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TELECOMMUNICATIONS

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TELECOMMUNICATIONS ...

ASIA SATELLITE TELECOMMUNICATIONS HOLDINGS LIMITED

    亞洲衛星控股有限公司

    (Incorporated in Bermuda with limited liability)

    Announcement of Unaudited Results

    for the six months ended 30th June, 2002 The Board of Directors is pleased to announce the unaudited interim results of the Group for the

    six months ended 30th June, 2002 as follows: CONSOLIDATED INCOME STATEMENT

    FOR THE SIX MONTHS ENDED 30TH JUNE, 2002

     Six months ended 30th June

     Notes 2002 2001

     HK$000 HK$000

     (unaudited) (restated &

    unaudited)

    Turnover 478,783 480,525

    Cost of services (121,313) (119,074)

     357,470 361,451

    Other revenue -- 5,461

    Administrative expenses (41,495) (33,655)

    Profit from operations 315,975 333,257

    Bank interest income 2,151 3,773

    Share of results of associates (4,071) (22,670)

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    ASIA SATELLITE TELECOMMUNICATIONS Results Announcement nd(22 August, 2002)

    Profit before taxation 314,055 314,360 Taxation 2 34,233 36,299 Profit after taxation 279,882 278,061 Minority interest 1 11 Profit attributable to shareholders 279,821 278,050 Dividend Proposed interim dividend of HK$0.06

     (2001: HK$0.06) per share 23,416 23,416 Earnings per share 3 Basic HK$0.72 HK$0.71 Diluted HK$0.72 HK$0.71 CONSOLIDATED BALANCE SHEET AT 30TH JUNE, 2002

     30.6.2002 31.12.2001

     HK$000 HK$000

     (unaudited) (audited)

     Non-current assets

    Property, plant and equipment 2,969,638 2,942,324 Unbilled lease rental receivable 146,025 130,225

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    ASIA SATELLITE TELECOMMUNICATIONS Results Announcement nd(22 August, 2002)

    Investments in associates 24,303 --

     3,139,966 3,072,549

     Current assets

    Trade and other receivables 183,669 175,745 Bank balances and cash 365,121 136,428

     548,790 312,173

     Current liabilities

    Payables 47,416 23,372 Deferred revenue 152,675 160,050 Taxation payable 65,547 41,782 Dividend payable 121 121

     265,759 225,325

     283,031 86,848 Net current assets

     3,422,997 3,159,397

     Capital and reserves

    Share capital 39,027 39,027 Reserves 3,056,237 2,831,053

     3,095,264 2,870,080

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    ASIA SATELLITE TELECOMMUNICATIONS Results Announcement nd(22 August, 2002)

     491 492 Minority interest

     Non-current liabilities

    Deferred taxation 175,716 175,724

    Deferred revenue 151,526 113,101

     327,242 288,825

     3,422,997 3,159,397

    Notes:

    1. INDEPENDENT REVIEW

    The interim results for the six months ended 30th June, 2002 are unaudited but have been reviewed

    in accordance with Statement of Auditing Standard 700 Engagements to review interim financial reports issued by the Hong Kong Society of Accountants, by Deloitte Touche Tohmatsu, whose

    unmodified review report is included in the interim report to be sent to shareholders.

    2. TAXATION

     Six months ended 30th June

     2002 2001

     HK$000 HK$000

    The charge comprises:

    Hong Kong Profits Tax 25,141 32,539

    Deferred taxation credit (8) (6,192)

     25,133 26,347

    Overseas tax 9,100 9,952

     34,233 36,299

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    ASIA SATELLITE TELECOMMUNICATIONS Results Announcement nd(22 August, 2002)

    A significant portion of the Groups profit is treated as earned outside of Hong Kong and is not subject to Hong Kong Profits Tax. Hong Kong Profits Tax is calculated at 16% (2001: 16%) of the estimated assessable profit for the period.

    Overseas tax is calculated at 10% of the gross revenue earned in certain of the overseas jurisdictions.

    3. EARNINGS PER SHARE

    The calculation of earnings per share is based on the profit attributable to shareholders of HK$279,821,000 (2001: HK$278,050,000) and as the weighted average of 390,266,000 (2001: 390,266,000) ordinary shares in issue during the period.

    The computation of diluted earnings per share presented for the six months ended 30th June, 2002 and 2001 does not assume the exercise of the outstanding options because the exercise price of the Companys options was higher than the average market price for the shares.

    4. PURCHASE, SALE OR REDEMPTION OF OWN

    SECURITIES

    During the six months ended 30th June, 2002, neither the Company nor any of its subsidiaries purchased, sold or redeemed any of the Companys securities.

    5. PRACTICE NOTE 19 OF THE LISTING RULES

    Pursuant to paragraph 3.7.1 of the Practice Note 19 of the Rules Governing the Listing of Securities (the Exchange Listing Rules) of The Stock Exchange of Hong Kong Limited (the

    Exchange), the Company discloses that the covenants relating to the loan facility of HK$1,950 million (US$250 million) for a term of five years require (a) China International Trust and Investment Corporation and SES GLOBAL S.A. between them to maintain beneficial ownership of more than 75% of the ordinary issued share capital of Bowenvale Limited, which is a substantial shareholder of the Company; and (b) Bowenvale Limited to maintain beneficial ownership of at least 51% of the issued share capital of the Company.

    6. CODE OF BEST PRACTICE

    None of the directors of the Company is aware of any information that would reasonably indicate that the Company is not, or was not for any part of the six months ended 30th June, 2002, in compliance with the Code of Best Practice as set out in Appendix 14 of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited.

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    ASIA SATELLITE TELECOMMUNICATIONS Results Announcement nd(22 August, 2002)

7. PUBLICATION OF DETAILED RESULTS,

    ANNOUNCEMENT ON THE EXCHANGES WEBSITE

    A detailed results announcement containing all the information required by paragraphs 46(1) to 46(6) of Appendix 16 of the Exchange Listing Rules will be published on the Exchanges website

    in due course.

    CHAIRMANS STATEMENT

    I am pleased to announce the Groups unaudited interim results for the six months ended 30th June,

    2002, and to report that, despite the difficult conditions that prevailed and a provision for doubtful debts, the Group achieved a marginal increase in net profit.

    Our expectation that 2002 would be a year of challenge for the satellite industry, and that growth would be difficult, is proving to be correct. Market confidence remains soft, and an economic recovery has not yet materialized, either regionally or globally. In addition, the recent demise of some of the worlds largest telecommunications and Internet companies has fuelled an impression that the industry, as a whole, is in a downward spiral. This is not the case, and the perception is damaging and unduly negative.

    The rate of growth has certainly decreased, and many telecommunications companies overestimated the potential for growth and overbuilt their capacity. In particular, in the international cable communications market, supply currently far outstrips demand, and prices for capacity continue to fall.

    In these circumstances, the Groups strategy to concentrate on the provision of broadcast satellite services, and not to compete in the point-to-point telecommunications market, remains sound. The Group is, thus, relatively well placed to benefit from a market recovery.

    INTERIM RESULTS

    Turnover for the first half of 2002 amounted to HK$479 million, just below the result for the same period last year (2001: HK$481 million restated). The profit attributable to shareholders, however, was marginally higher than last year at HK$280 million (2001: HK$278 million restated). This was a solid result since it was achieved after a provision for doubtful debts of HK$8 million (2001: Nil). The provision, as a percentage of turnover, was less than 2%, which management considers to be tolerable in the current tough market conditions. Cost of services and administrative expenses, excluding the provision for doubtful debts, increased slightly by about 1% to HK$155 million (2001: HK$153 million restated). The Groups EBITDA (earnings before interest, tax,

    depreciation and amortisation) margin remained high at 84% (2001: 86%). The small decline from the prior year was caused solely by the doubtful debt provision.

    During the period, the Group achieved a net cash inflow of HK$229 million, and at 30th June, 2002, reported a cash balance of HK$365 million and no debt. The Group has a term loan facility of US$250 million available at its disposal.

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    ASIA SATELLITE TELECOMMUNICATIONS Results Announcement nd(22 August, 2002)

DIVIDEND

    In view of the solid result in the midst of an economic slowdown, the Board has declared an interim dividend for 2002 of HK$0.06 per share (2001: HK$0.06), maintained at the same level as last year. This dividend is payable on 19th November, 2002 to shareholders on the share register as of 17th October, 2002. The share register will be closed from 10th to 17th October, 2002, both days inclusive.

    OPERATIONS REVIEW

    In-orbit Satellites

    During the period, the Groups satellites and systems continued to operate well and experienced no anomalies or disruptions.

    Transponder Utilisation

    At 30th June, 2002, the overall utilisation rate of AsiaSat 2 was 57% (31st December, 2001: 62%), and that of AsiaSat 3S was 68% (31st December, 2001: 67%). The combined utilisation rate of the two satellites was 63% (31st December, 2001: 65%).

    Market Review

    Demand for transponder capacity for the broadcasting and telecommunications sectors in the Asian region remained soft. Several regional television operators are experiencing financial difficulties and others continue to be cautious in expanding their businesses. New entrants are either reluctant to invest, in view of the uncertain market conditions, or are unable to attract funding.

    The supply of regional transponder capacity continues to exceed demand, especially for Ku-band in certain countries.

    In the first half of 2002, however, the Group secured new contracts and renewed existing ones. There are still a number of contracts due for renewal in the remainder of the year. Regarding pricing, despite strong competition and soft demand, the Group has been able to maintain its price levels on C-band transponders, but has adopted a more flexible, short-term, pricing strategy for the over-supplied Ku-band market.

    As at 30th June, 2002, the Group had contracts on hand worth HK$4.1 billion (31st December, 2001: HK$4.6 billion), and a major portion of this amount will be recognised over the next few years.

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    ASIA SATELLITE TELECOMMUNICATIONS Results Announcement nd(22 August, 2002)

BUSINESS DEVELOPMENT

    Associate Company

    During the period, the Group increased its interest in SpeedCast Holdings Limited (SpeedCast)

    from 36.5% to 45.3% for US$4 million, of which US$2.5 million was in cash, and US$1.5 million in transponder capacity.

    SpeedCast provides three major services: high-speed Internet connectivity, multimedia content delivery and corporate broadcast services such as data package delivery, and Internet streaming. The business of SpeedCast is developing as planned, and the company continues to achieve significant milestones. In September this year, SpeedCast will be expanding its product line further through the launch of two-way connectivity services.

    As of 30th June, 2002, SpeedCast was working with over 50 leading ISPs (Internet Services Providers) in 19 countries to acquire broadband Internet subscribers. Currently the company has over 600 enterprise customers subscribing to high-speed connectivity services. Additionally, in June 2002, SpeedCast enabled Microsoft Network (MSN) to effect the first pay-per-view live streaming event in Asia, providing the CDN (content distribution network) infrastructure for both the live MSN webcast and the on-demand content associated with this music event. For the first six months of 2002, SpeedCast achieved a significantly reduced operating loss of HK$26 million (2001: HK$62 million), with approximately 46% of the loss being due to the amortisation of its transponder capacity and subscriber management/billing systems. In the current market conditions, SpeedCast fared well when compared with its peers.

    The Groups share of the loss also reduced, to HK$12 million (2001: HK$23 million). However, under the Statement of Standard Accounting Practice 10 Accounting for Investments in Associates , the Group cannot recognise a loss more than its investment, excluding goodwill, which, in SpeedCast, was HK$4 million. After accounting for the rental income on the transponder capacity and the multimedia platform leased to SpeedCast as the Groups contribution to its share

    capital, the net effect to the Group was neutral.

    Our participation in SpeedCast is a strategic, long-term investment and, as originally contemplated, the Group does not expect a return from the joint venture in the near-term. However, longer-term, the prospects for SpeedCast remain promising.

    Satellites Under Construction

    AsiaSat 4

    AsiaSat 4, which is currently being built, has successfully completed its acoustic and vibration testing, and the first stage of the Spacecraft Thermal Vacuum testing (SCTV) will be completed by the end of August. According to the current production schedule and barring unforeseen events,

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    ASIA SATELLITE TELECOMMUNICATIONS Results Announcement nd(22 August, 2002)

the satellite is expected to be ready for shipment, from Boeings manufacturing plant at Los

    Angeles, to Cape Canaveral in late October 2002.

    AsiaSat 4 will have 28 C-band and 16 Ku-band transponders to provide regional coverage, in addition to four Hong Kong BSS (Broadcast Satellite Service) transponders covering Hong Kong and part of southern China. Depending on the confirmation of a launch date, the satellite is expected to be positioned in its orbital slot of 122? East in late 2002 or early 2003. Construction of the Atlas IIIB launch vehicle is on schedule with its required hardware now in place, and the assembly of the individual stages of the rocket, complete.

    The Company is currently in the process of securing insurance for the launch of AsiaSat 4, and we expect that this will be challenging. An unusually large number of losses resulting in claims by satellite operators over the last two years, coupled with the events of 11th September, have seen insurance rates escalating considerably. Additionally, the capacity available in the space insurance area has reduced, making it more difficult to secure coverage on large placements. Nevertheless, the Company is confident that launch insurance for AsiaSat 4 will be secured at acceptable terms. As at 30th June, 2002, the Company had incurred a total cost of HK$1,301 million (US$167 million) on AsiaSat 4, which does not include the premium on the launch insurance yet to be placed.

    The successful launch of AsiaSat 4 will enable the Group to provide higher power coverage with excellent elevation angles across the expanded areas of Australasia and the Greater China region. The additional transponder capacity will further strengthen our market position in expanding satellite services, including value-added solutions and broadband content delivery to the Asia Pacific region.

    Tai Po Satellite Control Centre

    The construction of our new Control Centre is slightly ahead of schedule. The piling work has been completed and work on the substructure, underground drainage and services conduits will commence following the pile load testing. The electrical, mechanical and fire services sub-contractors have been appointed, and the Centre is expected to be complete, as planned, for occupation in the second half of 2003.

    OUTLOOK

    The longer-term outlook remains positive, despite current difficulties in the global market. The primary drivers of the Groups satellite demand are television distribution and private network telecommunications -- the users of both requiring coverage over large geographic areas, at a fixed cost. Satellites provide such a solution, and one that cannot be matched by cable systems. This is particularly so in the fragmented Asia Pacific region.

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    ASIA SATELLITE TELECOMMUNICATIONS Results Announcement nd(22 August, 2002)

It is of note too, that despite falling prices for cable communication, the United States market,

    which has one of the worlds most developed and cheapest terrestrial networks, is also the largest user of satellite capacity for private multi-point networks. The significant growth potential for such networks in Asia remains unchanged.

    Furthermore, relative to their Gross Domestic Product (GDP) levels, many Asian countries are poorly served in terms of their number of television channels. Potential growth in this sector is held back in many regional markets because of protection by governments of incumbent channels. Experience shows, however, that market forces will prevail, at which time the number of channels will multiply rapidly.

    The combination of these factors is encouraging and supports the Groups single-minded strategy

    to remain focused on broadcast, rather than point-to-point, communication.

    Given the prevailing current market conditions, the Group does not anticipate an improvement in the second half of 2002. Nevertheless, the Group is well positioned to capitalise on its strengths whenever Asian economies improve, and the regional satellite market recovers. DIRECTORS AND STAFF

    I wish to thank the Board of Directors, management and all the employees of the Group for their support, dedication and hard work during this tough period. It is our staffs enduring spirit to

    succeed that underpins the Groups strength and its confidence to achieve future growth.

    Romain Bausch

    Chairman

    Hong Kong, 22nd August, 2002

    Disclaimer

    The financial information set out above does not constitute the Groups statutory financial

    statements for the six months ended 30th June, 2002 and 2001, and for the year ended 31st December, 2001, but is derived from those financial statements.

    Statements in this announcement relating to matters that are not historical facts are forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements involve risks, uncertainties and other factors, which may cause the actual results, performance or achievements of the Company to be materially different from those expressed or implied by the forward-looking statements. These factors include (1) risks associated with technology, including delayed launches, launch failures and in-orbit failures, (2) regulatory risks, (3) litigation and market risks and other factors which are described in further detail in the Companys 2001 Annual Report on Form 20-F on file with the U.S.

    Securities and Exchange Commission.

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    ASIA SATELLITE TELECOMMUNICATIONS Results Announcement nd(22 August, 2002)

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