KUALA LUMPUR (Aug 1): Digistar Corp Bhd (KL:DIGISTA) hopes that the pay-television business would partly help the company mainly involved in construction to turn around in the financial year ending Sept 30, 2025 (FY2025).

Panorama TV is expected to contribute at least 40% to the group's revenue in the next two to three years, Digistar chief executive officer Datuk Lee Wah Chong told reporters at the launch of Panorama TV on Thursday.

“We have a lot of customers with contracts [of] one to three years," and contributions from the pay-TV segment would be reflected in next year’s earnings, Lee said.

Panorama TV Asia Broadcast Sdn Bhd is a 60%-owned subsidiary of Digistar. Muhammad Hamka Mohd Ali, who is a director of Panorama TV, owns a 20% stake, while Azman Yusoff and Ong Fee Chong own 10% shareholdings each.

The company took almost two years to launch Panorama TV — which provides internet TV through an over-the-top platform — including obtaining approvals from authorities and regulators.

Digistar launched Panorama TV on Thursday.

Currently, Digistar's major earnings contributors are its construction and concession segment, as well as the hospitality segment. The company currently owns and operates the Imperial Heritage Hotel and Orchard Wellness resort in Melaka.

The group also plans to expand its Panorama TV decoder to the Asian region and Middle East countries, although no timeline is given for the expansion at this juncture.

Panorama TV earlier signed a memorandum of understanding with the Malaysia Budget and Business Hotel Association to provide Panorama TV decoders to local hotels.

In January 2023, Digistar signed a 15-year cooperation agreement with Indonesian diversified group PT MNC Asia Holding Tbk. The partnership is for MNC to supply its Android set-top boxes to Panorama TV customers.

Digistar has been loss-making for seven years since FY2017.

For FY2023, net loss narrowed to RM2.42 million from RM5.24 million for the same period a year earlier, while revenue dropped 4.55% to RM47.61 million versus RM49.88 million.

Digistar lists system integration segment, rental-and-hotel, concession, and investment holding as its major business segments. Only the system integration segment — which provides IT infrastructure, teleconferencing and other electronic systems — incurred a loss amounting to RM2.97 million in FY2023, according to its latest annual report.

For the first half ended March 31, 2024 (1HFY2024), net loss widened to RM1.60 million from RM224,000 in 1HFY2023, as revenue fell 13.4% to RM22.07 million from RM25.50 million.

Digistar shares closed unchanged at 6 sen apiece on Thursday, giving the group a market capitalisation of RM28.6 million.