PARIS — Satellite fleet operator AsiaSat reported Aug. 23 flat revenue for the first six months of 2012 compared with the same period a year ago after removing an unusual one-time revenue gain and said it was evaluating how to use its new AsiaSat 7 satellite for the two-year period before it replaces the aging AsiaSat 3S in 2014.
The company reported an increase in profit attributed to its disposal in December of a money-losing joint venture it owned with satellite-television broadcaster Dish Network of the United States.
Hong Kong-based AsiaSat, which is majority-owned by General Electric Co. of the United States and China’s government-owned CITIC Ltd. investment group, said it foresees no business repercussions from its failure to privatize itself in July.
Shareholders owning 75 percent of AsiaSat had backed a removal of the company from the Hong Kong Stock Exchange. But only independent shareholders unassociated with GE or with CITIC were allowed to vote, and an overwhelming percentage of them rejected the proposal.
It was the second time in five years that GE and CITIC had made the attempt.
For the six months ending June 30, AsiaSat reported revenue of nearly 1.1 billion Hong Kong dollars ($141.1 million), a 37 percent increase from the same period a year ago.
But the top-line figure includes a one-time payment of 296 million Hong Kong dollars from customers affected by a new finance law enacted in India, where AsiaSat sells satellite bandwidth.
The new Indian Finance Act, which was approved by India’s parliament in May, adds what could be a substantial new tax on foreign satellite-fleet operators for certain commercial transactions deemed to be sourced in India.
In an Aug. 23 statement accompanying the financial results, AsiaSat Chairman Ju Wei Min said it is too early to assess the amount of tax AsiaSat may owe under the new law. AsiaSat nonetheless said it had booked a reserve of 382 million Hong Kong dollars for potential future tax assessments in India.
AsiaSat is one of several non-Indian satellite-fleet operators that are affected by the new finance law.
The 130-member Cable and Satellite Broadcasting Association of Asia in April wrote to India’s Finance Ministry protesting certain features of the new law.
Stripping out the one-time revenue booking related to the Indian tax issue, AsiaSat’s revenue was flat compared with last year. Ju said this is not a bad result given the economic turmoil in the United States and Europe. Ju said he is cautious about performance in the second half of 2012, when Asia may feel a delayed reaction to the slowed U.S. and European economies.
AsiaSat operates four satellites in geostationary orbit following the recent retirement of the AsiaSat 2 spacecraft. AsiaSat 7, the company’s newest fleet addition, entered service in January but will not be needed to replace the AsiaSat 3S until 2014.
For AsiaSat, the question is whether a temporary role may be found for the satellite while it waits for AsiaSat 3S to be taken out of service. Several satellite operators around the world are known to be looking for satellites that could inhabit a given orbital slot for 90 days — long enough to register the slot as being “in use” under current international regulatory rules — before being moved elsewhere.
AsiaSat has two satellites under construction, both by Space Systems/Loral of Palo Alto, Calif., and both scheduled for launch in 2014 aboard Falcon 9 rockets operated by Space Exploration Technologies Corp. (SpaceX) of Hawthorne, Calif.
AsiaSat has signed a contract with International Launch Services of Reston, Va., for a launch of one of these two satellites in the event a SpaceX launch is delayed, or for a future satellite if SpaceX keeps to the planned launch dates.
One of the two satellites under construction at Space Systems/Loral, AsiaSat 6, will be operated at 120 degrees west in geostationary orbit, with its 28 C-band transponders divided between AsiaSat and Thai satellite operator Thaicom.
Thaicom has agreed to pay AsiaSat $171 million over 15 years for the capacity. The deal with AsiaSat has permitted Thailand and Thaicom to retain their rights to the 120-degree slot by occupying the position before Thailand’s rights to it expire.
While its recurring revenue was flat for the six months ending June 30, AsiaSat reported that its profit increased by 8 percent, to 395 million Hong Kong dollars.
The increase is mainly due to the fact that AsiaSat reported a large loss on its Dish-HD Asia Satellite joint venture. The business was disposed of in December 2011 and sold in June.
