i-cable-cable · 2012-03-12 · sports 9 i-cable communications limited ... 24x7 • plans were...
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Communications LimitedCommunications Limitedi-CABLEii--CABLECABLE
2011 Final Results12 March 2012
Results Highlights
• Group revenue continued to rebuild, as it continued to strengthen programming, improve service offerings, expand product diversity, introduce value-added services, streamline operations & effect infrastructure improvements
Record high advertising turnover with growth in TV subscription base
• Loss position improved in 2011. The operating environment remains challenging as the Group strives to return to profitability
Operating margin is under considerable pressure in the face of competition and rising costs. This situation would likely remain a challenge in the foreseeable time ahead as we continue to invest in and for the future
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Subscription Services
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• Rebuilding nicely in many respects with higher viewership, subscription revenue, subscriber yield, especially advertising income and EBITDA growing noticeably faster than TV subscriber base
• Effective marketing and promotional campaigns were executed to leverage prized content and strong HD services
TelevisionTelevision
Television
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2011 2010 2009 vs 2010
HK$M 1H 2H FY FY FY % chg.Turnover 874 875 1,749 1,561 1,228 12%Opex before dep’n (822) (858) (1,680) (1,625) (1,111) 3%
EBITDA 51 17 69 (64) 117 n/aDepreciation (74) (90) (163) (158) (162) 3%
Operating Loss (22) (72) (95) (222) (45) - 57%
EBITDA Margin 6% 2% 4% -4% 10%Operating Margin -3% -8% -5% -14% -4%
2011
• Higher recurrent revenue mainly attributable to increase in higher yield subscriptions & airtime sales
• Operating margin under considerable pressure in the face of competition & rising costs
Value-added Services
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• Committed to deliver more value-added services to enhance customer experience
• Launched 9 HD Channels with best picture quality in town
5 HD Sports Channels (hd200 – hd204)
3 HD Movie Channels (hd241, hd243 & hd245)
1 HD Entertainment (hd212)
HD ChannelsHD Channels
Value-added Services
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• Hong Kong’s first-ever 3D BPL matches broadcast live and exclusively on CABLE TV
• Life-like excitement on 3D-capable TV sets at no additional charge to “HD BPL Pack”subscribers
• Ten 3D live BPL matches in the 2nd half of 2011/12 season
33D for TVD for TV
Value-added Services
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• Introduced Pay-Per-Day service, allowing football fans & viewers to watch up to 3 BPL live matches & related programmes on Channel 690 (SD) at $30 per day
PayPay--PerPer--Day BPLDay BPL
• The official broadcaster & exclusive holder of all media rights in Hong Kong
• Unprecedented live coverage on multiple platforms enabling viewers to watch it at any time, from anywhere and through multiple devices
• Carriage of high interest events as well as the opening & closing ceremonies
• Leveraging on CABLE TV experience in broadcasting Beijing 2008 Olympics on new media, FIFA World Cups, Asian Games and Winter Olympics
London 2012 Olympics
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• The leading sports platform in town
• Successful renewal of the exclusive broadcasting rights to
UEFA Champions League & UEFA Europa League until 2015
The German Bundesliga until 2015
• Comprehensive coverage of the 2011/2012 BPL season, boosting this platform to a total 11 HD & SD channels
SportsSports
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Exclusive Sports Programmes
• Professional team maintained its leadership position, serving the community with fast, accurate & independent reports & updates 24X7
• Plans were underway to introduce HD capabilities to news platform and enrich the presentation of our newscasts
Original Programming
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NewsNews
日本泡湯趣日本泡湯趣
名廚名廚
鄉土濃情甄文達鄉土濃情甄文達
樂壇第一手樂壇第一手
大大FunFun享享
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還看當年還看當年
Original Programming
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12
Original Programming
Viewership
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940,000
440,000
127,000 78,000
Source: CSM Media ResearchJan-Dec 2011, All Day All Time
• CABLE TV is the most watched Pay TV with average daily reach of 940,000
0%
10%
20%
30%
40%
50%
60%
HKC Now TV TVBPV bbTV
2009 2010 2011
Viewership
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Source: CSM Media ResearchAll Day All Time (Individuals aged 4+)
58%
52%
37%
30%
9%8%
2%4%
• CABLE TV viewership almost 2X the closest follower• Leadership position going stronger than ever, as it continued to
strengthen programming & improve service offerings
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Subscribers
1,106,0001,103,000
218,000225,000
149,000157,000
Dec 2011Jun 2011
TelevisionBroadbandTelephony
New Acquired Channels
• Phoenix Hong Kong Channel
鳳凰衛視香港台
• Hong Kong Satellite TV
香港衛視
• Liaoning Satellite TV
遼寧衛視
• Jiangsu Satellite TV
江蘇衛視
• Thrill
驚慄電影台16 i-C
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Cross-platform Opportunities
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• Strengthened service offerings to meet customers’ fast-changing needs and entertainment landscape not only TV services, but various alternatives available on the Internet & mobile platforms
• Further upside will come from cross-platform opportunities including outdoor advertising, new media, content distribution &Free TV once approved
Cross-platform Opportunities
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• Substantial turnover increases in 2011, a record high surpassingeven the years when there were high-interest mega programming such as FIFA World Cup
• Newsline Express in MTRC’s trains also reported significant growth in advertising revenue
• Taking this successful business venture further, an agreement was reached to cover additional lines under a phased scheme starting in December 2011
Advertising & OutdoorAdvertising & Outdoor
• Leveraging on CABLE TV experience on new media, we endeavor to make the best use of various platforms & technologies providing cross-media & cross-platform services
The London 2012 Olympic Games will be available on www.i-cable.com, enable citizens to watch it at any time from anywhere & through multiple means
Supply CABLE TV content to wireless operators
• Launched 'Joemud?', a multi-functional mobile app combining the latest news in trends, entertainment, dining, shopping, TV programming, movie & social networking
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Cross-platform OpportunitiesNew MediaNew Media
• Designated subscribers can watch programmes, anytime, anywhere at no additional fee
• 5 streaming channels providing round-the-clock services
Live NewsFinancial InformationEntertainment News BPL simulcast live matchesSoccer Betting
CABLE TV Goes MobileCABLE TV Goes Mobile
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Cross-platform Opportunities
• Promotional offersMultimedia signals, direct links to premier offers
• Programme guide Programme search, user-set push alerts for favourite programmes, programme schedule for coming week
• Personal interactive customer service
Instant booking of service offerings, account-related enquiries, technical support, frequently asked questions
CABLE TV Goes MobileCABLE TV Goes Mobile
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Cross-platform Opportunities
Cross-platform Opportunities
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• Government is considering 3 applications for domestic free TV licences that may lead to an imminent introduction of free territory-wide channels, including 2 proposed by CABLE TV on behalf of Fantastic Television
• Fantastic TV is all set for new licence and we are earnestly waiting for regulatory approval to provide viewers with more & better choice including London 2012 Olympics in unprecedented coverage
Free TVFree TV
Subscription Services
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InternetInternet
• Broadband business is still eroding & under competitive pressurefrom not only wire-line service providers but also wireless operators luring customers with aggressive service packages often bundled with multiple products
Roll-out of 130Mbps covering HK Island was completed earlier in the year and works for the rest of the territory werenearing completion
A plan is in place to arrest the erosion, with additional upgrade alternatives being implemented or under consideration
The resulting expansion in network capacity and improvement in service quality would help reduce customer attrition, protect revenue through up-selling to existing customers and attract new ones
2011 2010HK$M 1H 2H FY FY % chg.Turnover 167 172 340 433 - 21%
Opex before dep’n (98) (116) (213) (248) - 14%
EBITDA 70 57 127 184 - 31%Depreciation (39) (48) (88) (88) 0%
Operating Profit 30 9 39 96 - 60%
EBITDA Margin 42% 33% 37% 43%Operating Margin 18% 5% 11% 22%
2011
Internet & Multimedia
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• Competition from both wire-line & mobile services providers reduced EBITDA & Operating Margin
• Well acknowledged for its discerning tastes & acute market sensibility, Sundream continued with its proven track record of identifying quality productions & bringing them to the HK audience
“The King’s Speech”, a major box office with critical success both in HK & overseas
Award-winning productions in the pipeline for theatrical release
Sundream Motion Pictures
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Consolidated Results
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2011 2010HK$M 1H 2H FY FY % chg.Turnover 1,051 1,059 2,110 2,002 5%
Opex before dep’n (983) (1,048) (2,031) (1,997) 2%
EBITDA 68 11 78 5 1498%Depreciation (117) (142) (258) (254) 2%
Operating Loss (49) (131) (180) (249) - 28%Share of profit less losses ofassociates (3) (0) (3) (41) n/a
Net interest income & others (2) (1) (3) (0) n/a
Loss before taxation (51) (132) (186) (290) - 37%Taxation (4) 7 4 23 - 84%
Net Loss (55) (125) (179) (267) - 33%
2011
• Loss position improved but the operating environment remains challenging as the Group strives to return to profitability
• Continue to rebuild revenue & manage costs
Operating Expenses
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2011 2010HK$M FY FY % chg.Programming 1,305 1,274 2%
Network 225 233 - 3%
Selling, CS, G&A 409 435 - 6%
Cost of Sales 92 55 67%
Sub-total 2,031 1,997 2%Depreciation 258 254 2%
Total 2,289 2,251 2%
• Higher programming costs due primarily to European soccer partlyoffset by expenses relating to FIFA World Cup, Asian Games & Winter Olympics which did not recur in 2011
• Acquisition of telephony business leads to higher cost of sales
Outlook• Competitive pressure is not expected to ease & operating costs
will remain high across all business arms in 2012
• Despite the past few years’ significant increase in Pay TV customer base, similar growth rates would be difficult to sustain in a fairly saturated Pay TV market
• Broadband & telephony business would continue to come under pressure from aggressively priced offers by both wire-line and mobile services competitors. All these factors will continue todrag the Company’s return to profitability
• Despite such challenges, we will endeavor to strengthen our programming offers, enhance the effectiveness of marketing initiatives, invest in service & infrastructure upgrades, introduce innovative value-added services & explore ways outside traditional broadcasting means to unlock the full potential of prized content so as to drive customer & revenue growths
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i-CABLE Communications LimitedHKSE Stock Code: 1097.HK
DisclaimerAll 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.
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