FOR IMMEDIATE RELEASE
2 September, 1999
APT Satellite Announces Interim Earnings
Improving Outlook for Transponder Leasing Business
With Expansion Into Other Satellite-Related Services
HONG KONG--APT Satellite Holdings Limited ("APT", stock code: 1045 or ATS), a Hong Kong-based satellite service provider, today announced the unaudited interim results of the Company and its subsidiaries (the "Group") for the six months ended 30th June, 1999. The Group's turnover and consolidated net profit attributable to shareholders amounted to HK$265,244,000 and HK$23,353,000 respectively, representing decreases of 10% and 33% over the corresponding period in 1998. Earnings per share was HK 5.6 cents.
The market environment remained difficult during the first six months of 1999 and, despite shrinking satellite
transponder supply in the Asia-Pacific region, sluggish economic situation across Asia had resulted in slow demand
growth.
During the period, APT's transponder leasing business was steady with a strong
customer base maintained. Utilization rates of the Group's first two satellites,
APSTAR-I and APSTAR-IA, remained at approximately 65%. Significant improvement in the take-up rate of APSTAR-IIR
was achieved, as the Group entered into a lease agreement (the “Lease")
on 18th August, 1999 with a wholly-owned subsidiary of Loral Space & Communications Limited.
Upon the completion of the Lease agreement, the Group will lease substantially all of APSTAR-IIR’s transponders to Loral for the remaining life of the satellite. With a total lease income
of US$304 million, to be received over the next four years, the Group will be able to re-allocate its efforts and
capital resources in developing new satellites and other satellite-related businesses.
APT's Chairman Mr Liu Ji Yuan commented: "To
strive for a better earnings mix, the Group has successfully expanded its business scope over the past nine months
into operations that maximize synergies with its transponder leasing business and are capable of broadening the
source of revenues at the same time.
"With its sound financial position, APT is now operating several satellite-related
businesses, including the VSAT business in the People’s Republic of China (PRC)
and the Satellite Television Uplink and Downlink Licence granted by the Government of Hong Kong Special Administrative
Region on 6th July, 1999,¡¨ he said.
In late 1998, APT has set up a joint venture with China Telecom (HK) International Access Limited. to explore the
VSAT business in the PRC. The growth of VSAT business is expected to generate further demand for the Group's transponders by developing additional VSAT satellite networks.
The Satellite Television Uplink and Downlink Licence will also enhance APT's
competitiveness by making it as the only Hong Kong-based satellite company offering integrated services on the
transmission of television programs. Under the Licence, APT will invest and install one Ku-band uplink platform
and a satellite receiving downlink system to provide the services via the APSTAR-IIR satellite.
¡@
With a term of 12 years, the Licence marks a major breakthrough in the Group's business scope. The Group believes that the Licence will match with the growing demand for the uplink and downlink services in the region and contribute positively to the Group's earnings. A number of the Group's customers have already expressed their interests in the services, which is expected to be launched officially in the last quarter of 1999.
Nevertheless, sluggish economic conditions in Asia are expected to continue for some time. Although there have
been signs that Asian economies have bottomed out and recovery is in sight to bring about steady demand growth
for satellite services, the Group is likely to continue facing challenges and having difficulties in expanding
its customer base during the remaining period of 1999. Cancellations and delays in several transponder launches
in the region earlier this year, however, are likely to lead to a more balanced environment in the transponder
demand and supply and, in turn, more stable lease prices.
¡@
The Group is also actively discussing with certain potential customers for the satellite applications in Internet network services, a new application with great business potential in the region. Moving towards the next century, the number of Internet users are expected to increase dramatically and Internet service providers are now looking for a cost-effective solution such as those based on satellite technology to provide Internet network services.
With the funding from the Lease of APSTAR-IIR, the Group will continue to develop the new businesses as well as
other planned satellite projects. The Group has scheduled to develop APSTAR-III, APSTAR-IV (the Direct Broadcasting
Satellites), as well as APSTAR-V, the high-power satellite which will replace APSTAR-I that is set to expire in
2004.
The re-formulation of the Group's business strategies is aimed at providing
better quality and more comprehensive services to customers. Ultimately, the new operations will form part of the
Group's strategy to offer customers a "one-stop"
telecommunication solution. After operating for nearly a decade, the Group remains committed to the satellite business
which is expected to grow in a competitive and healthy environment in the long run. Having riden out the regional
financial turmoil with its solid foundation, the Group is confident that it will capture the many market opportunities
arising from the new information age.
~O~
Released by:
APT Satellite Holdings Limited
Contact: Brian Lo (Tel: 2918 8013 Fax: 2918 9797 Email: aptir@apstar.com)
Through:
Keith Statham Associates PR
Tel: 2810 8108 Fax: 2868 4116
Contact:
Dorothy Lee (Tel: 2801 0037, Email: dorothy@ksa.com.hk)
Daisy Wong (Tel: 2801 0036, Email: daisyw@ksa.com.hk)
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