Cost cuts help AsiaSat lift profit 11pc
Asia Satellite Telecommunications Holdings, part-owned by Citic Group, saw a 10.9 per cent growth in net profit last year, thanks to lower costs and higher interest income.
Net profit rose to HK$502.9 million from HK$453.4 million a year ago, despite a gain of just 1 per cent in sales to HK$939.3 million as operating expense fell 12.5 per cent to HK$182 million.
AsiaSat is cutting costs to offset weak demand as the market has been hit by a supply glut. The firm's overall utilisation was 49 per cent last year.
'At the end of the year, there was a decrease of 14 per cent in the number of transponders leased and sold,' chairman Mi Zengxin said. 'The drop primarily resulted from the migration of our China video customers to two new China satellites.'
Sales of the provision of satellite systems for broadcasting and telecommunications, which accounted for 98 per cent of total turnover, fell 1.3 per cent to HK$917.4 million from a year earlier.
'The construction of our new satellite, AsiaSat 5, which is to replace AsiaSat 2, is on schedule,' Mr Mi said, with expectations for its launch in the second quarter of next year.
The company will also develop AsiaSat 6 to replace AsiaSat 3 by 2014.
Earnings were also helped by the purchase of the 53 per cent stake in associate SpeedCast that it did not own for HK$49.2 million.
SpeedCast, which provides backbone broadband access, contributed sales of HK$38 million and a profit of HK$3.7 million to AsiaSat.
In April last year, AsiaSat said a joint buyout offer by United States-based GE Capital Equity Investments, a unit of General Electric, and Citic Group was blocked by the US State Department.
Analysts cited national security reasons over Citic's involvement.
In January, the company said it would voluntarily delist its American depositary receipts from the New York Stock Exchange and was considering an eventual deregistration under US law, if eligible.
AsiaSat's shares closed unchanged at HK$15 yesterday.