i-CABLE - CABLE i Communications Limited 2008 Interim Results 12 August 2008
Consolidated Results (HK$M) 1H08 1H07 %chg. Turnover 1,069 1,185 -10% Opex before dep'n (864) (884) -2% EBITDA 205 301 -32% Depreciation (165) (194) -15% Operating profit 40 107 -63% Net interest income 4 10 -61% Non-operating income 0 1 -72% Profit before taxation 44 119 -63% Taxation (18) (2) +660% Net profit 26 116 -78% Capex 68 71 -4% • A one-off non-cash adjustment ($15M) of the opening balance for deferred tax due to the lowering of corporate profits tax rate • Interim dividend cancelled to re-invest in competitiveness to strengthen market position 2
Subscribers June 2008 December 2007 June 2008 December 2007 280,000 306,000 153,000 159,000 892,000 882,000 Pay TV Broadband Voice • Bundling & creative packaging helped to reduce market share erosion 3
Pay TV (HK$M) 1H08 1H07 %chg. Turnover 699 827 -16% Opex before dep'n (537) (615) -13% EBITDA 161 213 -24% Depreciation (100) (113) -12% Operating profit 61 100 -39% EBITDA margin 23% 26% -3% Operating margin 9% 12% -3% • Mini packages drove penetration into mass market, maximizing the value of local content investment 4
Internet & Multimedia (HK$M) 1H08 1H07 %chg. Turnover 295 295 0% Opex before dep'n (140) (131) +7% EBITDA 154 164 -6% Depreciation (62) (78) -21% Operating profit 93 86 +8% EBITDA margin 52% 56% -4% Operating margin 31% 29% +2% • Profitability improved to fuel Pay TV development 5
Operating Expenses (HK$M) 1H08 1H07 %chg. Programming 413 492 -16% Network & Others 241 207 +17% S, G&A 210 186 +13% Sub-total 864 884 -2% Depreciation 165 194 -15% Total 1,029 1,077 -4% • Re-investing programming savings to strengthen programming, sales & marketing and customer experience 6
Viewership Viewership among CABLE TV 4+ subs 46% 47% 50% 38% 39% 45% 40% 35% 1H07 30% 1H08 25% 12% 20% 10% 5% 15% 4% 10% 5% 0% TVB Jade CABLE TV Other Terrestrial Other Pay TV Source: CSM Media Research • CABLE TV viewership continued to rise • Second only to free-to-air TVB Jade & 2.6 times of all other channels combined including competition’s 7
Locally Relevant Content News News • Established reputable brand in the market CABLE News & Finance Info CABLE News & Finance Info Viewership Share* Share* Viewership 12% 11% 11% 10% 10% 9% 9% 8% 8% 8% 7% 6% 5% 4% 1H06 2H06 1H07 2H07 1H08 Source: CSM Media Research * News, Finance Info & Channel 18 among CABLE Subs 4+ 8
Locally Relevant Content Entertainment Entertainment • Top Programmes Fung Shui Lecture of Master So � ( 峰生水起精讀班 ) Unbelievable ( 怪談 ) � Maria’s Private Kitchen ( 肥媽私房菜 ) � So Real Time Cooking � ( 一粒鐘真人蘇 ) • Established presence with our own singers in the music scene • Staged 2 concerts in Beijing
Locally Relevant Content Sports Sports • Exclusive rights of top international sports � 2008 Beijing Olympics (new media) � 2009-2012 UEFA Champions League � 2010 Vancouver Olympics � 2010 FIFA World Cup � 2010 & 2014 Asian Games � 2012 London Olympics 10
Service Enhancement • Integrated call centre instrumental to quality customer service • Same day on-site service • Opened 8 retail shops in prime locations • Service enhancement / locally relevant content improved churn Pay TV Churn Index 120 107 110 100 100 90 93 80 79 70 71 60 50 57 50 40 30 1H05 2H05 1H06 2H06 1H07 2H07 1H08
Cross Media Development • Newsline Express • New media • Publications • Mobile TV • Film • Video & programs sales 12
New Media Development Special unit to exploit new media opportunities Special unit to exploit new media opportunities • One of the initiatives to leverage content on cross-media platforms 2008 Beijing Olympics, a show case for 2012 Beijing Olympics, a show case for 2012 2008 London Olympics London Olympics 奧運 <http://2008.i-cable.com> 奧運 Anytime, Anywhere Election Platform Election Platform <http://election.i-cable.com> � One of the first in HK crossing over TV & new media 13
Sundream Motion Pictures Released Released • 13 titles with 16 awards • “A Battle of Wits” < 墨攻 > Top 4 among Chinese films in Taiwan < 跟 踨 > Best Editor, Best New Performer & • “Eye in the Sky” Best New Director awards • “Three Kingdom” < 三國 > Top 3 among Chinese films in HK In the pipeline In the pipeline • Lost Indulgence < 秘岸 > • Ticket < 車票 > < 奪標 > • Champions < 妙狗仁心 > • Love Dog Doc < 是日公映 > • Now Showing < 蕩寇 > • Plastic City • The Equation of Love & Death < 李米的猜想 >
Diversification Revenue Mix Revenue Mix Unallocated Revenue Trend Unallocated Revenue Trend 1H08 1H08 Unallocated 8% 1 0 0 9 0 8 0 7 0 6 0 HK$'m 5 0 4 0 3 0 I&M 27% 2 0 1 0 1 H 0 4 2 H 0 4 1 H 0 5 2 H 0 5 1 H 0 6 2 H 0 6 1 H 0 7 2 H 0 7 1 H 0 8 Pay TV 65% • Diversification expanded revenue stream • Built solid revenue outside Hong Kong & across platforms in TV, outdoor, mobile, film, music, Internet & print • Content distribution continued to make good progress in the mainland & overseas 15
Outlook • War of attrition is an opportunity given our lower cost base • Invest to enhance products and promotion • Streamline operationally • Invest in new encryption system to secure Pay TV revenue • Strengthen market position and market share 16
i- -CABLE Communications Limited CABLE Communications Limited i HKSE Stock Code: 1097.HK U.S. Over - The - Counter Symbol: ICABY Disclaimer All information and data are provided for information purposes only. All opinions included herein constitute i-CABLE’s judgment as of the date hereof and are subject to change without notice. i-CABLE and its subsidiaries and affiliates hereby disclaim (i) all express, implied, and statutory warranties of any kind to user and/or any third party including warranties as to accuracy, timeliness, completeness, or fitness for any particular purpose; and (ii) any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the information and data contained herein.
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