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MUMBAI:
Asian satellite operator Asiasat has announced interim results
for the six months ended 30 June 2007.
Turnover
for the first half of 2007 was HK$461 million, compared to
HK$475 million for the same period. Excluding last year’s
one-time receipt, recurring revenue was up by HK$23 million.
The profit attributable to equity holders was HK$247 million
(2006: HK$239 million), up three per cent.
Operating
expenses in the first half of 2007 amounted to HK$90 million
(2006: HK$99 million), a decrease of HK$9 million due mainly
from a reduction in satellite in-orbit insurance and a reversal
of certain performance bonus provisions in relation to 2006.
Overall
utilisation rate remained stable at 56 per cent. The construction
of Asiasat 5 is on schedule. However, the launch was rescheduled
to 2009 due to delay in launch vehicle availability. The firm
adds that positive developments in the regional TV broadcasting
industry will fuel demand for satellite capacity.
Asiasat
chairman Mi Zeng Xin said, "The uplift in AsiaSat’s
half-year performance was encouraging after a few years of
sluggish trading in the Asian satellite sector amid a general
economic strengthening across the region.
"This
endorsed our commitment to customer services and relationships
through that difficult period in anticipation of the market
turnaround. Indeed, we have maintained our market leadership;
remain debt-free and are committed to the future of satellite
communication in the Asia-Pacific region.
"However,
the recent launch of two new satellites in China poses a very
real threat to Asiasat’s business. As a result, the management
of the company will be adopting a cautious approach to the
remainder of the year.
"The
group’s underlying businesses achieved solid operational
and financial results in the first six months of 2007. This
was also a period of significant corporate activity for the
group that included a change in a major shareholder, the launch
of a previously announced privatisation proposal, and the
subsequent mandatory general offers (MGO).
"However,
with the refusal of the US Department of State to grant an
approval for the privatisation proposal, the MGO had to proceed
which resulted in a minor change to the public shareholding
of the company. I am delighted to record that Asiasat also
won a number of accolades during the period including two
of the industry’s highest awards for excellence.
"Looking
at the underlying businesses, the improved financial performance
may indicate the start of the long-awaited turnaround in the
Asian satellite industry following a period of stronger growth
in the region’s economies. We have been signalling the
possibility of such an improvement for some time and it is
encouraging that it may now be making a positive impact to
the bottom line.
"However,
there are also uncertainties ahead. We have received recent
reports on the successful launches of two satellites in China,
namely Sinosat 3 and Chinasat 6B, which are now undergoing
testing. When they become commercially operational in the
next few months, Chinese television broadcasters currently
transmitting via Asiasat’s satellites may switch to these
new satellites.
"If
that occurs, it will have an adverse impact on the company’s
revenue as contracts with Chinese television broadcasters
accounted for approximately 8.8 per cent of Asiasat’s
total revenue in 2006."
In
the first six months of the year, the firm secured new contracts
to the value of HK$117 million compared to HK$186 million
last year. It renewed contracts to the value of HK$153 million
compared to HK$296 million last year amounting to a total
of HK$270 million.
Reduction
in overall value is mainly attributable to shorter duration
of contracts. The adoption of High Definition (HD) television
technology in Asia, and the increase in satellite capacity
that it requires, continues to lag behind Europe and the US.
However,
Asiasat says that it is experiencing stronger demand from
the television sector for the regional distribution of new
television channels. This increase would appear to be driven
by the introduction, in many countries, of new distribution
methods including Direct-To-Home (DTH) satellite television
and internet protocol television (IPTV) delivered by the terrestrial
broadband network.
These
new and often competing delivery platforms require innovative
and exclusive content to differentiate themselves from their
competitors and are thus driving the expansion of the content
industry. As Asian markets develop, governments are recognising
that the television viewing public expects to have choice
both in the content available and in who provides it.
Businesses,
Asiasat states, have also recognised that television broadcasting
has moved from a government-run loss-making activity to an
attractive investment opportunity. It is envisaged that every
country will eventually have multiple television platforms,
all competing for viewers reaching via satellite, cable, the
telephone network and wireless solutions.
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