PETALING JAYA: Media companies Star Publications (M) Bhd and Media Prima Bhd's earnings forecast for the current financial year have been upgraded by analysts after results for their recently-concluded financial years fell in line with consensus estimates.
The results were in line with estimates by analysts polled by Bloomberg, research houses said in reports issued yesterday.
OSK Research said in its report to clients that Media Prima's core net profit for its financial year ended Dec 31, while in line with consensus, was also 8% above its expectations.
“We have revised our FY11 earnings forecast higher by 5.7% after upgrading Media Prima's revenue forecast for its subsidiary, The New Straits Times Press (M) Bhd (NSTP) and the TV segment following its recent upward revision on advertisement rates,” the research house said.
In the case of Star, AmResearch said its earnings would be well underpinned by healthy advertising expenditure (adex) spending momentum.
Star's results came in “a tad above” AmResearch's full-year forecast by 7%, it said in a note.
“All in all, we have tweaked our FY11-FY12 forecast earnings higher by 3% to 4% following our industry adex growth forecast of 9% for 2011 and the latest newsprint cost assumptions,” AmResearch said.
Advertisers in the country boosted their media spending by 15.8% to a record RM7.66bil last year (excluding pay TV), according to the latest information provided by The Nielsen Co Malaysia.
“We continue to like Star for its stronghold in the adex market share (24% of the total print industry) as backed by continued advertiser preference for English prints, (its) stable circulation and market leadership in ad-rates,” AmResearch said.
Star's net profit for the financial year ended Dec 31, 2010 rose 27.8% to RM184.94mil on revenue that gained 9.01% to RM1.06bil.
Star said in an announcement to Bursa Malaysia on Wednesday that net profit was higher as a result of the increase in revenue following the better performance of its print and electronic segments.
However, the company's fourth-quarter ended Dec 31 net profit was 11.35% lower at RM54.05mil on revenue that fell 5.6% to RM296.90mil.
Media Prima made a net profit of RM254.4mil, 31% higher than a year ago. Its fourth-quarter net profit was lower at RM100.3mil compared with RM192.3mil previously largely due to recognition of a negative goodwill amounting to RM55.4mil following its acquisition of the NSTP group.
Source: Star online, 25 Feb 2011