i -CABLE CABLE Communications Limited Limited Communications - - PowerPoint PPT Presentation

2013 Interim Results

8 August 2013

i-CABLE i i-

• CABLE

CABLE

Communications Communications Limited Limited

• Over-capacity continued but price competition stabilized
• Subscriber & revenue erosion during & subsequent to the period

was relatively mild

• Broadband revenue steadied despite slightly smaller customer base
• Due to prudent investment in sports rights, operating costs are

expected to decline at a faster rate than revenue decline in the second half of 2013 which may improve margin

• Capex was one gear lower

Results Highlights

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Television

• The customer base declined partly due to the expiry of BPL rights.

Thanks to a host of programming, marketing & service enhancement initiatives, efforts to retain customers paid off with attrition rates kept well in check

• Due to prudent investment in sports rights, operating margin is

expected to improve in the second half of 2013

Subscription Services

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Television

4

• Lower turnover mainly attributable to a decrease in subscription

revenue related to BPL as well as lower advertising income

• Subscriber & revenue erosion during & subsequent to the period

was relatively mild

2013 HK$M 1H 2H 1H vs 1H12 Turnover 855 901 820

• 4%

Opex before dep’n (836) (951) (827)

• 1%

EBITDA 20 (50) (7) n/a Depreciation (79) (75) (70)

• 12%

Operating Loss (59) (125) (76) 29% EBITDA Margin 2%

• 6%
• 1%

Operating Margin

• 7%
• 14%
• 9%

2012

i-CABLE Communications Limited

• Sports continued to feature strongly

with exclusive rights to the European, Australian & Japanese leagues & tournaments

• Diversity

was never

• verlooked,

bringing viewers a wide range of prestigious international sports events spanning swimming, badminton, basketball, volley ball, darts, bowling, snooker, ice hockey, car racing, dancing, tennis, figure skating & table tennis

Programming

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Sports Sports

Programming

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• Official broadcaster of the 17th Asian

Games Incheon 2014

• All media rights with extensive live &

archived coverage in multiple formats across media platforms

Sports Sports

• Launched two flagship entertainment

channels

HD FAN. Entertainment Channel

高清奇妙娛樂台 (Ch 12 / hd 212)

HD CABLE Drama Channel

高清奇寶劇集台

(Ch 13 / hd 213)

Programming

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Entertainment Entertainment

Programming

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• Introduced in-depth weeknight reports,

sharing unique perspective of the most topical news & current affairs on the mainland

• Our local journalists not only provided

professional coverage of news at home but also made news headlines themselves with their remarkable investigative reports often instantly & widely picked up & quoted by fellow media organisations

Programming

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News News

50% 27% 15% 7% 0% 10% 20% 30% 40% 50% 60% HKC Now TV TVBNV bbTV 43% 15% 5% 37%

Viewership

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Source: Nielsen HKTAM CABLE TV individuals aged 4+ Jan – Jun 2013, All Day All Time

• CABLE TV viewership nearly 2X the closest follower

CABLE TV TVB Jade (Analog+SD+HD)

Source: Nielsen HKTAM Pay TV viewers aged 4+ Jan – Jun 2013, All Day All Time

50% 27% 15% 7%

CABLE TV Now TV* TVBNV^ bbTV

Other Terrestrial & Satellite TV Other Pay TV

37% 43% 16% 4%

Viewing Share Among Pay TV Operators TV Share Among CABLE TV 4+ subs

* Excluded 8 TVBNV channels via Now TV platform ^ Included 8 TVBNV channels via Now TV platform

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Customers

1,074,000 1,089,000 199,000 201,000 120,000 126,000

June 2013 December 2012

Television Broadband Telephony

Internet & Multimedia

• Our broadband business continued to come under pressure from

both wire-line & wireless service providers

• Competition remained intense with over-capacity in the sector, the

first half of 2013, however, did not see any harsh price wars

• Whilst the market has been relatively stable, the return to aggressive

pricing to fight for market share remains a risk

Subscription Services

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Internet & Multimedia

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• Broadband revenue steadied despite slightly smaller customer

base

2013 HK$M 1H 2H 1H vs 1H12 Turnover 169 169 171 1% Opex before dep’n (111) (110) (112) 1% EBITDA 58 59 58 0% Depreciation (46) (46) (46)

• 1%

Operating Profit 12 14 13 2% EBITDA Margin 35% 35% 34% Operating Margin 7% 8% 7% 2012

• Released 11 titles in the first half of 2013

Sundream Motion Pictures

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Consolidated Results

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2013 HK$M 1H 2H 1H vs 1H12 Turnover 1,038 1,089 1,009

• 3%

Opex before dep’n (1,010) (1,140) (1,007) 0% EBITDA 28 (51) 1

• 96%

Depreciation (129) (124) (118)

• 8%

Operating Loss (100) (174) (117) 17% Finance Costs & Others 2 (1) n/a Loss before taxation (99) (174) (118) 20% Taxation 2 (7) 6 221% Net Loss (97) (181) (112) 16% Capex 113 96 78

• 31%

2012

• Margin may improve in the second half of 2013 with our

prudent investment in sports rights

• Capex was one gear lower

Operating Expenses

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• Lower operating costs primarily due to lower sales acquisition

cost & network related costs

2013 HK$M 1H 2H 1H vs 1H12 Programming 657 770 662 1% Network 114 108 109

• 5%

Selling, CS, G&A 186 203 186 0% Cost of Sales 52 58 51

• 2%

Sub-total 1,010 1,140 1,007 0% Depreciation 129 124 118

• 8%

Total 1,138 1,264 1,126

• 1%

2012

• In addition to the usual constraints of saturating markets, the business

climate looks set to be even more challenging & competitive pressure stronger in the next few years

• 3½ years have gone by since Group affiliate Fantastic Television Limited

submitted an application for a free domestic TV programme service

• licence. Whilst it remains to be seen whether the Government will live up

to its promise to open up the free TV market, the TV landscape has already seen significant changes

• The overwhelmingly dominant TV player has become more aggressive

than ever, from acquiring premier sports rights, to poaching programming, ideas & talents, and to setting up dedicated sports channels on its pay platform, making full use of “due process” to steadfastly challenge the Government’s decision to open up the free TV market

• The overall operating environment is not expected to improve in the near

term. However, operating costs are expected to decline in the second half of 2013 due to factors such as stringent cost control, prudent investments & the decrease in sports programming costs

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Outlook

i-CABLE Communications Limited

i-CABLE Communications Limited HKSE Stock Code: 1097.HK

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