KUALA LUMPUR (Sept 30): Astro Malaysia Holdings Bhd (KL:ASTRO) sank into the red in the May-July quarter — its first quarterly loss since late 2023 — dragged by unrealised foreign exchange losses while its top line declined on lower subscription revenue.

The group recorded a net loss of RM25.80 million for the second quarter ended July 31, 2026 (2QFY2027), from a net profit of RM16.39 million a year earlier, while revenue dropped 7.24% to RM633.75 million from RM683.21 million, a bourse filing showed on Wednesday.

The group blamed the quarterly loss to higher net financing costs that were impacted by unrealised foreign exchange losses of RM58.4 million on lease liabilities that were not hedged, due to a weaker ringgit against the US dollar, as well as higher cost of set-top boxes and staff related costs.

The group said its foreign currency exposure is primarily in terms of sales, purchases and borrowings denominated in the US dollar. It uses FX contracts, FX options and cross-currency interest rate swaps to hedge against other liabilities.

For the six months ended July 31, 2026 (1HFY2027), Astro recorded a net loss of RM24.24 million against a net profit of RM29.87 million in 1HFY2026, as revenue declined 6.7% to RM1.29 billion from RM1.39 billion.

No dividend was declared with the latest results announcement.

"While the group continues to reduce its cost base, the softer market conditions continued to weigh on profitability with the group recording a LATAMI of RM26 million primarily due to unrealised forex losses on unhedged transponder lease liabilities stemming from a weaker ringgit. Importantly, Astro remained cash-generative, delivering free cash flow of RM113 million," the group said in a statement.

Interim group chief executive officer Henry Tan said the group is "moving decisively" to shape its next chapter by growing audiences, deepening engagement and unlocking new revenue opportunities across streaming, advertising and adjacent businesses.

As at July 31, Astro's total assets stood at RM4.78 billion — down 3.9% from RM4.97 billion at end-January — while total liabilities fell 5.5% to RM3.45 billion on lower borrowings, payables and derivative financial instruments.

Content piracy is still one of the biggest threats, the group said, adding it is strengthening efforts to fight this through court rulings and penalties against illegal streaming.

Astro shares slipped half a sen or 8.3% to close at 5.5 sen ahead of the results announcement. At the Wednesday closing price, the group was valued at RM288.3 million. The counter has fallen 45% year-to-date.