AsiaSat Reports Sharply Higher Profit in First Half
JACKSONVILLE, Fla. — Satellite fleet operator AsiaSat on Aug. 18 reported double-digit increases in revenue and operating profit for the first six months of 2011, saying its core Asian market segments are all in good health and likely to continue growing.
Revenue grew 16 percent, to 801.9 million Hong Kong dollars ($103 million) compared with the same six-month period a year ago. Operating profit, at 482.5 million Hong Kong dollars, was up 30 percent from a year ago.
AsiaSat’s three satellites, located at three orbital slots over Asia, were 80 percent full as of June 30, compared with 73 percent full a year ago. AsiaSat’s incoming chairman, Sherwood P. Dodge, said the company’s near-term prospects are good and the AsiaSat 7 satellite, under construction byof Palo Alto, Calif., is on track for launch aboard an Proton rocket late this year.
AsiaSat 7 ultimately will replace the AsiaSat 3S satellite now in orbit.
As of June 30, AsiaSat said it had sold or leased 105 transponders on its fleet, up from 97 as of Dec. 31.
The company’s wholly owned VSAT, or very small aperture satellite, network operator, SpeedCast Holdings, grew its revenue by 24 percent during the first six months of 2011 compared with a year ago, to 118 million Hong Kong dollars.
SpeedCast provides VSAT links to oil and gas companies, maritime vessels and banking and other corporate networks, mainly in Asia.
Hong Kong-based AsiaSat said the lone problem in its business is a joint venture with EchoStar Corp. of Englewood, Colo., to provide high-definition television to Taiwan and the surrounding region.
The Dish-HD Asia Satellite venture, which began operation in June 2010, reported another loss for the first six months of 2011. AsiaSat’s share of the loss was 57 million Hong Kong dollars.
In addition to the loss, AsiaSat took an impairment charge of 23.4 million Hong Kong dollars after writing down the value of its Dish-HD assets. In his statement accompanying AsiaSat’s financial results, Dodge was not optimistic about a near-term turnaround for the Dish-HD business.
“The joint venture has underperformed and new measures have been taken to improve its performance,” Dodge said in his statement, adding that AsiaSat “is considering all options” as it monitors the venture’s performance in the coming months. Dodge replaced retiring AsiaSat Chairman Peter Jackson Aug. 1.
As it mulls what to do with the EchoStar partnership, AsiaSat is taking a fresh interest in acquisition possibilities in Asia, where some 20 satellite operators vie for business. Measat of Malaysia is one competitor that is considering whether to sell its satellites to concentrate on its satellite television business, industry officials said.
AsiaSat has little overlap with Measat and might be a logical buyer of the Measat spacecraft, but industry officials saidof Paris, of Luxembourg and perhaps other companies are also interested in the Measat satellites.
AsiaSat had cash and equivalents amounting to 2.4 billion Hong Kong dollars as of June 30, marginally up from its cash position at Dec. 31. The company has no debt.
As is the case with other companies taking advantage of exploding demand for satellite television in India, AsiaSat is in a long-running dispute with Indian tax authorities about an alleged tax liability whose validity AsiaSat is contesting. The company has won favorable rulings in an Indian court but the appeals process means the issue likely will be resolved only with a ruling by the Supreme Court of India, AsiaSat said.