Propelling growth: (From left) SMG deputy chairman Tan Sri Kuan Peng Soon, Chor and Chan at the AGM. Aside from paying attention to the more contemporary issues, the company has also started enhancing its digital platforms.
PETALING JAYA: Star Media Group Bhd
(SMG) will be focusing on mergers and acquisitions (M&As) as a means to diversify its income stream going forward, says group chief executive (CEO) Chan Seng Fatt.
Speaking at SMG’s AGM here yesterday, Chan is optimistic of the group’s outlook, his hopes premised on its new strategy that focuses on identifying potential M&As that could be seen as profitable for the company to further fortify its revenue.
He is anticipating the strategy to provide better long-term earnings sustainability for the group, before adding that he hopes the group would see improved financial performance over the next two years.
At the same time, retiring chairman Tan Sri Chor Chee Heung said SMG was cognisant that it has to move forward with agility, capitalising on opportunities and adapt to shifting economic sentiment.
Additionally, Datuk Dr Mohd Aminuddin Mohd Rouse has retired as a director of the company.
“Leveraging on our diversified portfolio, we will continue to pay close attention to maximising various sustainable income streams to navigate cyclical headwinds, and we will also continuously reveal and optimise our asset portfolio to drive operational efficiencies and nurture long-term value creation,” he said.
Chan and Chor were responding to several questions from shareholders pertaining to the group’s direction in the future, in light of the hurdles faced by the media industry with the advent of digitalisation and smart mobile devices.
Due to release its results for the first quarter ended March 31 this week (1Q24), SMG had posted a net profit of RM7.5mil for the financial year ended Dec 31, 2023 (FY23), representing an 8.2% year-on-year (y-o-y) growth, while maintaining a revenue of RM220mil for both FY23 and FY22.
Notably, the print, digital and events segment of the group’s business experienced a pre-tax loss of RM1.3mil in FY23 compared to a pre-tax gain of RM4.5mil in FY22, although the loss was offset by a pre-tax earnings of RM8.1mil for its property development division.
When asked if SMG would entertain the idea of making the property development division its core business in light of its improving profitability compared to the print segment, Chan said: “We have not ventured into any new land bank for now, and the potential of this segment would be subject to the results of our current property projects.”
The group’s independent non-executive director Tee Chew Lay further commented on the issue that SMG has always been media-centric, and at present had no immediate plans to switch its core business into another industry.
“Instead, we will continue to review our strategies to improve our media offerings,” she said.
Looking ahead, both Chan and Chor dispelled the notion that the media sector has become a sunset industry, as the availability of news sources remain as relevant as ever.
Chan believes that it is of utmost importance for media companies to be able to defend their turf, which critically would involve capturing the readership of younger audiences these days, who, as he acknowledged, prefer social media and other forms of newsfeed.
“Readership cluster has indeed altered, giving rise to a change in topics of interest.
“As such, we have included more updated and trendy content, focusing on more current talking points like artificial intelligence (AI), e-sports, education and lifestyle.
“So hopefully, we can capture new groups of readers here,” he told shareholders.
Aside from paying attention to the more contemporary issues, he said SMG had also started enhancing its digital platforms, including performing platform auditing to improve visibility, before reiterating the fact that the group’s flagship paper, The Star, remains the most circulated English daily in the country.
On a separate note, Chan pointed out that the occupancy rate for Menara Star 2 in Petaling Jaya now stood at 12%, reassuring shareholders that the group was doing its best to improve tenancy despite the soft market conditions.
“We remain confident that the take-up rate for Menara Star 2 will improve going forward this year and into 2025,” he said.
