AsiaSat announces 2010 annual results

 

 

24 March 2011

 

Asia Satellite Telecommunications Holdings Limited announces its 2010 annual results for the year ended 31 December 2010.

 

RECORD RESULTS AND AN ENCOURAGING OUTLOOK

 

FinaAsiaSat‟ Executive Chairman, Peter Jackson, said, "For our business, the two key drivers of long-term growth remain the technological advantages that satellites offer over terrestrial systems as a platform for the broadcast industry, and a healthy level of competition across multiple platforms within Asia‟ television, internet and mobile telecommunications markets."

 

"For AsiaSat, the Company is well managed and continues to deliver high quality satellite capacity supported by an unmatched level of customer service. We remain optimistic and are encouraged by the future prospects for growth."

 

Chairman’s Statement

 

In my first Annual Report as Executive Chairman, I am delighted to record that, in 2010, AsiaSat achieved another set of record results.

 

This was particularly pleasing as our cautiously optimistic view at the time of the Interim Report proved correct, and the positive trend continued throughout the remainder of the year. The strength of the last six months enhanced the strong figures of the first half to set the 2010 year-end record.

 

While economic uncertainty continues to blight many parts of the world, it would appear that AsiaSat‟ markets in the Asia-Pacific region generally have stabilised and are now making good progress. Consumer appetite both for additional and superior content is generating demand on one hand, while prompting changes in government legislation on the other. As a result, we are seeing growth in new services with the implementation of new applications across the region.

 

AsiaSat is at the forefront of this development and, during the year, we launched our new Direct-to-Home (DTH) project in Taiwan and continued to see the introduction of High Definition Television (HDTV) in multiple markets. We renewed most of our existing major customer contracts that were due to expire and attracted a number of excellent new customers. In June and July, we played our part in facilitating the broadcast of 2010 FIFA World Cup, the most watched television event in history.

 

There were also corporate developments at our head office. On 1 August 2010, I retired as AsiaSat‟ Chief Executive Officer and was appointed Executive Chairman, and the Company‟ Deputy Chief Executive Officer, Mr. William WADE, succeeded me as Chief Executive Officer.

 

In November, I was honoured to receive the CASBAA Lifetime Contribution Award 2010. While this tribute was in my name, it did reflect the work of the whole AsiaSat team and they deserve equal recognition.

 

Looking ahead, we believe that the continued growth of telecommunications and television programming in the Asia-Pacific region will underpin the success of well-performing providers in the regional satellite industry for the foreseeable future. Our own core business is strong, our customer base is „lue chip‟ and our Company is recognised as Asia's premier satellite operator. Combining these assets with our outstanding management team and staff, and with a debt-free balance sheet, we are in an excellent position to flourish and to seize opportunities that will add value. 3

 

FINANCIAL RESULTS

 

Turnover

 

Turnover in 2010 was HK$1,456 million (2009: HK$1,163 million), an increase of HK$293 million, 25% up from the previous year. Some HK$257 million of this rise came from growth in our core business driven by additional new channels, the expansion of DTH and HDTV, a lease agreement for the exclusive use of AsiaSat 2, and transponders leased to Power Star Limited, a subsidiary of DISH-HD Asia Satellite Limited ("DISH-HD Asia Satellite"), our joint venture in Taiwan. Our wholly-owned subsidiary, SpeedCast Holdings Limited ("SpeedCast"), also added to the uplift with a growth in its contribution of some HK$36 million as a result of strong demand from its expanding roster of excellent customers.

 

Profit

 

The profit attributable to shareholders for 2010 was HK$695 million (2009: HK$525 million), up 32%. The increase came largely from the substantial growth in revenue reported above, combined with the impact of tight controls on costs.

 

Operating Expenses

 

Operating expenses in 2010, excluding depreciation and amortisation, were slightly down at HK$313 million (2009: HK$324 million). In the prior year, we incurred substantial legal and professional fees in association with new business activities while, in 2010, the equivalent amount was markedly less. As already noted, even though the overall level of business increased significantly during the year, I am pleased to report that we were able to maintain our expenses at a similar level to the prior year.

Depreciation

 

Depreciation in 2010 was HK$343 million (2009: HK$265 million). The increase arose largely from a full 12 months‟depreciation of AsiaSat 5 in 2010 compared to three months‟depreciation in 2009 as the satellite commenced operation in October of that year.

 

Cash Flows

 

During 2010, the Group had a net cash inflow of HK$802 million (2009: outflow of HK$962 million) after capital expenditures of HK$602 million (2009: HK$1,364 million) and dividends of HK$156 million (2009: HK$152 million). As at 31 December 2010, the Group reported a cash and cash equivalents balance of HK$2,286 million (2009: HK$1,484 million).

 

The Group continues to be debt free.

 

Dividend

 

At the forthcoming Annual General Meeting ("AGM") to be held on 24 May 2011, directors of the Company (the "Directors") will recommend a final dividend of HK$0.45 per share (2009: HK$0.32 per share). This, together with the interim dividend of HK$0.08 per share (2009: HK$0.08 per share), gives a total dividend of HK$0.53 per share in 2010 (2009: HK$0.40 per share). The register of members of the Company will be closed from Tuesday, 17 May 2011 to Tuesday, 24 May 2011 (both days inclusive), during which period no transfer of shares in the Company will be allowed. 4

 

BUSINESS REVIEW

 

Fuller details of the Company‟ businesses are set out in the Operations Review in 2010 annual report, and more detailed reports of the year‟ activities and public statements can be found on our website at www.asiasat.com.

New satellite

 

AsiaSat 7

 

Our new satellite, formerly named AsiaSat 5C, is under construction in the U.S. and is progressing well. We are anticipating a launch in the fourth quarter of this year. The satellite is being built by Space Systems/Loral on the SS/L 1300 series satellite platform and will have a performance similar to that of AsiaSat 5.

 

In-orbit satellites

 

During 2010, our in-orbit satellites performed well and delivered excellent service to our customers. We currently operate four satellites. Three are located in geostationary orbital positions over Asia to provide our customers with unmatched coverage over two-thirds of the world's population, and the fourth is positioned over Africa. Details of each are set out in the Operations Review in 2010 annual report.

 

The total number of transponders leased and sold on the Company‟ satellites, (excluding the former AsiaSat 2, now called AMOS-5i and leased to a single customer for exclusive use), as at 31 December 2010 was 97 (31 December 2009: 85). The overall utilisation rate was 73% (2009: 65%). This figure includes the six Broadcast Satellite Service (BSS) transponders dedicated to our DTH service and three transponders allocated for occasional use and Satellite News Gathering (SNG) services.

 

SUBSIDIARY COMPANIES AND JOINT VENTURE

 

SpeedCast

SpeedCast, our wholly-owned subsidiary, provides two-way satellite services including broadband access services to customers across Asia and beyond.

SpeedCast‟ turnover for the year ended 31 December 2010 was HK$206 million (2009: HK$170 million), an improvement of over 21%. The company recorded a net profit of HK$23 million for the year (2009: HK$14 million). This was mainly attributable to the growth in revenue from the two-way broadband access and maritime solutions businesses.

 

DISH-HD Asia Satellite

 

AsiaSat holds 50% of this joint venture, formed with EchoStar Corporation in 2009. DISH-HD Asia Satellite delivers DTH satellite television services in Taiwan and other targeted regional markets. It launched its operations in June 2010 and is now providing its customers with a choice of some 40 High Definition (HD) or enhanced Standard Definition (SD) channels. As DISH-HD Asia Satellite is still in the early stage of operation, it incurred a loss of HK$83 million (2009: HK$24 million) in 2010, of which AsiaSat‟ share was HK$42 million (2009: HK$12 million). 5

 

OUTLOOK

 

In 2010, AsiaSat achieved solid increases in all areas of our business and this momentum has been carried into 2011. The early part of this year has started well and we are experiencing demand for more capacity from existing and new customers, and this bodes well for the future.

 

However, as in the last two years, we remain aware of the economic uncertainty that is still faced by the global economy. As I have mentioned above, it is fortunate that our region and the satellite industry in general have maintained their healthy growth, and that AsiaSat, as market leader, has been able to maximise the opportunities that have arisen.

 

Looking to the future, the fundamentals of our industry remain sound and we believe that the Asian satellite market will continue to grow. In addition, there may well be expansion opportunities for AsiaSat, as the satellite industry in Asia continues to evolve. As the region‟ premier operator, being financially robust and debt free, we are very well placed to seize any opportunities that may arise.

 

The two key drivers of long-term growth for our business remain the technological advantages that satellites offer over terrestrial systems as a platform for the broadcast industry, and a healthy level of competition across multiple platforms within Asia‟ television, internet and mobile telecommunications markets. HDTV technology, IPTV, video-to-mobile and DTH services, as well as mobile and internet connectivity in rural and remote areas, drive the industry forward.

 

For AsiaSat, the Company is well managed and continues to deliver high quality satellite capacity supported by an unmatched level of customer service. We remain optimistic and are encouraged by the future prospects for growth.