Asiasat announces 32% profit increase for the year to 31 december 2010

24 March 2011 21 h 20 min 8 comments

HONG KONG, 24 March 2011 – Asia Satellite Telecommunications Holdings Limited (“AsiaSat” – SEHK: 1135), Asia‟s leading satellite operator, today announces its 2010 annual results for the year ended 31 December 2010.

AsiaSat‟s 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‟s television, internet and mobile telecommunications markets.” 

Financial Summary:

Turnover HK$1,456,222,000 +25%

Profit attributable to shareholders HK$694,590,000 +32%

• Earnings per share HK$1.78 +32%

• Proposed final dividend per share HK$0.45 +41%

• Debt free

Operational Highlights:

• Record results generated largely by core businesses

• Overall utilisation rate up 8% to 73%

• Turnover of the wholly-owned subsidiary SpeedCast up 21% and profit up 64%

Direct-to-Home joint venture DISH-HD Asia Satellite launched in Taiwan

AsiaSat 7 on schedule for fourth quarter launch

 
“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.” 

Record results and encouraging outlook

Peter Jackson: “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‟s 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. 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 „blue 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”.

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).

Consolidated Statement of Comprehensive Income 
Year ended 31 December 
                                                                                                           2010                    2009
                                                                                                      HK$’000             HK$’000
Sales                                                                                           1,456,222           1,162,918
Cost of services                                                                      (499,581)          (403,907)
Gross profit                                                                               956,641               759,011
Administrative expenses                                                   (156,085)         (184,652)
Other gains – net                                                                        26,622               20,575
Operating profit                                                                     3  827,178          594,934
Finance costs                                                                            (10,219)                (109)
Share of losses of a jointly controlled entity               (41,580)             (12,242)
Profit before income tax                                                      775,379             582,583
Income tax expense                                                              (80,910)             (59,202)
Profit and total income for the year                                694,469              523,381
Profit and total income attributable to:
     Owners of the Company                                                   694,590              525,215
Non-controlling interests                                                       (121)                  (1,834)
                                                                                                         694,469              523,381
Earnings per share attributable

to the owners of the Company during the year

(expressed in HK$ per share)

- Basic earnings per share                                                          1.78                     1.35
- Diluted earnings per share                                                      1.78                     1.34

Dividends                                                                                      207,333             156,478

BUSINESS REVIEW

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‟s 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‟s 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‟s share was HK$42 million (2009: HK$12 million). 

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‟s 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‟s 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.

Full press-release

SOURCE: Asiasat (24/03/2011) 

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