2006 Interim Results Presentation - i

Consolidated Results
(HK$M)
Turnover
Opex before dep’n
EBITDA
Depreciation
Operating profit
Net interest expense
Non-operating expense
Profit before taxation
Taxation
Net profit
EPS (HK cents)
DPS (HK cents)
1H06
1,274
(970)
304
(218)
86
4
1
91
(27)
64
3.1
3.5
2H05
1,218
(865)
353
(229)
124
3
(2)
125
302*
427
21.1
5.0
%chg.
+5%
+12%
-14%
-5%
-31%
+33%
-27%
-85%
1H05
1,223
(816)
407
(251)
156
1
157
(2)
155
%chg.
+4%
+19%
-25%
-13%
-45%
-42%
-59%
7.7
3.5
• Provision for taxation is a non-cash item*
• Net deferred tax credits of $305M booked to recognize tax
losses brought forward
Operating Expenses
1H06
2H05 %chg.
1H05
Programming
524
443 +18%
421
+24%
Network & Others
214
201
+6%
197
+9%
S, G&A
232
221
+5%
198
+17%
Sub-total
970
865 +12%
816
+19%
Depreciation
218
229
-5%
251
-13%
1,188
1,094
+9%
1,067
+11%
(HK$M)
Total
%chg.
• Programme investment on
– FIFA World Cup
– Sundream, movie & news platforms
• Higher marketing & sales spending for FIFA World Cup
4
Pay TV
1H06
2H05
chg.
1H05
chg.
Subs (000)
770
738
+32
718
+5
2
ARPU (HK$)
209
208
+1
216
-7
• Refocused on sales of basic package in 1H06
• Sub growth & ARPU helped by FIFA World Cup
5
Pay TV
(HK$M)
Turnover
Opex before
dep’n
EBITDA
Depreciation
Operating profit
1H06
2H05
966
936
+3%
948
+2%
(745)
(664)
+12%
(622)
+20%
221
272
-19%
326
-32%
(123)
(130)
-5%
(131)
-6%
98
142
-31%
195
-50%
%chg. 1H05
%chg.
• Higher programme investment
• Revenue & cost mismatch of FIFA World Cup
6
Internet & Multimedia
1H06
2H05
chg.
1H05
chg.
Broadband Subs
(000)
321
320
+1
301
+20
ARPU (HK$)
136
134
+2
144
-8
VoIP lines (000)
146
121
+25
69
+77
• Moderate growth in a penetrated market
• ARPU has stabilised and is rising
7
Internet & Multimedia
(HK$M)
1H06
2H05
296
279
Opex before dep’n (136)
(134)
Turnover
EBITDA
160
145
Depreciation
(92)
(98)
Operating profit
68
47
EBITDA margin
54%
52%
%chg. 1H05
+6%
%chg.
279
+6%
+1% (132)
+3%
+10%
147
+9%
-6% (117)
-21%
+45%
31
+121%
53%
• Opex remained stable
• Operating profit reached new record
8
Capex & Financial Position
• Capex maintained at low level of
$121 million
• Current ratio improved to 1.04
• Net cash was $325 million
9
Pay TV – Competitive Landscape
NOW
• In the market for 3 years
• Change in de facto controlling shareholder
after weeks of speculation
Galaxy
• In the market for 2.5 years
• Service rebranded again
• Channels launched on NOW platform
• Subscriber number not disclosed publicly
11
Pay TV – Competitive Landscape
50%
49%
43%
40%
41%
36%
1H06 TV Viewership share
- CABLE TV Subscribers Aged 4+
30%
20%
1H05
1H06
10%10%
10%
3% 2%
1% 1%
TVB Pearl
ATV World
0%
TVB Jade
•
Cable TV
ATV Home
Gained viewership against dominant FTA channel
12
Pay TV
•
Investment in programme differentiation:
– FIFA World Cup
– Relaunched the strongest news offering in HK :
• Cable Finance & Info, Cable News,
Live News & Top News channels
– Strengthened Hollywood movie offering by
launching HMC
– Further enhancement of CEN channel underway
– Enhanced children programming platform
•
Self-produced programme continues to dominate
viewership
13
Pay TV
• Other programme enhancement:
– Boomerang
– CNN Headline News
– MTV SEA
– MTV Mandarin
– VH1 India
14
Internet & Multimedia
• Bundling continued to be main strategy
• Deepened integration of sales & marketing
with pay TV operation
• Launched multi-player online game to
differentiate broadband service
15
Sundream Motion Pictures
• First film (“49 Days”《犀照》)
– Exceeded all expectations
– Awarded Grand Prize of the Fukuoka Asian Film Festival
• 3 other films expected to be released in 2H06:
– A Battle of Wit《墨攻》
• Andy Lau (劉德華), Fan Bing Bing (范冰冰),
Ahn Sung Ki (安聖基)
– Eye In The Sky《跟蹤》
• Simon Yam (任達華), Tony Leung (梁家輝),
Kate Tsui (徐子珊)
– Nothing Is Impossible《情意拳拳》
• Dayo Wong (黃子華), Cherrie Ying (應采兒),
Andy On (安志杰) & Debbie Goh (吳天瑜)
16
Sundream Motion Pictures
• Production for 3 other movies have begun or will
soon begin:
– Let’s Steal Together《雙子神偷》
• Twins, Yuen Wah (元華), Sammo Hung (洪金寶),
Wu Jing (吳京)
– Linger《蝴蝶飛》
• Vic Zhou (周渝民) & Li Bing Bing (李冰冰)
– Howling Arrow《響箭》
• Sammo Hung (洪金寶)
17
New Development
• First year to operate Newsline Express,
the multimedia service on KCRC’s trains
• Target audience of over 1.1 million daily
average passengers
• Passenger satisfaction rate reached 95%
• More than 85% of passengers found the
service attractive
18
Summary
• Continued to gain subs & viewers under
intense competition
• 1H06 profitability distorted by FIFA World
Cup
• Broadband profitability follows its uptrend
• Investment in differentiated programme
proven to be the right strategy
• Will continue to invest in innovative local
content
19
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