Astro Malaysia Holdings Bhd’s first-half FY2027 results were broadly in line with Kenanga Research’s expectations, as cost efficiencies and tax credits helped lift core earnings despite weaker subscription and advertising revenue.
Kenanga said Astro recorded 1HFY2027 core net profit of RM8.7 million, up 26% year-on-year, although subscription revenue continued to soften amid pressure on average revenue per user and likely subscriber declines.
For the second quarter, Astro reported a headline net loss of RM25.8 million, mainly due to RM58.4 million in unrealised foreign exchange losses arising from the weaker ringgit.
Kenanga said the depreciation increased the ringgit value of Astro’s US dollar-denominated satellite transponder lease liabilities, which stood at about RM1.23 billion.
The research house estimated that roughly half of these liabilities were hedged through derivatives, generating an offsetting gain of RM34.2 million and resulting in a net forex loss of RM24.2 million.
As the forex impact was non-cash and mark-to-market in nature, Kenanga excluded it from core earnings. After also adjusting for RM6.2 million in net asset impairments, it estimated 2QFY2027 core net profit at RM4.6 million.
Kenanga said weaker TV subscription revenue remained the main source of topline softness, reflecting Astro’s strategic move towards lower-priced products aimed at widening its customer base.
The house cut its FY2027 earnings forecast by 5% to account for weaker-than-expected advertising expenditure and subscriber net additions.
It maintained its Market Perform call and RM0.06 target price, based on an unchanged 0.25 times FY2027 forecast price-to-book valuation.
The research house said Astro could increasingly monetise its content through regional syndication and international streaming, reducing reliance on traditional pay-TV.
However, structural pressures remain, including competition from global streaming platforms, illegal set-top boxes, long-term satellite transponder commitments and emerging AI-driven music streaming services competing with radio.
