Media Prima planning ‘to trim’ workforce again

CIMB analyst says Media Prima, at a briefing of its first half financial results, informed that, due to lower revenues, it is considering various cost-cutting measures, including trimming its workforce.

KUALA LUMPUR: Media Prima Bhd – the group behind media outlets such as The New Straits Times and TV3 – is considering trimming its workforce again.

CIMB Investment Bank Bhd analyst Mohd Shanaz Noor Azam was quoted by The Edge as saying this was one of the cost-cutting measures the media giant was exploring in the wake of lower revenue.

Shanaz wrote in a note today that Media Prima said this during an analyst briefing on the company’s second quarter and first half results.

“No surprises from Media Prima’s 1H17 results briefing, but the group shared that it is exploring further cost savings initiatives, given the decline in group revenue.

“For example, it plans to trim down its workforce, in order to rationalise the group’s cost structure. To recap, Media Prima carried out a mutual separation scheme in 2014, which effectively reduced the group headcount by about 10%,” The Edge quoted Mohd Shanaz as saying.

Yesterday, Media Prima said it posted a net loss of RM132.91 million in the second quarter ended June 30, 2017 (2QFY17), versus a net profit of RM27.92 million a year earlier. Revenue fell to RM328.77 million, from RM349.55 million.

Media Prima said 1HFY17 net loss stood at RM171.37 million, compared with a net profit of RM45.16 million a year earlier. Revenue was lower at RM600.97 million, versus RM653.61 million in 1HFY16.

The Edge quoted analysts as saying Media Prima’s 1HFY17 financial performance was below expectation.

Meanwhile, The Star reported CIMB Equities Research as saying it expected Media Prima to remain in the red in FY17, with declines in traditional print and TV advertising expenditure (adex).

“We think 2017 will be challenging due to the sluggish adex outlook given the persistent weakness in consumer sentiment from uncertainties in the domestic economy.

“The ongoing shift in consumer preference towards digital media is also negatively affecting the adex share for traditional platforms,” The Star quoted CIMB as saying.

Meanwhile, AllianceDBS Research said in an investor note: “Its earnings outlook is uninspiring in the near term as adex spending has remained weak due to the poor consumer sentiment.” - FMT