Pay-television operator i-Cable Communications reported its second full-year net profit of HK$167.49 million yesterday, with the market upbeat after its first dividend payout. Although the result was below market expectations, investors helped lift the stock 4.87 per cent as the cash-rich company surprised the market by paying out a final dividend of 2.5 HK cents, representing a cash outlay of HK$50 million. The company, controlled by conglomerate Wharf Holdings, reported a net profit of HK$20.16 million in 2000 after seven years of service. I-Cable dominates the local pay-television market with 30 per cent penetration and more than 560,000 users at the end of last year. Its position has remained intact despite the Government's move to liberalise the sector. Last year, earnings before interest, tax, depreciation and amortisation (ebitda) surged 39 per cent to HK$614 million on an increase of 17 per cent in turnover to HK$1.93 billion. Earnings per share were 8.3 HK cents. Turnover from pay-television operations increased marginally by 4 per cent to HK$1.59 billion, but operating profit from the sector jumped 66 per cent to HK$349.32 million. Its pay-television services were weighed down by rampant pirate viewing to show growth of only 8 per cent. The average revenue per user (arpu) fell 7 per cent to HK$232 per month. Chairman and chief executive Stephen Ng Tin-hoi said there were some signs of improvement in the pay-television take-up rate in the last quarter as the black boxes would become obsolete under a digital roll-out this year. 'But I expect the arpu would remain flat [this year] as it takes some time to shift the [downward] trend,' he said. Revenue generated from Internet services, which accounted for 17 per cent of the total, tripled to HK$335.63 million. There was robust growth in broadband subscribers to 160,000, paying a stable arpu package of HK$224. The Internet unit reported a net loss of HK$50 million. But Mr Ng said the broadband business reached positive cash flow, as well as profitability, in the last quarter. The unit netted HK$1 million in the second half on an ebitda of HK$80 million.
