AsiaSat warns of major profit shortfall
WASHINGTON — Hong Kong-based satellite fleet operator AsiaSat warned investors that it is expecting a 28 percent drop in profit for the first half of 2017 due to a trio of losses on top of steep competition in a highly competitive regional market.
In a statement to the Hong Kong stock exchange July 17, AsiaSat said it has not completed its interim results for the first six months of 2017, which it expects to deliver in August, but that the operator’s preliminary assessment of its unaudited financial information projects a significant loss.
AsiaSat reported a net profit of 249 million Hong Kong dollars ($32.1 million) for the six months ended June 30, 2016, roughly equal with 2015 thanks to a one-time HK$41 million tax credit. The absence of that credit, combined with an HK$11 million decrease in “interest being capitalised as cost of qualifying assets,” and an HK$16 million exchange loss are causing the predicted profitability loss.
A 28 percent loss off of last year’s interim profit puts the first six months of 2017 ended June 30 at HK$179 million.
AsiaSat said in March that despite regional oversupply from more than a dozen competitors — both neighbors and continents away — that the high gross domestic product growth of several Asian economies anchors the operator’s long-term optimism. Were it not for the one-off tax provision, AsiaSat estimates its 2017 half-year profit would be approximately 14 percent behind the first half of 2016.
AsiaSat said July 12 that the company is refinancing $220 million of a $240 million term loan and revolving credit facilities from June 2015. The company said the refinancing is for a term of five years “from the initial drawdown date of the Refinancing Facilities.”
AsiaSat said if another entity should gain direct or indirect control of the company, then the refinancing facilities would be cancelled immediately and all outstanding amounts under the refinancing facilities would be due and payable immediately. Bowenvale Limited is AsiaSat’s controlling shareholder, owning roughly 74.43 percent of the operator’s issued share capital.