4 th Quarter FY19 Results 26 March 2019 Disclaimer This document - - PowerPoint PPT Presentation

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4 th Quarter FY19 Results 26 March 2019 Disclaimer This document - - PowerPoint PPT Presentation

4 th Quarter FY19 Results 26 March 2019 Disclaimer This document contains certain forward-looking statements with respect to Astro Malaysia Holdings Berhads (Astro) financial condition, results of operations and business, and


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4th Quarter FY19 Results

26 March 2019

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This document contains certain forward-looking statements with respect to Astro Malaysia Holdings Berhad’s (“Astro”) financial condition, results of operations and business, and management’s strategy, plans and objectives for Astro. These statements include, without limitation, those that express forecasts, expectations and projections such as forecasts, expectations and projections in relation to new products and services, revenue, profit, cash flow, operational metrics etc. These statements (and all other forward-looking statements contained in this document) are not guarantees of future performance and are subject to risks, uncertainties and other factors, some of which are beyond Astro’s control, are difficult to predict and could cause actual results to differ materially from those expressed or implied or forecast in the forward-looking statements. These factors include, but are not limited to, the fact that Astro operates in a competitive environment that is subject to rapid change, the effects of laws and government regulation upon Astro’s activities, its reliance on technology which is subject to risk of failure, change and development, the fact that Astro is reliant on encryption and other technologies to restrict unauthorised access to its services, failure of key suppliers, risks inherent in the implementation of large-scale capital expenditure projects, and the fact that Astro relies on intellectual property and proprietary rights which may not be adequately protected under current laws or which may be subject to unauthorised use. All forward-looking statements in this presentation are based on information known to Astro on the date hereof. Astro undertakes no

  • bligation publicly to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

This presentation has been prepared by Astro. The information in this presentation, including forward-looking statements, has not been independently verified. Without limiting any of the foregoing in this disclaimer, no representation or warranty, express or implied, is made as to, and no reliance should be placed on, the fairness, accuracy or completeness of such information. Astro and its subsidiaries, affiliates, representatives and advisers shall have no liability whatsoever (whether in negligence or otherwise) for any loss, damage, costs

  • r expenses howsoever arising out of or in connection with this presentation.

Disclaimer

1 | 4QFY19 results

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SLIDE 3

NB: (1) Normalised PATAMI excludes post-tax impact of (i) unrealised forex gain/(loss) 4Q FY19: RM 17mn, 4Q FY18: RM 69mn due to mark-to- market revaluation of transponder-related finance lease liabilities and (ii) 4Q FY19: one-off separation scheme cost of RM 58mn

4Q FY19 key performance highlights

2 | 4QFY19 results

EBITDA -2%

  • Norm. PATAMI (1) +42%

RM112mn→ RM159mn Solid norm. PATAMI margin of 12%

FCF of RM 179mn

  • 12% from RM 204mn

152% of PATAMI

Revenue -1% E-commerce +16%

RM1.39bn→ RM1.37bn Revenue resilient RM196mn→ RM196mn Leading adex share of 44%, 76% and 5% for TV, Radio and Digital RM85mn→ RM99mn Strong revenue growth recorded

4Q FY18 vs 4Q FY19

RM391mn→ RM382mn Healthy EBITDA margin of 28% (34% excluding one-off separation scheme cost)

  • Increased

reach

  • 75%

to 77% household penetration

  • Sterling

e-commerce performance – highest ever quarterly revenue

  • f

RM99mn

  • Adex

with the biggest growth of 45% coming from digital

  • Differentiation

factor through vernacular content and talent underpinning 75% TV viewership share

Adex +0.2%

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SLIDE 4

NB (1) TV household data sourced from the Department

  • f

Statistics Malaysia and Media Partners Asia (2) Household penetration comprises residential Pay-TV customers and NJOI customers (3) Viewership share is based on DTAM deployed by Kantar Media (4) Audience measurement is provided by GfK (5) Average monthly unique visitors to Astro’s digital assets in the last 12 months as sourced from comScore (6) Connected set-top boxes (STBs) are internet-ready and have access to Astro’s On Demand library of content (7) Normalised PATAMI excludes post-tax impact

  • f

(1) unrealised forex gain/(loss) FY19: (RM 41mn), FY18: RM 93mn due to mark-to-market revaluation of transponder- related finance lease liabilities and (2) FY19: one-off separation scheme cost of RM58mn (8) Numbers may not add up due to rounding differences

3 | 4QFY19 results

FY19 overview

Scaling reach…

FY18 FY19 Growth TV households (000s)(1) 7,321 7,439 2% TV household penetration(2) 75% 77% 2 pp TV customer base (000s) 5,489 5,713 4% Pay TV ARPU (RM) 99.9 99.9

  • Astro TV viewership share(3)

77% 75%

  • 2 pp

Radio listenership (mn) (4) 16.5 16.2

  • 2%

Average monthly unique visitors (mn)(5) 6.9 8.3 20% Connected STBs (000s) (6) 804 1,003 25% FY18 FY19 Growth Revenue (RM mn) 5,531 5,479

  • 0.9%

Adex (RM mn) 722 687

  • 5%

EBITDA (RM mn) 1,820 1,605

  • 12%

EBITDA margin 33% 29%

  • 4 pp

Normalised PATAMI (RM mn) (7) 678 563

  • 17%

FCF (RM mn) 1,364 1,291

  • 5%

EPS (RM sen) 14.8 8.9

  • 40%

…enabling resilient results

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SLIDE 5

Digital Brands

  • Largest Pay-TV
  • perator in SEA
  • Serving 5.7mn

households

  • 77% household

penetration

  • 44% TV adex share
  • 1mn connected STBs
  • 8.3mn avg monthly

unique viewers across

  • ver 25 digital brands
  • Gempak is the No. 1

digital entertainment portal in Malaysia

  • 5% digital adex share
  • 24/7 multilanguage

shopping experience

  • 1.8mn registered

customers

  • 11 radio brands
  • #1 highest rated

stations across 4 key languages

  • 14.8mn monthly digital

streams & 16.2mn weekly listeners

  • 76% radex share

Leading content & consumer company

TV DIGITAL RADIO COMMERCE CONTENT

  • #1 premium content

creator & aggregator

  • Investing in content

verticals with regional reach

  • Produced 12.6k

hours of content in FY19 4 | 4QFY19 results

NB: (1) Cumulative count since inception (2) Connected set-top boxes (STBs) are internet-ready and have access to Astro’s On Demand library of content

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1,121 1,140 1,149 1,107 1,076 1,162 1,107 1,073 143 208 175 196 151 161 179 196 62 70 73 85 84 94 98 99 100.80 100.80 100.70 99.90 99.60 99.90 99.90 99.90 20 30 40 50 60 70 80 90 100 110 120

200 400 600 800 1,000 1,200 1,400 1,600 1,800 2,000

1Q FY18 2Q FY18 3Q FY18 4Q FY18 1Q FY19 2Q FY19 3Q FY19 4Q FY19

GoShop (+29%) Adex (-5%) Subscriptions/ Others (-2%) ARPU (+0%)

1,326 1,420 1,397 1,368 1,417 1,311 1,388 1,384

Revenue resilient underpinned by growth drivers

(RM mn) Total revenue

NB (1) Disclosed as Subscription revenue and Other revenue in our financial statements, includes revenue streams such as TV subscription, licensing income, programme sales, NJOI revenue and theatrical revenue (2) YoY growth refers to FY19 vs FY18 (3) Numbers may not add up due to rounding differences

(1)

YoY growth (2)

5 | 4QFY19 results

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SLIDE 7

YoY growth

4% 5% FY18 FY19

NB (1) Advertising income is net of commissions and discounts (2) YoY growth refers to FY19 vs FY18 (3) Audience measurement is provided by GfK. Share of radex is based on internal estimates (4) Viewership share is based on DTAM deployed by Kantar Media. Share of TV adex is based on Astro and Group M’s estimates (5) Malaysia gross adex figures (covering TV, print, radio, cinema, in store media, outdoor and digital) are based on Nielsen and Group M’s data (6) Numbers may not add up due to rounding differences

44% 44% FY18 FY19 6.9 8.3 FY18 FY19

70 117 92 109 80 80 100 107 67 83 73 76 63 69 64 73 6 8 10 11 8 12 14 16 143 208 175 196 151 161 179 196

1Q FY18 2Q FY18 3Q FY18 4Q FY18 1Q FY19 2Q FY19 3Q FY19 4Q FY19

TV Radio Digital Total 16.5 16.2 FY18 FY19

Strong adex momentum in 2H FY19

Advertising income (RM mn)

(2)

  • 10%
  • 5%

(1)

Total Malaysia gross ADEX YoY growth OVERALL ADEX

  • 2%

DIGITAL 20% RADIO

  • 12%

TV

  • 5%

(2)(5)

77% 75% FY18 FY19 73% 76% FY18 FY19

Share of radex Share of TV adex Radio listeners (mn) (3) TV viewership share

(4)

  • 5%

43%

Share of digital adex Avg monthly unique visitors (mn)

6 | 4QFY19 results

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405 353 447 408 352 602 418 429 624 690 706 778 665 693 663 737 35% 39% 30% 28% 35% 20%(3) 34% 28%

  • 50%
  • 40%
  • 30%
  • 20%
  • 10%

0% 10% 20% 30% 40% 50%

  • 500

1,000 1,500 2,000

1Q FY18 2Q FY18 3Q FY18 4Q FY18 1Q FY19 2Q FY19 3Q FY19 4Q FY19 EBITDA margin Content cost/TV revenue Other expenses Content costs

Relentless focus on operational efficiencies

Total cost

NB (1) Content costs are disclosed as part of cost of sales in our financial statements (2) Other expenses include marketing and distribution costs, administrative expenses, STB installation and smartcard costs, depreciation and amortisation, as well as maintenance costs (3) Higher content cost due to FIFA World Cup 2018 (4) Normalised EBITDA margin excludes one-off separation scheme cost (5) Numbers may not add up due to rounding differences

28% 36% 33% 30% 48% 34% 34% 36%

7 | 4QFY19 results

Normalised EBITDA margin

  • f 34%(4)

(RM mn) 1,029 1,043 1,153 1,186 1,017 1,295 1,081 1,166

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SLIDE 9

NB (1) Numbers may not add up due to rounding differences

Disciplined capex spend

as % of revenue (RM mn)

163 200

166 3% 4% 3% FY17 FY18 FY19 as % of revenue Key capex investments in FY19 include: ▪ Technology infrastructure ▪ Customer experience ▪ Product and service upgrading Cash capex ▪ STBs/ODUs are owned by Astro, and are capitalised ▪ STBs/ODUs are conservatively amortised over 3 years; note that actual useful life is typically greater than 5 years ▪ Discretionary 36 month bullet payment vendor financing is available for Astro for STB/ODU purchases ▪ RM552mn (FY18: RM710mn) of vendor financing recorded in payables, of which RM141mn is current and RM412mn is non-current

246 237

220 4% 4% 4% FY17 FY18 FY19

8 | 4QFY19 results

(RM mn) Set-top box (STB) capex

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SLIDE 10

Strong cash generation capabilities

2,016 1,899 652 608 1,364 1,291 Cash from

  • perations

Cash from investing Free cash flow Cash from

  • perations

Cash from investing Free cash flow

(1) (2) (2) (1)

177% 279% as % of PATAMI (RM mn) FY18 FY19 Free cash flow

…enabling significant flexibility on capital management and dividend policy

NB (1) Excludes investments, disposals and maturities of unit trust and money market funds (2) Excludes repayments of vendor financing and payments of finance leases, which are categorised as cash from financing for consistency with Bursa disclosure (3) Numbers may not add up due to rounding differences

9 | 4QFY19 results

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▪ Leveraging on invested capital, AMH continues to be highly cash generative ▪ The Board of Directors of AMH has declared a quarterly dividend of 1.50 sen per share for 4Q FY19 ▪ Quarterly dividend entitlement and payment dates 10 April 2019 and 25 April 2019 respectively

Quarterly dividend announcement

10 | 4QFY19 results

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FY20 key focus areas

11 | 4QFY19 results

  • Accelerate digital adex

to drive advertising

  • Grow commerce by

expanding customer base and widening product offerings

  • Activate NJOI prepaid

buys with more content

  • ptions and easier

purchasing

  • Deepen investment in

data analytics for better customer insights and conversions

  • Improve customer

service across all touchpoints

  • Push premium user

experience through tech upgrades for seamless experience across devices

  • Sustain leadership as

No.1 premium content creator in Malaysia

  • Comprehensive

content slate with focus on vernacular, live sports and regional

  • Partnerships with OTT

players

  • Extend 360 content

experience

  • Better value to

customers through introduction of new bundled content and broadband offering

  • Offer exclusive

rewards and privileges to customers

REDEFINE Value proposition GROW Other revenues RESET Customer experience REFRESH Content REWARD Customers

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SLIDE 13

First digital anti-piracy summit organised by MCMC

12 | 4QFY19 results

Piracy Overview in Malaysia Key Stats (2017)

▪ RM2.3bn loss

in national revenue and induced spending

▪ RM330mn loss

in government taxes

▪ 3,339 jobs

in media industry Astro participated in KLDCAPS organised by MCMC, Coalition Against Piracy (CAP) and Asia Video Industry Association (AVIA). Held on 14 February 2019, KLDCAPS was joined by over 1,000 participants including government bodies, local & global content creators & distributors, artistes, legal firms, trade associations and media consultants

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SLIDE 14

Available across all platforms

App and website

Revenue (RM mn) Registered Customers (mn)

  • Varied content across multiple platforms to cater to our

different dialect speaking customer base featuring Mandarin, Cantonese, Hokkien and Tamil speaking hosts

  • Celebrity anchored programme featuring Dato’ Sri Siti

Nurhaliza broke Go Shop’s sales record during the launch

  • f Vantage cookware in January 2019

Commerce delivers record performance

290 374 FY18 FY19

29% 13 | 4QFY19 results

1.3 1.8 FY18 FY19

38%

COMMERCE

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SLIDE 15

National Fiberisation and Connectivity Plan (NFCP)

Astro offers content ISPs offer broadband

Better customer value proposition, with content-broadband

  • ffering at a competitive price

partner with

Maiden foray into the broadband space with introduction of broadband bundling in Jasin, Melaka

TV

Introducing new broadband bundle

14 | 4QFY19 results

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734 929 4Q FY18 4Q FY19 25% 75% TV Viewership Share 3:49 3:35 2:06 2:07 FY18 FY19

  • Avg. Time Spent/Day (hrs)

13.3 12.8 7.2 7.1 FY18 FY19

  • Avg. Daily Viewers (mn)

Astro FTA 1.6 2.2 4Q FY18 4Q FY19

  • Avg. Weekly Viewing (mins)

Registered Users (1) (mn) Monthly Active Users (4) (’000) +27% +32%

  • 40%

NB: (1) Cumulative count since inception (2) Connected set-top boxes (STBs) are internet-ready and have access to Astro’s On Demand library of content (3) Target Audience: Kantar Media, Dynamic TV Audience Measurement (DTAM). All Astro Pay-TV viewers (4) Source: App Annie as at 31 January

804

1,003

FY18 FY19 Total Connected STBs (1)(2) (000s) +25% 23 54 4Q FY18 4Q FY18 Total Video Downloads (mn) +135% 395 446 4Q FY18 4Q FY19

  • Avg. Weekly Viewing (mins)

+13%

Strong growth in non-linear viewing through VOD

TV

On Demand OTT

  • 4%
  • 6%

15 | 4QFY19 results

247 149 4Q FY18 4Q FY19

CONTENT

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Connected STBs hit 1 million mark drives OD viewing

Connected STBs

(+25% YoY)

1.0mn 54mn

OD Downloads (+135% YoY) OD Buys (+87% YoY)

346k

Connected STBs average weekly viewing hours

48 hrs

households are multiscreen customers (3)

1 in 3

NB (1) YoY refers to 4QFY18 vs. 4QFY19 (2) Connected set-top boxes (STBs) are internet-ready and have access to Astro’s On Demand library of content (3) Multiscreened customers are those with connected STBs and Astro Go (OTT)

(1) (1)

16 | 4QFY19 results

CONTENT

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SLIDE 18

Vernacular content underpins viewership share

17 | 4QFY19 results

FTA 25% Vernacular content 64% Others 36% Astro 75%

FY19 TV Viewership Share

Key Chinese and Indian IPs

TV viewership 3.9mn 3.9mn 3.3mn

Maharaja Lawak Mega 2018 Evening Edition Astro Classic GM Thigil S4

TV viewership 436k 395k 194k

193

channels

75

Astro-branded channels

30

channels

Pay-TV NJOI

NB (1) Number of channels as at 4Q FY19 (2) Target Audience: Kantar Media, Dynamic TV Audience Measurement (DTAM). All Astro Pay-TV viewers

CONTENT

Tak Ada Cinta Sepertimu

Key Malay IPs

Gegar Vaganza Season 5

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SLIDE 19

360˚radio engagement

18 | 4QFY19 results

CONTENT

11

brands

76%

Share of Radio Adex

Radio

15.6 16.5 16.2 FY17 FY18 FY19

Terrestrial

Weekly Radio Audience (mn)

17.9mn

Social Media Followers

1bn

Video views

8.2 9.7 14.8 FY17 FY18 FY19

Online

Average Monthly Digital Streaming Session (mn)

Growing radio footprint as digital gains traction

ERA Malaysia’s top Malay language radio brands brings in 6.2mn weekly audience RAAGA maintains its incumbent pole position in Tamil-language segment with 1.2mn weekly listeners

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SLIDE 20

Leading local GBO with 60% share in FY19

19 | 4QFY19 results

Hantu Kak Limah

RM38mn

Paskal

RM30mn

Polis Evo 2

RM23mn

Think Big Big RM5mn Dukun RM10mn Konsert Hora Horey RM3mn Hantu Kak Limah RM38mn Paskal RM30mn

Astro has the highest local movie market share with over RM100mn cumulative GBO

Polis Evo 2 RM23mn

CONTENT

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SLIDE 21

Released in Singapore, Brunei and Indonesia…

Newly released movie set to thrill our viewers

CONTENT

20 | 4QFY19 results

The first Malaysian horror film with two

endings screened

simultaneously

in different cinemas Total box office revenue of

RM11mn

and counting

since debut on 21 Feb 2019 …strengthening

  • ur regional

content proposition

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Distribution of Astro’s content IPs via OTT

21 | 4QFY19 results

CONTENT

Horror series produced in partnership with Telkomsel’s video streaming app, MAXstream Elevating our relationship with Telkomsel through production and distribution of content IPs

Our highest-grossing movies are licensed globally

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SLIDE 23

32mn

Digital views

1.9mn

TV viewership

Kids’ content with growing export potential

22 | 4QFY19 results

CONTENT

1.4bn

YouTube views

1.8mn

YouTube subscribers

12

Content licensing deals

686mn

YouTube views

1.5mn

YouTube subscribers Distributed across

15

countries globally

11

Content Licensing Deals

6

Content licensing deals

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SLIDE 24
  • Production and marketing consultation
  • > 500 teams

MPL Malaysia & Singapore (Season 3)

Captivating digital natives through eSports

DIGITAL

23 | 4QFY19 results

MPL Myanmar (Season 2)

  • Production & marketing consultation
  • On-ground playoff event planning
  • 768 teams

Over

6.8mn

TV reach for FY19

18

Platforms across TV & OTT

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SLIDE 25

24 | 4QFY19 results

digital views across all platforms

3.5mn 3.2mn

Short-form digital IPs gaining popularity

digital views digital views

estimated reach on Facebook digital IP

  • n Gempak

website

10mn 7mn Most viewed

DIGITAL

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Appendix

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(RM mn) FY18 FY19 EBITDA 1,820 1,605 Margin % 33% 29% Depreciation and amortisation (680) (673) EBIT 1,140 932 Margin % 21% 17% Finance income 172 38 Finance cost (237) (317) Share of post tax results from investments (2) 1 Impairment of investment

  • (2)

PBT 1,073 651 Tax expense (309) (190) Tax rate % 29% 29% PAT 764 461 PATAMI 771 463 Margin % 14% 8% Normalised PATAMI 678 563 Margin % 12% 10%

NB (1) Depreciation and amortisation excludes the amortisation

  • f

film library and programme rights which is expensed as part of content costs (cost of sales) (2) Normalised PATAMI excludes (i) post-tax impact

  • f

unrealised forex gain/(loss) FY19: (RM 41mn), FY18: RM 93mn due to mark-to-market revaluation

  • f

transponder-related finance lease liabilities (ii) one-off separation scheme cost of RM58mn (3) Numbers may not add up due to rounding differences

(2) (1)

PAT reconciliation

26 | 4QFY19 results

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(RM mn) FY18 FY19 Non-current assets 4,807 4,718 Property, plant and equipment 2,401 2,233 Other non-current assets 2,406 2,485 Current assets 2,041 1,542 Receivables and prepayments 1,012 818 Cash and bank balances(1) 962 632 Other current assets 67 92 6,848 6,260 (RM mn) FY18 FY19 Non-current liabilities 3,791 3,601 Payables 390 412 Borrowings 3,319 3,096 Other non-current liabilities 82 93 Current liabilities 2,404 1,980 Payables 1,653 1,467 Borrowings 646 475 Other current liabilities 105 38 Shareholders’ equity 653 679 6,848 6,260

Net debt / LTM EBITDA: 1.8x (FY18: 1.7x)

NB (1) Includes money market unit trusts (2) Numbers may not add up due to rounding differences

Balance sheet overview

27 | 4QFY19 results

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1,570 615 308 573 509 4QFY19

Finance lease SFCL Unrated MTN RM TL USD TL

(RM mn)

Total borrowings

Total borrowings of RM3,571mn is net of debt issuance costs (RM4.4mn)

Debt profile

RM term loan Finance lease (primarily satellite transponders)

▪ As at 31 January 2019, outstanding principal stood at USD123.75mn ▪ First drawdown date was on 8 June 2011, amortised repayment schedule with final maturity date on 8 June

  • 2021. Average life: 7 years

▪ Fully hedged via cross currency interest rate swap at an exchange rate of USD/RM3.0189 and an all-in interest rate of 4.19% p.a. ▪ The twelfth principal repayment of USD24.75mn (RM74.72mn) is scheduled to be paid on 10 June 2019 ▪ As at 31 January 2019, total outstanding principal stood at RM567.5mn following a full voluntary prepayment of a balance RM230mn made on interest payment date of 19 November 2018 ▪ A total of RM187.5mn out of the RM567.5mn has amortised repayment schedule with final maturity date on 19 May 2021(Average life: 7 years), at a floating rate (based on cost of funds) of 5.10% p.a. The next recalculated twelfth principal repayment of RM37.5mn is scheduled to be paid on 21 May 2019 ▪ Finance lease related to lease of Ku-band transponders on MEASAT-3, MEASAT-3A and MEASAT-3B. Payment arrangement for the remaining contractual years for M3 and M3A have been redenominated into Ringgit at USD/RM3.0445 w.e.f. 21 May 2013. The unhedged portion of the finance lease related to M3B is USD179mn ▪ Effective interest rate: 6.2%, 4.6%, 12.5% and 5.6% p.a. for M3, M3-T11, M3A and M3B respectively, average life: 15 years

Unrated MTN

▪ The first series of notes under the unrated medium-term notes (MTN) programme of up to RM3.0bn in nominal value of up to 15-year tenor was issued on 10 August 2017. The issuance was for RM300mn with a 5-year tenor at fixed rate of 5.30% p.a. with semi-annual coupon payment ▪ Bullet repayment on 10 August 2022

28 | 4QFY19 results Synthetic Foreign Currency Loan (SFCL)

▪ The USD150mn SFCL facility of 4 years 11 months tenor amounted to RM612.7mn upon conversion at the agreed exchange rate of USD/RM4.0850 ▪ Drawn down in 2 tranches of RM306.4mn each on 29 December 2017 and 28 February 2018 respectively, at a fixed rate of 4.80% p.a. with quarterly interest payment ▪ Bullet repayment on 29 November 2022

USD term loan

▪ The balance RM380mn is a term Loan facility with a 5-year tenor secured and fully drawn down on 23 August 2018, at a fixed rate of 5.18% p.a. with quarterly interest payment ▪ Repayment will be in 2 tranches i.e. RM50mn on 23 February 2023 and RM330mn on 23 August 2023

NB (1) Numbers may not add up due to rounding differences

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Thank you

astro.com.my