FORM 6-K
SECURITIES AND EXCHANGE COMMISSION
Washington DC 20549
Report of Foreign Issuer
Pursuant to Rule 13a-16 or 15d-16 of
the Securities Exchange Act of 1934
For the month of August 2006
Commission File Number: 1-14396
ASIA SATELLITE TELECOMMUNICATIONS HOLDINGS LIMITED
--------------------------------------------------
(Translation of registrant's name into English)
17/F, The Lee Gardens, 33 Hysan Avenue, Causeway Bay, Hong Kong
(Address of principal executive offices)
Indicate by check mark whether the registrant files or will file annual reports
under cover Form 20-F or Form 40-F.
Form 20-F [X] Form 40-F [_]
Indicate by check mark if the registrant is submitting the Form 6-K in paper as
permitted by Regulation S-T Rule 101(b)(1). __
Note: Regulation S-T Rule 101(b)(1) only permits the submission in paper of a
Form 6-K if submitted solely to provide an attached annual report to security
holders.
Indicate by check mark if the registrant is submitting the Form 6-K in paper as
permitted by Regulation S-T Rule 101(b)(7): __
Note: Regulation S-T Rule 101(b)(7) only permits the submission in paper of a
Form 6-K if submitted to furnish a report or other document that the registrant
foreign private issuer must furnish and make public under the laws of the
jurisdiction in which the registrant is incorporated, domiciled or legally
organized (the registrant's "home country"), or under the rules of the home
country exchange on which the registrant's securities are traded, as long as the
report or other document is not a press release, is not required to be and has
not been distributed to the registrant's security holders, and, if discussing a
material event, has already been the subject of a Form 6-K submission or other
Commission filing on EDGAR.
2
Indicate by check mark whether the registrant by furnishing the information
contained in this Form is also thereby furnishing the information to the
Commission to Rule 12g3-2(b) under the Securities Exchange Act of 1934.
Yes [_] No [X]
If "Yes" is marked, indicate below the file number assigned to the registrant
in connection with Rule 12g3-2(b):_________.
3
Information furnished on this form:
Announcement, dated August 24, 2006, by the Registrant regarding the
Announcement of Unaudited Results for the Six Months Ended 30 June 2006
EXHIBIT
EXHIBIT NUMBER PAGE
-------------- ----
1.1 Announcement, dated August 24, 2006, by the Registrant 5
regarding the Announcement of Unaudited Results for the
Six Months Ended 30 June 2006
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
ASIA SATELLITE TELECOMMUNICATIONS HOLDINGS LIMITED
(Registrant)
Date: August 25, 2006 By: /s/ Peter Jackson
---------------------------------------------
Peter Jackson
Chief Executive Officer
ASIA SATELLITE TELECOMMUNICATIONS HOLDINGS LIMITED
[CHINESE CHARACTERS OMITTED]
(Incorporated in Bermuda with limited liability)
(STOCK CODE: 1135)
ANNOUNCEMENT OF UNAUDITED RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2006
The Board of Directors is pleased to announce the unaudited interim results of
the Group for the six months ended 30 June 2006 as follows:
CONDENSED CONSOLIDATED INTERIM INCOME STATEMENT
(ALL AMOUNTS IN HK DOLLARS THOUSANDS UNLESS OTHERWISE STATED)
----------------------------------------------------------------------------------
UNAUDITED
SIX MONTHS ENDED 30 JUNE
------------------------
Note 2006 2005
CONTINUING OPERATIONS
Sales 4 475,760 445,338
Cost of services 5 (204,341) (210,373)
-------- --------
GROSS PROFIT 271,419 234,965
Other gains (net) 5 41,038 16,562
Administrative expenses 5 (43,094) (38,246)
-------- --------
OPERATING PROFIT 269,363 213,281
Share of loss of associates (1,688) (1,909)
-------- --------
PROFIT BEFORE INCOME TAX 267,675 211,372
Income tax expense 6 (28,780) (26,660)
-------- --------
PROFIT FROM CONTINUING OPERATIONS AND FOR THE HALF-YEAR 238,895 184,712
======== ========
ATTRIBUTABLE TO:
- equity holders of the Company 239,211 185,240
- minority interests (316) (528)
-------- --------
238,895 184,712
======== ========
HK$ HK$
PER SHARE PER SHARE
EARNINGS PER SHARE FOR PROFIT ATTRIBUTABLE TO THE
EQUITY HOLDERS OF THE COMPANY,
EXPRESSED IN HK$ PER SHARE
- basic 7 0.61 0.47
======== ========
- diluted 7 0.61 0.47
======== ========
Interim dividend
Interim dividend declared of HK$0.08
(2005: HK$0.08) per share 31,221 31,221
======== ========
Note 1 to note 8 form an integral part of this condensed interim financial
information.
-5-
CONDENSED CONSOLIDATED INTERIM BALANCE SHEET
(ALL AMOUNTS IN HK DOLLARS THOUSANDS UNLESS OTHERWISE STATED)
--------------------------------------------------------------------------------
AS AT
-------------------------
30 JUNE 31 December
2006 2005
UNAUDITED Audited
ASSETS
NON-CURRENT ASSETS
Property, plant and equipment 2,590,809 2,620,911
Leasehold land and land use rights 23,907 24,199
Intangible assets 1,356 1,339
Unbilled receivable 172,597 174,563
Interests in associates 14,729 14,294
Amount paid to tax authority 122,466 93,666
--------- ---------
TOTAL NON-CURRENT ASSETS 2,925,864 2,928,972
--------- ---------
CURRENT ASSETS
Inventories 431 434
Trade and other receivables 154,515 118,598
Cash and cash equivalents 1,818,420 1,635,526
--------- ---------
TOTAL CURRENT ASSETS 1,973,366 1,754,558
--------- ---------
TOTAL ASSETS 4,899,230 4,683,530
========= =========
EQUITY
CAPITAL AND RESERVES ATTRIBUTABLE TO
EQUITY HOLDERS OF THE COMPANY
Capital 43,641 43,641
Other reserve 464 -
Retained earnings 4,194,386 4,060,547
--------- ---------
4,238,491 4,104,188
MINORITY INTERESTS 5,221 5,537
--------- ---------
TOTAL EQUITY 4,243,712 4,109,725
--------- ---------
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CONDENSED CONSOLIDATED INTERIM BALANCE SHEET
(ALL AMOUNTS IN HK DOLLARS THOUSANDS UNLESS OTHERWISE STATED)
-------------------------------------------------------------------------------
AS AT
------------------------
30 JUNE 31 December
2006 2005
UNAUDITED Audited
LIABILITIES
NON-CURRENT LIABILITIES
Deferred income tax liabilities 185,960 192,654
Deferred revenue 155,074 87,654
--------- ---------
TOTAL NON-CURRENT LIABILITIES 341,034 280,308
--------- ---------
CURRENT LIABILITIES
Construction payables 2,942 3,096
Other payables and accrued expenses 72,541 64,118
Deferred revenue 146,153 151,982
Current income tax liabilities 92,727 74,180
Dividend payable 121 121
--------- ---------
TOTAL CURRENT LIABILITIES 314,484 293,497
--------- ---------
TOTAL LIABILITIES 655,518 573,805
--------- ---------
TOTAL EQUITY AND LIABILITIES 4,899,230 4,683,530
========= =========
NET CURRENT ASSETS 1,658,882 1,461,061
========= =========
TOTAL ASSETS LESS CURRENT LIABILITIES 4,584,746 4,390,033
========= =========
Note 1 to note 8 form an integral part of this condensed interim financial
information.
-7-
Notes (All amounts in HK dollars thousands unless otherwise stated):
1. Independent review
The interim results for the six months ended 30 June 2006 are unaudited
but have been reviewed in accordance with Statement of Auditing Standard
700 "Engagements to Review Interim Financial Reports" issued by the Hong
Kong Institute of Certified Public Accountants (the "HKICPA"), by
PricewaterhouseCoopers, whose unmodified review report is included in the
interim report to be sent to equity holders.
2. Basis of preparation
This condensed consolidated interim financial information for the
half-year ended 30 June 2006 has been prepared in accordance with IAS/HKAS
34, 'Interim financial reporting'. The interim condensed financial report
should be read in conjunction with the annual financial statements for the
year ended 31 December 2005.
3. Principal accounting policies
The accounting policies adopted are consistent with those of the annual
financial statements for the year ended 31 December 2005 as described in
the annual financial statements for the year ended 31 December 2005.
The following new standards, amendments to standards and interpretations
are mandatory for financial year ending 31 December 2006.
o Amendment to IAS/HKAS 19, 'Actuarial gains and losses, group plans
and disclosures', effective for annual periods beginning on or after
1 January 2006. This amendment is not relevant for the Group;
o Amendment to IAS/HKAS 39, Amendment to 'The fair value option',
effective for annual periods beginning on or after 1 January 2006.
This amendment is not relevant for the Group;
o Amendment to IAS/HKAS 21, Amendment 'Net investment in a foreign
operation', effective for annual periods beginning on or after 1
January 2006. This amendment has no impact on the Group;
o Amendment to IAS/HKAS 39, Amendment 'Cash flow hedge accounting of
forecast intragroup transactions', effective for annual periods
beginning on or after 1 January 2006. This amendment is not relevant
for the group;
o Amendment to IAS/HKAS 39 and IFRS/HKFRS 4, Amendment 'Financial
guarantee contracts', effective for annual periods beginning on or
after 1 January 2006. This amendment is not relevant for the Group;
o IFRS/HKFRS 6, 'Exploration for and evaluation of mineral resources',
effective for annual periods beginning on or after 1 January 2006.
This standard is not relevant for the Group;
o IFRIC/HK(IFRIC)-Int 4, 'Determining whether an arrangement contains a
lease', effective for annual periods beginning on or after 1 January
2006. The Group has reviewed its contracts. Some of them are required
to be accounted for as leases in accordance with IAS/HKAS 17,
'Leases'. However, these leases are operating leases, and their
reclassification has had no impact on the expense recognised in
respect of them;
o IFRIC/HK(IFRIC)-Int 5, 'Rights to interests arising from
decommissioning, restoration and environmental rehabilitation funds',
effective for annual periods beginning on or after 1 January 2006.
This interpretation is not relevant for the Group; and
o IFRIC/HK(IFRIC)-Int 6, 'Liabilities arising from participating in a
specific market - waste electrical and electronic equipment',
effective for annual periods beginning on or after 1 December 2005.
This interpretation is not relevant for the group.
-8-
The following new standards, amendments to standards and interpretations
have been issued but are not effective for 2006 and have not been early
adopted:
o IFRIC/HK(IFRIC)-Int 7, 'Applying the Restatement Approach under
IFRS/HKFRS 29', effective for annual periods beginning on or after 1
March 2006. Management does not expect the interpretation to be
relevant for the Group;
o IFRIC/HK(IFRIC)-Int 8, 'Scope of IFRS/HKFRS 2', effective for annual
periods beginning on or after 1 May 2006. Management is currently
assessing the impact of IFRIC/HK(IFRIC)-Int 8 on the Group's
operations;
o IFRIC/HK(IFRIC)-Int 9, 'Reassessment of Embedded Derivatives',
effective for annual periods beginning on or after 1 June 2006.
Management does not expect the interpretation to be relevant for the
Group;
o IFRS/HKFRS 7, 'Financial instruments: Disclosures', effective for
annual periods beginning on or after 1 January 2007. IAS/HKAS 1,
'Amendments to capital disclosures', effective for annual periods
beginning on or after 1 January 2007. Management is currently
assessing the impact of IFRS/HKFRS 7 on the Group's operations.
4. Sales and segment information
The Company's sales is analysed as follows:
SIX MONTHS ENDED 30 JUNE
------------------------
2006 2005
Income from provision of satellite transponder capacity:
- recurring 415,530 430,816
- non-recurring 45,578 -
Sales of satellite transponder capacity 12,246 12,246
Other revenue 2,406 2,276
------- -------
475,760 445,338
======= =======
The Company has only one business segment, namely the operation,
maintenance and provision of satellite telecommunication systems for
broadcasting and telecommunications. The Company's primary reporting
format for segment reporting purposes under HKAS 14 "Segment Reporting" is
the geographical basis. For the purpose of classification, the country
where the customer is incorporated is deemed to be the source of sales.
However, the Company's operating assets consist primarily of its
satellites which are used, or are intended for use, for transmission to
multiple geographical areas and therefore cannot be allocated between
geographical segments. Accordingly, no geographical analysis of expenses,
assets and liabilities has been presented.
The following table provides an analysis of the Company's sales by
geographical markets:
SIX MONTHS ENDED 30 JUNE
------------------------
2006 2005
Hong Kong 170,404 167,276
Greater China, including Taiwan 94,077 99,780
United States of America 39,874 38,597
United Kingdom 26,372 24,410
British Virgin Islands 1,409 8,305
Others 143,624 106,970
------- -------
475,760 445,338
======= =======
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5. Operating profit
The following items have been credited/charged to the operating profit
during the interim period:
SIX MONTHS ENDED 30 JUNE
------------------------
2006 2005
Interest income 41,006 16,458
Gain on disposal of property, plant and equipment and other 25 100
transponders
Others 7 4
------- -------
41,038 16,562
======= =======
Salary and other benefits, including directors' remuneration 38,754 33,050
Contributions to retirement benefits schemes 2,317 2,120
------- -------
Total staff costs 41,071 35,170
======= =======
Auditors' remuneration 888 450
Depreciation, amortisation and impairment expenses
- Intangibles assets - Licences 80 -
- Property, plant and equipment 148,193 146,243
Operating leases
- premises 2,189 3,133
- leasehold land and land use rights 292 292
Net exchange loss 813 193
======= =======
6. Income tax expense
A significant portion of the Group's profit is treated as earned outside
Hong Kong and is not subject to Hong Kong profit tax.
Hong Kong profits tax has been provided at the rate of 17.5% (2005: 17.5%)
on the estimated assessable profit for the period.
Overseas tax, including the Foreign Enterprises Income Tax in the People's
Republic of China, is calculated at 5% to 20% of the gross revenue earned
in certain of the overseas jurisdictions.
SIX MONTHS ENDED 30 JUNE
------------------------
2006 2005
Current income tax
- Hong Kong Profits Tax 26,771 23,963
- Overseas taxation 8,703 9,712
Deferred income tax reversal (6,694) (7,015)
------- -------
28,780 26,660
======= =======
The Group currently has a tax case in dispute with the Indian tax
authorities. Details of this are set out in note 8.
-10-
7. Earnings per share
Earnings per share attributable to equity holders of the Company arises
from continuing operations as follows:
Six months ended 30 June
(HK$ PER SHARE)
------------------------
2006 2005
Earnings per share for profit from continuing operations attributable
to the equity holders of the Company
- basic 0.61 0.47
- diluted 0.61 0.47
8. Contingent liabilities
Under Indian tax regulations, the Group may be subject to Indian income
tax on revenues received by the Group in respect of income from provision
of satellite transponder capacity to the Group's customers for purposes of
those customers carrying on business in India or earning income from any
source in India.
The Indian tax authorities have assessed the Group for income tax as
follows:
Assessment year Amount HK$ Amount INR
(approximate) (approximate)
1997-98 20 million 115 million
1998-99 23 million 141 million
1999-00 22 million 127 million
2000-01 14 million 84 million
2001-02 29 million 171 million
2002-03 38 million 210 million
2003-04 43 million 247 million
----------- -------------
Total 189 million 1,095 million
=========== =============
The Group has filed appeals for each of the assessment years 1997-98 to
2003-04.
No assessment has yet been made for the 2004-05 or 2005-06 assessment
years.
The Income Tax Appellate Tribunal (the "Tribunal") in an earlier appeal
filed against the original assessment for the assessment year 1997-98 held
that the Group is liable for Indian income tax under certain
circumstances. The Group does not believe that it is liable for the Indian
income tax as held by the Tribunal and has filed an appeal against the
Tribunal's decision. The tax authorities have also filed an appeal against
the Tribunal's decision. Both the appeals have been admitted by the High
Court.
In order to obtain a stay of recovery proceedings, the Group has made
payments as follows and has recorded these payments as an asset on the
assumption that the amounts are recoverable:
Assessment year Amount HK$ Amount INR
(approximate) (approximate)
1997-98 13 million 78 million
1998-99 15 million 88 million
1999-00 10 million 62 million
2000-01 9 million 50 million
2001-02 20 million 119 million
2002-03 27 million 148 million
2003-04 29 million 165 million
----------- -----------
Total 123 million 710 million
=========== ===========
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In addition, based on the general principles set forth by the Tribunal,
the amount of income taxable in India depends on the payments made by the
Group's customers to the Group for the purpose of those customers carrying
on business in India or earning income from any source in India. As such
information is proprietary in nature and has not been provided by the
Group's customers, the Group cannot reasonably estimate the taxable income
and therefore also cannot estimate the amount of income tax to which the
Group may be assessed. Furthermore, as stated above, the Group has filed
an appeal against the Tribunal's decision. The appeal has been admitted by
the High Court and is pending before the Court. Accordingly, no provision
has been recognised for Indian income tax in the Group's financial
statements.
9. Purchase, sale or redemption of own securities
During the six months ended 30 June 2006, neither the Company nor any of
its subsidiaries purchased, sold or redeemed any of the Company's listed
securities.
10. Corporate Governance
The Group has adopted all the Code Provisions in Appendix 14 of the Rules
Governing the Listing of Securities ("Listing Rules") except the
following:
The Remuneration Committee is composed of three members, of whom one
is Independent Non-executive Director and the other two are
Non-executive Directors. The Committee is chaired by the Independent
Non-executive Director.
The Group has adopted procedures governing directors' securities
transactions in compliance with the Model Code as set out in Appendix 10
of the Listing Rules.
11. Audit Committee
The Audit Committee consists of five members, three of whom are
Independent Non-executive Directors who satisfy independent, financial
literacy and experience requirements, whilst the other two members are
Non-executive Directors and have only observer status with no voting
rights. The Committee is chaired by an Independent Non-executive Director,
who possesses appropriate professional qualifications and experience in
financial matters.
The Committee has reviewed the accounting principles and practices adopted
by the Group and the unaudited condensed consolidated interim financial
information for the six months ended 30 June 2006 in conjunction with the
Company's external auditors.
12. Charges on Assets
The Group did not have any charges on assets as at 30 June 2006 and 31
December 2005.
13. Publication of detailed results, announcement on the exchange's website
A detailed results announcement containing all the information required by
paragraphs 46(1) to 46(6) of Appendix 16 of the Exchange Listing Rules
will be published on the Exchange's website in due course.
14. Miscellaneous
The Directors are not aware of any material changes from the information
published in the annual report for the year ended 31 December 2005, other
than disclosed in this announcement.
15. Closure of register of members
The Register of equity holders of the Company will be closed from 5 to 12
October 2006 (both days inclusive). In order to qualify for the interim
dividend, all transfers, accompanied by the relevant share certificates,
must be lodged with the Company's Hong Kong Branch Share Registrars,
Computershare Hong Kong Investor Services Limited at 46th Floor, Hopewell
Centre, 183 Queen's Road East, Hong Kong for registration not later than
4:00 p.m. on 4 October 2006. The interim dividend will be paid on or about
14 November 2006.
-12-
CHAIRMAN'S STATEMENT
A PROMISING BUT STUBBORN MARKET
The economic improvements that we have noted in recent reports continue to be
evident in the Asia-Pacific region. However, the persistent overcapacity
present in many markets across the region is still holding down transponder
rates and causing the satellite market to remain stubbornly flat. As a result,
despite an increase in demand in our business and a concerted effort to
capitalise on opportunities, little positive impact has come through in the
results for the first six months of 2006.
In these circumstances and with a view to the longer term, it is pleasing that
I am able to report that, following the 18% increase in our overall utilisation
rate during last year's difficult market, we achieved a further 4% increase in
the first half of 2006. This is an encouraging improvement amidst otherwise
unimpressive results.
AsiaSat, however, continues to attract and maintain an enviable blue-chip
customer base with long-term contracts; the Company is also debt free and has
no need to make any provisions for doubtful debts in the period under review.
Looking at the longer term, our confidence in a bright future for satellites in
the Asia Pacific is unchanged, as is our belief in AsiaSat's potential to
benefit from this in due course. For these reasons, we continue to focus on our
customers and on enhancing our products and services so as to further
consolidate our market leadership and be ready for the next growth phase. I
want to thank each member of management and staff for his and her dedication to
excellence in the current tough market.
Underlining our continued confidence in the future of the Group, in May this
year we announced the signing of the Construction Agreement to design and build
AsiaSat 5, and we also announced its Launch Contract. This new satellite, a
replacement for AsiaSat 2, is scheduled for launch in the second half of 2008.
INTERIM RESULTS
Turnover for the first half of 2006 was HK$475 million including a one-time
receipt of HK$46 million for early termination of a contract (2005: HK$445
million), an increase of HK$30 million. Excluding the one-time receipt,
recurring revenue was down by HK$16 million. The profit attributable to equity
holders was HK$239 million (2005: HK$185 million), up 29%. This increase was
due largely to the one-time receipt and to higher interest income.
Operating expenses in the first half of 2006, amounted to HK$99 million (2005:
HK$102 million), a decrease of HK$3 million mainly from lower satellite
in-orbit insurance.
The Group's EBITDA (earnings before interest, tax, depreciation and
amortisation) margin increased to 79% (2005: 77%) as a result of the one-time
receipt reported above.
During the period, the Group generated a net cash flow of HK$183 million (2005:
HK$96 million) after paying capital expenditure of HK$118 million and dividends
of HK$105 million. At 30 June 2006, the Group reported a cash balance of
HK$1,818 million (31 December 2005: HK$1,636 million). The Group continues to
-13-
be debt free, which positions us well financially to undertake our investment
programme and to pursue acquisition opportunities in the Region.
DIVIDEND
The Board has resolved to pay an interim dividend of HK$0.08 per share (2005:
HK$0.08), the same as last year. The interim dividend is payable on 14 November
2006 to equity holders on the share register as of 12 October 2006. The share
register will be closed from 5 to 12 October 2006, both days inclusive.
OPERATIONS REVIEW
NEW SATELLITE
AsiaSat's reputation for excellence has been built on providing our customers
with the combined benefits of the best facilities and service in the industry
today and on anticipating their needs for the future. To this end, in May, we
announced the commencement of construction of AsiaSat 5, a new satellite that
will replace AsiaSat 2 at the orbital location of 100.5oE. Shortly after, we
also confirmed that we had signed a contract with Sea Launch to position
AsiaSat 5 in orbit on a Land Launch rocket. This is scheduled to take place in
the second half of 2008 from the Baikonour Cosmodrome in Kazakhstan.
IN-ORBIT SATELLITES
During the first six months of 2006, the Group's fleet of three in-orbit
satellites, AsiaSat 2, AsiaSat 3S and AsiaSat 4, continued to deliver excellent
service.
The fleet is located over the Asian land mass and forms the platform for one of
the largest television viewerships in the world and provides AsiaSat customers
with unparalleled coverage of two-thirds of the world's population.
AsiaSat 2 was launched in November 1995 and orbits at 100.5oE. It carries 24
C-band and 9 Ku-band transponders, and its overall utilisation rate at 30 June
2006 was 42% (31 December 2005: 40%).
AsiaSat 3S was launched in March 1999 and is stationed at 105.5oE. This
satellite carries a payload of 28 C-band and 16 Ku-band transponders, and its
overall utilisation rate at 30 June 2006 was 72% (31 December 2005: 73%).
AsiaSat 4 was launched in April 2003 and is positioned at the 122.2oE slot
carrying 28 C-band and 20 Ku-band transponders, including four Hong Kong BSS
(broadcast satellite service) transponders. Its overall utilisation rate at 30
June 2006 was 52% (31 December 2005: 47%).
The total number of transponders on the Company's satellites leased and sold at
30 June 2006 increased to 70 (31 December 2005: 67), a 4% improvement,
representing an overall utilisation rate of 56% (31 December 2005: 54%). This
included the four BSS transponders provided for the DTH (direct-to-home)
service.
CONTRACTS WITH CUSTOMERS
In the first six months of 2006, we secured new contracts to the value of
HK$186 million (2005: HK$132 million) and renewed contracts to the extent of
HK$296 million (2005: HK$316 million) improving the total to HK$482 million
(2005: HK$448 million).
-14-
As of 30 June 2006, the Group held contracts worth HK$2,785 million (31
December 2005: HK$2,771 million), of which approximately HK$381 million will be
recognised in the second half of the current year. Despite the slow market, the
Company has been able to make a number of improvements and maintain its backlog
level.
MARKET REVIEW
Growth in Asia-Pacific markets continues to lag behind that seen in other
satellite markets around the world. This is because, on one hand, the excess in
transponder capacity that was built up in preceding years still has not been
fully taken up and, on the other hand, a slower introduction of new
applications in the region than has occurred in other parts of the world. Such
applications as High Definition Television (HDTV) are beginning to show growth
in other markets including North America, Europe and Japan. However, they have
yet to gather momentum in other parts of Asia.
Nevertheless, HDTV is seen as a key driver for growth in the next few years.
Another is video to mobile devices, which is showing great promise for
satellites in the future. Coupled with the increasing demand for television and
VSAT-delivered telecommunications services, these new applications will help to
push the industry forward in the coming years.
BUSINESS DEVELOPMENT
SUBSIDIARY
SKYWAVE
Our subsidiary, Skywave TV Limited ("Skywave"), is 80% held by the Company and
is engaged with its partners in establishing a low cost DTH (direct-to-home)
platform to serve the markets of Hong Kong, Macau, Taiwan and Southern China.
Skywave launched its services at the beginning of 2005 and currently offers a
variety of some 36 programmes branded under `family favourites', `premium
movies' and `premium sports'.
In the first half of this year, Skywave incurred a loss of HK$2 million (2005:
HK$3 million), of which our share was close to HK$2 million. This has been
reflected in the consolidated accounts.
ASSOCIATE COMPANIES
SPEEDCAST
Our associate, SpeedCast Holdings Limited ("SpeedCast") in which the Company
holds 47%, provides broadband, multimedia and corporate broadcast services to
customers in countries across Asia and beyond.
In the first six months of 2006, the company continued to improve its
performance in a highly competitive market having moved into profit in the
second half of 2005. The company also continued to grow and, in the 2006 period
under review, achieved a turnover of HK$51 million (2005: HK$38 million), an
increase of 34%, and a profit of HK$2 million (2005: loss of HK$1 million).
-15-
During the half year, AsiaSat generated HK$22 million as utilisation fees
(2005: HK$14 million) from SpeedCast by leasing capacity to the company.
BEIJING ASIA
In China, we are joint venture partners in Beijing Asia Sky Telecommunications
Limited ("Beijing Asia"), in which the Company holds a 49% stake. This company
is engaged in providing VSAT (very small aperture terminal) services in the
Mainland. Beijing Asia started business in the last quarter of 2004 and, for
the first six months of 2006, incurred a loss of HK$4 million (2005: HK$4
million), of which AsiaSat's share was HK$2 million (2005: HK$2 million).
NON-DOMESTIC TELEVISION PROGRAMME SERVICE LICENCE
The Company applied for, and was granted, another Non-domestic Television
Programme Service Licence in the first half of 2006. To broaden our business
scope, this licence, together with the Fixed Carrier Licence, will be used to
provide bundled services for customers who need both space segment and uplink
services from the Company.
DIRECTOR
Mr. Don Fullerton, who was an Independent Non-executive Director, the Chairman
of the Remuneration Committee and a member of the Audit Committee for the last
ten years, resigned on 30 May 2006. During these years, Mr. Fullerton has
travelled frequently from Toronto to Hong Kong to attend meetings, and his
contribution has been much appreciated. On behalf of AsiaSat and the Board, I
wish to express our deep appreciation for his commitment and dedication to the
Company. To fill the vacancy following Mr. Fullerton's departure, Mr. James
Watkins has agreed to join AsiaSat as an Independent Non-executive Director,
the Chairman of the Remuneration Committee and a member of the Audit Committee
with effect from 30 June 2006. Mr. Watkins qualified as a solicitor in 1969 and
was for 20 years a partner in a leading international English law firm and
specialised in the fields of corporate law, corporate finance, international
capital markets and international projects and project finance. From 1997 to
2003, he was an Executive Director and Group General Counsel in a listed
conglomerate. Mr. Watkins currently holds non-executive directorships in a
number of listed public companies and brings rich experience across a spectrum
of industries and businesses. We express a warm welcome to Mr. Watkins.
OUTLOOK
Despite some encouraging signs, there is little evidence emerging to indicate
that these will make significant changes to AsiaSat's results for the second
half of 2006. Thus, it is unlikely that the results for the full year will be
materially different from those of the prior year. However, the Group is in
excellent shape and is making solid progress wherever possible in the
development of our customer products and services, particularly with the
contracting of our new satellite. As the market leader in the region, we
recognise our role in setting the standards for quality and service and we
remain optimistic about future growth. We base this commitment on our belief in
the energies of the rapidly developing nations of the Asia Pacific and on the
huge benefits that satellites can bring to the disparate markets of the region.
AsiaSat's reputation for excellence and its market leadership position the
Company well for the future.
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ROMAIN BAUSCH
Chairman
Hong Kong, 24 August 2006
As at the date of this announcement, the Board comprises 13 directors. The
Executive Directors are Mr. Peter JACKSON and Mr. William WADE. The
Non-executive Directors are Mr. Romain BAUSCH (Chairman), Mr. MI Zeng Xin
(Deputy Chairman), Mr. Robert BEDNAREK, Ms. Cynthia DICKINS, Mr. DING Yu Cheng,
Mr. KO Fai Wong, Mr. JU Wei Min and Mr. Mark RIGOLLE. The Independent
Non-executive Directors are Professor Edward CHEN, Mr. Robert SZE and Mr. James
WATKINS.
Please also refer to the published version of this announcement in The Standard.
DISCLAIMER
THE FINANCIAL INFORMATION SET OUT ABOVE DOES NOT CONSTITUTE THE GROUP'S
STATUTORY FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED 30 JUNE 2006 AND 2005,
AND FOR THE YEAR ENDED 31 DECEMBER 2005, BUT IS DERIVED FROM THOSE FINANCIAL
STATEMENTS.
STATEMENTS IN THIS ANNOUNCEMENT RELATING TO MATTERS THAT ARE NOT HISTORICAL
FACTS ARE FORWARD-LOOKING STATEMENTS WITHIN THE MEANING OF THE U.S. PRIVATE
SECURITIES LITIGATION REFORM ACT OF 1995. THESE FORWARD-LOOKING STATEMENTS
INVOLVE RISKS, UNCERTAINTIES AND OTHER FACTORS, WHICH MAY CAUSE THE ACTUAL
RESULTS, PERFORMANCE OR ACHIEVEMENTS OF THE COMPANY TO BE MATERIALLY DIFFERENT
FROM THOSE EXPRESSED OR IMPLIED BY THE FORWARD-LOOKING STATEMENTS. THESE
FACTORS INCLUDE (1) RISKS ASSOCIATED WITH TECHNOLOGY INCLUDING DELAYED
LAUNCHES, LAUNCH FAILURES AND IN-ORBIT FAILURES, (2) REGULATORY RISKS, (3)
LITIGATION AND MARKET RISKS AND OTHER FACTORS, WHICH ARE DESCRIBED IN FURTHER
DETAIL IN THE COMPANY'S 2005 ANNUAL REPORT ON FORM 20-F ON FILE WITH THE U.S.
SECURITIES AND EXCHANGE COMMISSION.
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