Media in the red for 1Q2009

Media announced its results for 1Q2009 ended 31/3/2009, where its turnover dropped by 32% q-o-q or 12% y-o-y to RM141 million. The sharp drop in turnover was attributable to lower advertising revenue generated by all its media assets. The drop in turnover of 32% q-o-q recorded in 1Q2009 was higher than the 20%-decline suffered in 1Q2008 and this can only be attributable in the sharp economic slowdown experienced in 1Q2009. With operating expenses inching up slightly to RM145 million, Media incurred an operating loss of RM2.5 million (as compared to an operating profit of RM21.3 million achieved in 1Q2008).

Like 4Q2008, the current quarterly results was dragged down by provision for diminution in value of investment of RM13.3 million from a private-equity media funds set up by Media's wholly-owned subsidiary, mm Studios Sdn Bhd & SBC Markwendell Inc (on a 70:30 JV). This exceptional loss aggravated Media's bottom-line, leading to a net loss of RM23.2 million.



Media's technical outlook did not improve significantly as anticipated in the previous post (here). The stock had briefly broken above its downtrend line resistance of RM1.40 on May 8. The breakout could not sustain & the downtrend remained. The immediate support is at RM1.20, with next support at RM1.00.


Chart: Media's daily chart as at 15/5/2009 (Source: Quickcharts)

Based on challenging operating environment & continuous, albeit diminishing negative impact from the private-equity media funds to be launched, Media's bottom-line may not rebound back any time soon. This, plus the negative technical outlook, will make Media a poor performer for the near-term.