Hong Kong-based AsiaSat Posts Slight Fall In Revenues
Interspace 09/11/02
author: Mark Holmes
Hong Kong-based satellite operator AsiaSat is struggling to bounce back after seeing a revenue drop in its latest financial
results. It reported revenues of HK$479 million ($61.2 million) in the first half of 2002, compared to HK$481 million ($61.7
million) at the same stage in 2001. Its first-half profits were slightly higher at HK$280 million ($35.9 million), compared to
HK$278 million ($35.6 million) in the first half of 2001. Its EBITDA (earnings before interest, taxes, depreciation and
amortisation) margin was 84 percent, compared to 86 percent in the first half of 2001.
Despite the fall in revenues, AsiaSat CEO Peter Jackson believes that under the difficult economic circumstances, the
operator performed well. He told Interspace: "From an absolute perspective, the results weren't that good because we
only achieved what we did last year. From a relative position, we are delighted. The industry is not doing too well. It is not
the satellite industry per se that is the problem. It is the fact that the video industry is suffering worldwide. In that
environment, you are not going to get a lot of expansion internationally."
The situation is unlikely to get any better for the foreseeable future, Jackson admitted. "It is all pretty negative. We are in
the middle of that. At the end of last year, we didn't see any silver lining in the short to medium term. I think the fact we
were able to maintain our position over the first six months is pretty impressive. I think that is the issue. We are still in that
phase. It is not as if the rainbow has suddenly appeared and we are rushing into it."
AsiaSat had a transponder utilization rate of 63 percent, a figure Jackson believes the operator can definitely improve upon
in the next 12 months, perhaps by more than 10 percent. "We would like that 63 percent to be higher. There is always the
need to expand and we have seen customers go away, which is not what we want. We are happy when it gets to around
75-80 percent. So, the 60 percent figure is a bit low, but equally you still make money on that level. We think it will be well
above 70 percent in 12 months time."
The major priority for the operator now will be the launch of AsiaSat 4, which is scheduled for the end of this year or early
next year. Jackson told Interspace that doing some pre-launch deals on AsiaSat 4 is one of the main challenges in the rest
of 2002. "The top priority is probably getting AsiaSat 4 up and start to sell it. We want to start to offer it and get customers
on it. I think that will be a real challenge."
Jackson observed, "The deals we are looking at, and not all of them will come to fruition, will be around the 15 percent
mark, but not all on day one. Some of that will grow to that figure over a number of years. That is quite healthy. We would
put it up with zero at the moment. We think the medium term satellite market is good and that you have to be up there.
Some customers will be on there before it launches and take advantage of lower prices."
AsiaSat has kept its pricing fairly flat on AsiaSat 2 and 3, despite pricing pressure in the market. Jackson believes that
despite a potential oversupply of capacity, operators are becoming more aware of market conditions. "What is changing is
some of the aspirations of some of our competitors. I think their aspirations are changing to be more realistic now. Their
over-estimate of what they could achieve is exactly that an overestimate. So, I think they maybe some more reality
coming into the market."
AsiaSat may also look to boost its regional position by making an acquisition. Jackson hinted to Interspace that the
operator has identified a top target, but whether a deal is possible is still open to question. "It is very difficult to identify our
number one target. We know what would be our number one choice, but whether that is possible or not, I don't know."
On the subject of new joint ventures and markets, Jackson said: "We are interested in getting into applications that use
transponders. We still see the DTH market as very positive for satellite. We think it has got tremendous advantages over
cable systems in some areas. We see rural telephony as something that is going to viable one day. We are looking at other
JV opportunities for satellite applications." |
