09 August 2012

Astro Malaysia IPO Update: Astro Malaysia unveils draft prospectus, plans to use 58% of the money that would potentially be raised for capital expenditure, 29.3% for repayment of bank borrowings, 8.6% for working capital and the rest for paying off its listing expenses

Astro Malaysia Holdings Bhd aims to list on the Main Market of Bursa Malaysia and has unveiled its draft prospectus on the Securities’ Commission website yesterday.

The joint principal advisers and joint managing underwriters to this pending initial public offering (IPO) exercise are CIMB Investment Bank Bhd, Maybank Investment Bank Bhd and RHB Investment Bank Bhd.

The satellite television (SatTV) and digital radio broadcaster said in the prospectus that it planned to use 58% of the money that would potentially be raised for capital expenditure, 29.3% for repayment of bank borrowings, 8.6% for working capital and the rest for paying off its listing expenses.

The draft prospectus for the sole SatTV provider in Malaysia showed that its revenues were on a steady upward trend increasing from RM3.24bil in the financial year ended Jan 31 (FY10) to RM3.66bil in the next year and eventually grew to RM3.89bil in FY12.

Net profits including minority interests, however, showed a more erratic trend initially increasing from RM613.93mil in FY10 to RM827.48mil in FY11, then declining to RM629.62mil in FY12.

Trend for earnings before interest, taxes, depreciation and amortisation (EBITDA), however, showed an increasing trend as well from RM986.2mil in FY10 to RM1.37bil in the next year and then seeing further growth to RM1.41bil in FY12.

The SatTV services provider saw net profit margins recorded in FY12 at 16.2% while EBITDA margins were at 36.4% in the same financial year as well.

“Pro forma depreciation and amortisation increased by RM100.9mil, or 40.3%, from RM250.4mil for FY11 to RM351.3mil for FY12,” it said.

“The increase was primarily attributable to depreciation arising from a higher deployment of Astro B.yond set-top boxes as a result of an increase in HD and PVR take-up by new and existing subscribers as well conversion,” it added.

Astro Malaysia, which had previously been listed under the name Astro All Asia Networks Plc, provides SatTV services to both Malaysian and Bruneian homes, the draft prospectus showed.

It also showed that total intangible assets stood at RM1.76bil against the next biggest asset component of property, plant and equipment at RM1.71bil.

Astro Malaysia’s total equity as at April 30 was a negative RM1.13bil while it said its total indebtedness, which also comprised contingent liabilities, was at RM4.56bil.

“The deficit position is primarily due to the reorganisation, whereby for accounting consolidation purposes, our acquisition of Measat Broadcast Network Systems Sdn Bhd (MBNS), our largest operating subsidiary, was accounted for as a capital reorganisation of MBNS and the difference between the consideration for MBNS and the net assets of MBNS at the date of acquisition has been taken to capital reorganisation reserve,” it explained in the draft prospectus.

“Notwithstanding the above, after taking into account the public issue, our group’s shareholders’ equity as it appears in the pro forma consolidated balance sheets as at April 30, is no longer in deficit,” it said.

It was previously reported before that the Astro relisting could be raising up to US$1.5bil (RM4.65bil).
Astro Malaysia Holdings Bhd is supported by about three million residential pay-TV users, making it the largest pay-TV operator in South-East Asia by subscriber base.

According to its draft prospectus, Astro has a market penetration of about 50% of Malaysian TV households, of which it has a market share of 99% in the residential pay-TV market in 2011.

The company surpassed its one million residential pay-TV subscriber mark in 2003, and the figure hit two million in 2007.

“Our leading position is reflected by our 156 TV channels as at June 30, of which 68 are Astro-created and branded channels.

“We distribute content to our customers via broadcast and on-demand programmes through our Direct-To-Home satellite TV, IPTV and Over-the-Top platforms, making our TV offerings increasingly platform agnostic in reaching our customers,” it said.

In the financial year ended Jan 31, the company produced about 8,000 hours of TV content and have produced or commissioned for production over 40,000 hours of TV content as at June 22, being the last practical date for certain information to be obtained and disclosed in the draft prospectus.

“Based on our existing position, we believe we are well positioned to capitalise on the potential growth of the Malaysian economy and a young population demography that is open to the adoption of new technologies,” it said.

This was based on the Independent Market Research (IMR) Report that forecast Malaysia's nominal gross domestic product to grow at a compounded annual growth rate (CAGR) of 8% from 2011 to 2016, and the expected growth of Malaysian average monthly household income at a CAGR of 5.3% from 2011 to 2016.

“We believe this economic growth will contribute to higher consumer spending in media, expansion of the advertising market and an increase in residential pay-TV subscriber penetration from 50% of Malaysian TV households in 2011 to 63% in 2014,” it said.

In its draft prospectus, Astro mentioned several strategies to maintain its leadership in the consumer media entertainment sector in Malaysia, notably to leverage on new technologies to develop products that enhance reach and service proposition.

“We will continue to capitalise on the emergence of new technologies and develop new products to expand our customer reach and enhance our service proposition to consumers,” it said, along with its plans to pursue a targeted acquisition strategy to grow its subscriber base.

Astro's radio comprises nine commercial stations available over FM, DTH satellite TV, IPTV and mobile platforms as well as the Internet, which includes the highest-rated radio stations in Malay, Chinese, Indian and English languages in terms of listenership.

In April, the company's radio operations recorded about 13 million weekly listeners, capturing 52% share of listenership in Malaysia. It also commands 53% share of the radio advertising expenditure for the three months ended April 30.
Source: www.thestar.com.my


Post a Comment