group managing director Datuk Kamal Khalid said catering to the needs and consumption patterns of the group’s audiences was part of its core values.
It had seen encouraging results from taking a platform-agnostic approach in how it delivered its content.
“The group’s digital revenue has grown at a double-digit rate over the last year and we are confident that the various initiatives we have taken over these six months will strengthen our position,” he said.
In view of maximising the value of its existing assets, Kamal said the group had entered into a sale and leaseback exercise of its properties for RM280 million. This will transform the company into an asset-light group, better positioned for new revenue opportunities and expansion in the digital and commerce segments.
The sale and purchase agreements with PNB Development Sdn Bhd involve properties owned by The New Straits Times Press (M) Bhd which include Balai Berita Shah Alam and Balai Berita Bangsar.
Upon completion of the proposed sale, the group will realise an estimated gain of RM127.7 million.
Kamal said operations would continue as usual as Media Prima entered into tenancy agreements with PNB Development for Balai Berita Shah Alam and Balai Berita Bangsar.
This exercise will generate total savings of RM10 million per annum, and allow the group to preserve its cash reserves for its business transformation efforts, he added.
“Barring unforeseen circumstances, we expect this exercise to equip Media Prima with greater agility to transform itself in order to enhance shareholder value,” said Kamal.
The proposed sale and proposed tenancy is expected to be completed by the fourth quarter of 2018.