interim results 2012 - ir ppt final - i-cable communications · • substantial increases in...
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2012 Interim Results7 August 2012
i-CABLEii--CABLECABLECommunications Communications LimitedLimited
Results Highlights
• 2012 is a period of consolidation fortifying hard-earned inroads amidst looming economic uncertainties and a challenging operating environment
• Competitive pressure remained high across business segments affecting our overall performance
• Across the main product lines, negative subscriber growth was reported & rising costs eroded flat turnover to result in largerlosses
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Television
• Keen competition from both within and outside the Pay TV market remained a major factor behind the attritions. Other causes included customers’ changing viewing habits and ever-increasing range of entertainment choices. Staying ahead of competition has become more challenging than ever
• Substantial increases in premium and general programming costs, rising costs of sales, costly investments in service and system upgrades and the consolidation of our TV customer growth affected the Group's performance and slackened the pace of our return to profitability
Subscription Services
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Television
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• Lower turnover mainly attributable to a decrease in higher yieldsubscriptions as well as network related project income
• Higher operating costs primarily due to the higher cost of majorsoccer leagues in the new season
2012
HK$M 1H 2H 1H vs 1H11
Turnover 874 875 855 - 2%
Opex before dep’n 822 858 836 2%
EBITDA 51 17 20 - 62%
Depreciation (74) (90) (79) 7%
Operating Loss (22) (72) (59) 167%
EBITDA Margin 6% 2% 2%
Operating Margin -3% -8% -7%
2011
London 2012 Olympics
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• Official Broadcaster of the London 2012 Olympics
• Full range of media rights covering pay TV, new media and free TV
• Cross-platform coverage designed to bring the excitement of the Games covering 26 sports and spanning 17 days to Hong Kong citizens via home TV, computer screen and mobile device
London 2012 Olympics
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• Over 1,600 programming hours in multiple TV formats, of which over 900 hours were live broadcasts�Licensed to free-to-air to enrich
viewers’ choice and address those who had access to analogue TV only
• 9 Olympic channels (5SD + 4HD)
�Olympic One (CH61 / hd201)
�Olympic Two (CH62 / hd202)
�Olympic Soccer Channel (CH63/ hd203)
�Olympic Three (CH64)
�Olympic 3D Channel (hd204)
�CABLE No. 1 (CH01)
• First time extensive live broadcasts of the Olympics in 3D TV
• Over 10 hours of games programming everyday totaling more than 200 hours over 17 days with professional commentary in English�Opening & Closing Ceremony�Swimming�Artistic Gymnastics�Diving �Basketball�Synchronized Swimming�Rowing
London 2012 Olympics
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Olympics in 3D LiveOlympics in 3D Live
• Free public access, viewers can watch it at any time, from anywhere & through multiple devices
�http://2012.i-cable.com� “joemud?” mobile app
• Progress of other competitions, footage archives, interviews of athletes & coaches and news clips are also available on the website
Cross-Platform Coverage
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New MediaNew Media
CABLE TV On MobileCABLE TV On Mobile
• Designated subscribers can watch programmes anytime, anywhere at no additional fee
• Available in both iOS & Android
• 6 streaming channels providing round-the-clock services�Live News�Finance Information�Entertainment News�Olympic One�Olympic Soccer�Olympic Three
Cross-Platform Coverage
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Outdoor & AdvertisingOutdoor & Advertising
Cross-Platform Opportunities
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• Hong Kong Cable News Express, the exclusive commercial airtime sales distributor & content provider of MTR’s Newsline Express recorded growth in advertising revenue
• Extended to Kwun Tong Line, in addition to MTR East Rail, West Rail & Ma On Shan Lines
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Exclusive Sports Programmes
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Flagship Programming
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Flagship Programming
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HD Entertainment Programming
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New Acquired Channels
• Jiangsu Satellite TV
江蘇衛視
• Thrill
驚慄電影台
• TJTV
天津衛視
• Hubei TV
湖北衛視
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0%
10%
20%
30%
40%
50%
60%
70%
HKC Now TV TVBPV bbTV
Viewership
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Source: CSM Media Research
All Day All Time (Individuals aged 4+)
• CABLE TV viewership widened its lead
3%
10%
6%
35%
29%
52%
61%
2H10
1H11
2H11
1H12
4%
1H10
Customers
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1,094,0001,106,000
205,000218,000
135,000149,000
Jun 2012Dec 2011
Television
Broadband
Telephony
Internet
• Competition in the Broadband & Telephony sectors was fierce during the period and is not expected to ease in a saturated market
• Fixed line services are being threatened by the phenomenal growth in mobile services
• We would continue with network upgrades and enhancements to ensure a full range of offers catering for the respective needs of different customers including fibre-to-the-home services for top-end users, attractively priced packages for customers wanting high-speed connections and affordable plans for those requiring more casual uses only
Subscription Services
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Internet & Multimedia
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• Competitors’ aggressive pricing and the fast-growing mobile broadband users lead to lower subscribers and margin
• Higher operating costs mainly due to higher cost for Telephony business upon the acquisition of i-CABLE Telecom Limited
2012
HK$M 1H 2H 1H vs 1H11
Turnover 167 172 169 1%
Opex before dep’n (98) (116) (111) 13%
EBITDA 70 57 58 - 16%
Depreciation (39) (48) (46) 17%
Operating Profit 30 9 12 - 59%
EBITDA Margin 42% 33% 35%
Operating Margin 18% 5% 7%
2011
• Released 13 titles in the first half of 2012, with 9 titles in the pipeline
• First time UEFA Champions League Final 3D Live in cinemas
� Joint initiative with leading local cinema circuits including Broadway Circuit, Orange Sky Golden Harvest Entertainment, Multiplex Cinema & UA Cinema Circuit
Sundream Motion Pictures
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Consolidated Results
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• Competitive pressure remained high across business segments
• Negative subscriber growth eroded flat turnovers and resulted in losses
2012
HK$M 1H 2H 1H vs 1H11
Turnover 1,051 1,059 1,038 - 1%
Opex before dep’n (983) (1,048) (1,010) 3%
EBITDA 68 11 28 - 58%
Depreciation (117) (142) (129) 10%
Operating Loss (49) (131) (100) 105%
Net interest income & others (2) (1) 2 N/A
Loss before taxation (51) (132) (99) 93%
Taxation (4) 7 2 N/A
Net Loss (55) (125) (97) 77%
2011
Operating Expenses
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• Higher operating expenses due to increases in programming costs, rising costs of sales, costly investments in service and system upgrades
2012
HK$M 1H 2H 1H vs 1H11
Programming 637 668 657 3%
Network 113 113 114 2%
Selling, CS, G&A 189 220 186 - 2%
Cost of Sales 45 47 52 17%
Sub-total 983 1,048 1,010 3%
Depreciation 117 142 129 10%
Total 1,100 1,190 1,138 3%
2011
• Following our strong Pay TV customer growth in recent years, achieving
similar growth in the foreseeable future would be very unlikely in a highly
saturated and competitive TV market
• We expect airtime sales to improve during the second half of the year
when the major English & European football leagues will be back in
action and consumer spending will normally go up during the festive
days running up to the end of the year
• High programming cost is expected to put pressure on the Group’s
profitability in the second half but we would continue to invest in premier
programming across our flagship platforms, HD capabilities expansion,
territory-wide broadband upgrades, customer service improvements and
new media initiatives to drive customer and revenue growths and
unleash hidden revenue potential across platforms
• There is no development on Fantastic TV’s application for domestic free
TV licence
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Outlook
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i-CABLE Communications LimitedHKSE Stock Code: 1097.HK
Disclaimer
All information and data are provided for information purposes only. All opinions
included herein constitute i-CABLE’s judgement as of the date hereof and are
subject to change without notice. i-CABLE and its subsidiaries and affiliates
hereby disclaim (i) all express, implied, and statutory warranties of any kind to
user and/or any third party including warranties as to accuracy, timeliness,
completeness, or fitness for any particular purpose; and (ii) any liability
whatsoever for any loss howsoever arising from or in reliance upon the whole or
any part of the information and data contained herein.