AsiaSat Shrugs off Revenue Decline from Chinese Customers

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PARIS — Satellite fleet operator AsiaSat of Hong Kong on March 24 reported double-digit increases in revenue and profit for 2010 and said 2011 is shaping up to be another good year in the Asia-Pacific region.

AsiaSat, which operates four satellites in orbit including an aging satellite leased to Israel’s Spacecom, said its results improved across the board despite the fact that its business among Chinese customers dropped slightly compared to 2009.

China has begun a long-term effort to consolidate domestic business on China’s own telecommunications satellites.

At least in 2010, the decline in revenue from Chinese customers appeared to have little effect on AsiaSat. The company reported revenue of 1.46 billion Hong Kong dollars ($187.1 million), up 25 percent from 2009. EBITDA, or earnings before interest, taxes, depreciation and amortization, was 79 percent of revenue, compared with 72 percent in 2009.

The fill rate on the company’s spacecraft, excluding the former AsiaSat 2, renamed Amos-5i for Spacecom, stood at 73 percent at Dec. 31, compared with 65 percent a year earlier. The company’s contract backlog was about 3.5 billion Hong Kong dollars at the end of the year.

Much of the increase in fill rate, and in revenue, was due to the near-sellout of Ku-band transponders aboard the AsiaSat 5 satellite located at 100.5 degrees east. Launched in mid-2009 with 26 C-band and 14 Ku-band transponders, AsiaSat 5’s overall fill rate was 54 percent at the end of 2009. It had risen to 79 percent by the end of 2010. While C-band utilization on the satellite had dipped, the fill rate of its Ku-band transponders, which had been just 16 percent in late 2009, was 96 percent a year later.

In terms of fill rate, AsiaSat 5 has now surpassed AsiaSat 3S and AsiaSat 4, which at the end of 2010 were 72 percent and 69 percent booked, respectively, according to an AsiaSat presentation to investors.

AsiaSat 7, now under construction by Space Systems/Loral of Palo Alto, Calif., is scheduled for launch in late 2011. It will replace AsiaSat 3S at 105.5 degrees east.

In its statement to the Hong Kong Stock Exchange, AsiaSat said it continues to wrestle with Indian tax authorities over whether AsiaSat owes some 10 years in back taxes. The company said it made an advance payment of part of the sum Indian tax authorities say is due pending a judicial review in India. Early decisions from Indian courts appear to back AsiaSat’s claim that the tax levy was incorrectly assessed.

AsiaSat’s Dish-HD Asia Satellite joint venture with EchoStar of the United States, which provides high-definition and enhanced standard-definition television in Taiwan, now beams 40 channels to that market. Having just started in June, it is not yet profitable, incurring a loss of 83 million Hong Kong dollars in 2010.

AsiaSat Chairman Peter Jackson, who left his job as chief executive in July and was replaced by then-Deputy Chief Executive William Wade, said AsiaSat is generating regular cash flows, is debt-free and is “well-placed to seize any opportunities that may arise” for expanding its business.

“It would appear that AsiaSat’s markets in the Asia-Pacific region generally have stabilized and are now making good progress,” Jackson said in a March 24 statement. “We renewed most of our existing major customer contracts that were due to expire and attracted a number of excellent new customers.”

 

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