KUALA LUMPUR: AmResearch Sdn Bhd has cut its financial year 2014-2016 earnings forecast by two-five per cent for Media Prima Bhd following its below expectation second quarter results.
For the quarter ended June 30, Media Prima's pre-tax profit fell to RM48.9 million from RM81.2 million registered in the same period a year ago.
Revenue fell to RM388.6 million from RM466.3 million previously.
For the six months period, earnings fell 28 per cent, year-on-year, (y-o-y), in tandem with a revenue decline of 11 per cent, y-o-y.
Media Prima said the weaker results were achieved amid the challenging environment due to weak consumer sentiment.
This was exacerbated by the MH370 and MH17 disasters, where Media Prima needed to cancel or reschedule certain programmes.
AmResearch said it believed the softer revenue was also a result of a higher base in the previous year due to the General Election campaign expenditure.
"Overall, while we are positive of Media Prima's longer-term fundamentals, we believe near-term earnings would be muted.
"The expected advertising expenditure contributions from the major sporting events this year will not likely make up for the weak sentiment, as the expectation of the next round of fuel subsidy cut around the corner would likely dampen consumer sentiment further," it said in a note today.
AmResearch maintained its ‘hold’ recommendation on Media Prima.
At 11.47am, Media Prima's share was five sen lower at RM2.34 with 1.181 million lots transacted.-- Bernama