Media Prima’s Q3 FY2025: Navigating a Challenging Media Landscape

A Look into the Latest Financial Performance and Strategic Direction

Greetings, fellow Malaysian investors! Today, we’re diving deep into Media Prima Berhad’s interim financial report for the third quarter ended 31 March 2025. This report offers a crucial glimpse into the performance of one of Malaysia’s leading media conglomerates amidst an evolving market. While the numbers reflect a challenging period, particularly in profitability, the report also highlights the company’s ongoing strategic efforts to build resilience and foster long-term sustainable growth. Let’s unpack the key figures and insights to understand where Media Prima stands and what lies ahead.

Core Financial Highlights: A Mixed Bag of Performance

Media Prima’s latest financial report presents a picture of resilience in revenue despite a significant dip in profitability. The group continues to navigate a dynamic economic environment, with both advertising and non-advertising segments contributing to the overall performance.

Quarter-on-Quarter Performance (Q3 FY2025 vs Q3 FY2024)

For the third quarter ended 31 March 2025, Media Prima experienced a marginal reduction in revenue, primarily due to lower advertising revenue, though this was partially offset by a strong increase in non-advertising revenue. However, net profit saw a notable decline.

Revenue for the quarter saw a marginal 0.8% decrease, from RM213.2 million to RM211.6 million. This was largely due to a dip in advertising revenue, though a robust 11% increase in non-advertising revenue provided some cushion. Despite this revenue stability, the Group’s net profit for the quarter significantly reduced by 46.5%, from RM1.9 million to RM1.0 million, impacting basic earnings per share, which fell by 45.5% to 0.12 sen.

Cumulative Nine-Month Performance (9M FY2025 vs 9M FY2024)

Looking at the broader nine-month picture, the trends are similar, with revenue slightly lower and profitability seeing a more substantial decline.

• Revenue: Decreased by 2.5% to RM634.5 million for the nine-month period, down from RM650.9 million in the prior year. This was mainly attributed to a 4% drop in advertising revenue amidst a challenging market.
• Net Profit: Saw a significant reduction of 75.2%, falling to RM6.9 million from RM27.9 million in the comparative period. This substantial decline was primarily driven by lower revenue and a reduction in other operating income.
• Basic EPS: Similarly, basic earnings per share for the nine-month period declined by 75.2% to 0.61 sen, compared to 2.46 sen previously.

Current Quarter vs. Immediate Preceding Quarter (Q3 FY2025 vs Q2 FY2025)

Comparing the current quarter to the immediate preceding quarter (Q2 FY2025), a sequential decline is also observed:

• Revenue: Decreased by 7.2% to RM211.6 million from RM228.0 million in the quarter ended 31 December 2024, mainly due to lower advertising revenue.
• Profit Before Tax: Declined by 43.7% to RM4.9 million from RM8.7 million. This reduction occurred despite an encouraging performance from the Home Shopping segment, which partially offset the overall decline.

Segmental Performance: A Closer Look at Business Units

Media Prima’s diverse business units showed varied performance, reflecting the complex nature of the media industry. Here’s how each segment fared:

Quarter-on-Quarter Segment Performance (Q3 FY2025 vs Q3 FY2024)

• Home Shopping: Revenue increased by 12%, driven by improved sales during the festive season. This segment continues to be a bright spot.
• Broadcasting: Experienced a 6% growth in revenue, supported by both advertising and non-advertising streams.
• Publishing: Saw a 2% decline in revenue. While advertising revenue decreased, growth in newspaper printing and distribution partially mitigated the impact.
• Omnia: Segment revenue reduced marginally by 3%.
• Out-of-Home: Faced a 5% reduction in revenue, mainly due to lower overall display revenue.
• Digital Media: Posted a 16% lower revenue, attributed to reduced advertising and inter-segment shared service revenue.

Nine-Month Segment Performance (9M FY2025 vs 9M FY2024)

• Home Shopping: Revenue increased by 7%, a testament to successful campaigns and new product offerings.
• Publishing: Revenue increased by 1%, with higher newspaper printing and distribution revenue partially compensating for lower advertising.
• Digital Media: Revenue declined by 3% due to lower advertising and reduced inter-segment shared service revenue.
• Omnia: Revenue decreased by 4%, primarily from lower advertising revenue in Television Networks, though partially offset by growth in the Group’s Audio platform.
• Broadcasting: Despite ongoing challenges in television network advertising, higher audio advertising revenue helped mitigate the overall 4% decrease in segment revenue.
• Out-of-Home: A 6% decrease in revenue was observed, primarily due to lower display revenue.

Financial Health Check: Balance Sheet and Cash Flow

Beyond the revenue and profit figures, a look at Media Prima’s balance sheet and cash flow provides insights into its financial stability and liquidity.

Balance Sheet Snapshot (as at 31 March 2025 vs 30 June 2024)

The Group’s financial position remains relatively stable, with slight adjustments in key areas:

• Total Assets: Marginally decreased to RM1.42 billion from RM1.44 billion.
• Total Liabilities: Also saw a slight decrease to RM715.5 million from RM720.4 million.
• Total Equity: Decreased slightly to RM708.9 million from RM718.9 million.
• Net Assets Per Share: Stood at 64.38 sen, a slight dip from 65.27 sen.
• Cash and Bank Balances: Increased slightly to RM379.7 million from RM375.2 million, indicating a healthy cash position.
• Total Borrowings: Increased to RM232.4 million from RM213.1 million, mainly due to higher current Islamic term loans.

Cash Flow Insights (9M FY2025 vs 9M FY2024)

Cash flow performance shows a mixed picture, with strong operational cash generation but increased outflows from investing and financing activities:

• Net Cash Flows Generated from Operating Activities: A significant improvement, increasing to RM162.4 million from RM129.8 million, indicating healthy core business operations.
• Net Cash Flows Used in Investing Activities: Increased substantially to RM139.8 million outflow from RM82.1 million outflow. This was primarily driven by higher additions to property, plant and equipment, and intangible assets.
• Net Cash Flows Used in Financing Activities: Increased to RM38.0 million outflow from RM14.1 million outflow, mainly due to higher drawdown and repayment of borrowings, and dividend payments.
• Net Movement in Cash and Cash Equivalents: Resulted in a net outflow of RM15.5 million, a shift from a net inflow of RM33.5 million in the comparative period.

Risks and Prospects: Charting the Path Forward

Media Prima acknowledges the challenging market conditions but remains committed to its long-term strategic objectives. The company’s three-year roadmap is central to its efforts to enhance content quality, strategically premiumise its inventory, and actively identify and develop new revenue streams. These initiatives are designed to build resilience against prevailing market challenges and establish a robust foundation for medium to long-term sustainable growth, with continuous enhancements to operational effectiveness.

However, the Group maintains a prudent outlook for the remainder of the financial year. They anticipate continued pressure on advertising expenditure due to persistent economic uncertainties and the rapidly evolving media landscape. This suggests that while strategic initiatives are in place, the path to recovery may still face headwinds.

Overall, Media Prima is in a transitional phase, working to adapt its business model to the digital age. While the recent financial results indicate significant hurdles, the strategic direction is clear. Do you think Media Prima can successfully pivot and maintain its position in the Malaysian media landscape in the coming years? Share your thoughts and insights in the comments below!