Mainland-backed APT Satellite Holdings is to continue with expansion plans despite a sharp earnings decline in the year to December 31. It has set aside HK$840 million for capital expenditure this year, and yesterday said it would make a stronger push into the region's thriving satellite and telecommunications market. Last year's net profit slumped 61.82 per cent, year on year, to HK$142.99 million. The group's results were distorted by a one-off gain, a contract with Skynet of the United States. Turnover sank 29.14 per cent from a year earlier, to HK$341.49 million. Earnings per share were down 61.58 per cent to 34.26 HK cents. The final dividend of 15 HK cents made the full-year dividend 20 HK cents. President and executive director Chen Zhaobin, who took over the APT helm two months ago, said a major investment was the development of satellite Apstar V that would replace the ageing Apstar I. Development of the broadcasting and telecommunication satellite required HK$670 million this year, with a total cost of about HK$1.79 billion spanning the next three years, he said. ''This is a milestone for the group and is the largest project the group has ever undertaken,'' he said. The new satellite is due to launch in February 2003. Vice-president Leng Yishun said APT had begun building a 180,000 square foot telepark next to its existing service centre in Tai Po. Telepark, which requires HK$87 million expenditure this year or a total HK$400 million in the next three to four years, will provide services of corporate data centre, Internet data centre, broadband and Internet Protocol. ''We've strong resources up in the sky and under the sea, we need a land port to link them up,'' said Mr Leng referring to the group's satellite services and its undersea fibre-optic cables. Another HK$80 million will be ploughed in to the development of cable and satellite-based telecom services via APT Satellite Telecommunications, a joint-venture between APT and Singapore Telecommunications. Funding of the investments would be done with internal resources and bank loans, Mr Leng said, adding that the group was sitting on a war chest of HK$1.7 billion. Last year, about 77 per cent of the group's turnover came from China. However, Mr Chen would not say whether the group had conducted the business using any special licences considering the mainland satellite telecommunications sector is confined to the monopoly ChinaSat. ''We have licences in Hong Kong, but so far, we have met no legal obstacles in providing transponder services in China,'' Mr Chen said. ChinaSat holds 16 per cent of APT. Mr Chen said ChinaSat had no intention at present to raise its stake.