Announcement of Results For the Year Ended 31 December 1997
Chairman's Statement
APT Satellite Holdings Limited (the "Company") successfully launched its third satellite - APSTAR-IIR to the designated orbit stationed at 76.5 degree East on 17 October 1997. The 28 C-band and 16 Ku-band transponders on the satellite are in excellent condition as proved by the stringent and thorought in-orbit tests, and commercial operations commenced on 1 January 1998, generating a substantial amount of revenue and providing a solid base for the Company's growth in the coming years.
On behalf of the Board of Directors, I am pleased to present the audited results of the Company and its subsidiaries (the "Group") in respect of the financial year ended 31 December 1997.
On the whole, the Group performed satisfactorily. Turnover of the Group and net profit attributable to shareholders for the year ended 31 December 1997 were HK$522,467,000 and HK$129,581,000 respectively, an increase of 42.1% and 69.3% respectively over that in 1996.
Final Dividend
In line with the need of the Group's future development, the Board of Directors does not recommend the payment of any dividend in respect of the financial year 1997 (1996:Nil).
Review of Operations
APSTAR-I and APSTAR-IA, the Group's first two satellites, were approximately 90% leased during the year 1997. These two satellites have provided customers with high quality and reliable transponder services and generated a satisfactory amount of revenue for the Group. In the second half of 1997, despite the turmoil in Asian financial markets and the consequent economic slowdown, the leasing revenue derived from the Group's satellite transponders was not affected as the leases were concluded on a long-term basis and denominated in U.S. dollars.
APSTAR-IIR, the Group's third satellite, has provided customers with transponder services progressively and boosted the Group's profits since its commercial operation commenced on 1 January 1998. The operation of APSTAR-IIR increases the number of the Group's transponders from 48 to 92, the service band has expanded from C-band to Ku-band, and the footprint of the APSTAR System has stretched from the Asian region to more than 100 countries in Europe, Africa and Australia, covering 75% of the world's population. The service life of APSTAR-IIR will be up to the year 2013, which will contribute to long-term, steady and significant profits for the Group. Due to the adverse economic condition in the Asian region, together with a slowdown in the demand for satellite transponders, the growth in the leasing of APSTAR-IIR has been slower than expected. Nevertheless, the Group is confident that the leasing of APSTAR-IIR will gradually improve through diligent market effort and upgrading of services.
Maintaining a stable earnings base for steady expansion
Although the Asian economies have encountered uncertainties recently, the Group should be able to overcome the difficulties and challenges that lie ahead with its operating strength, the competitive edge of the APSTAR System and its sound financial position. The Group will continue developing new markets, expanding its market share and increasing utilization of satellite capacities while reinforcing its existing operations, so as to enable the Group to maintain stable business growth in the coming years.
Along with the gradual recovery of the Asian economies, the demand for satellite transponders will be back on its growth momentum and the leasing of APSTAR System will improve further. Meanwhile, the Group will continue discussions with PRC authorities and enterprises on the cooperation of satellites transponder business, including direct broadcasting satellite, for further market expansion as well as business exploration in order to strengthen the Group's position as the leading satellite transponder service provider in the Asian-Pacific region.
Appreciation
On behalf of all shareholders and the Board of Directors, I would like to thank all of our customers for their support of the Group, and to express our sincere appreciation to the management and staff for their contribution to the Group during the year and for their commitment for the future.
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Hong Kong, 28 April 1998
