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Phoenix Satellite TV
For immediate release 11 May 2005
PHOENIX SATELLITE TV ANNOUNCES
FIRST QUARTER RESULTS FOR 2005 FINANCIAL YEAR
The Chairman and Chief Executive Officer of Phoenix Satellite Television, Mr. Liu Changle, said today that he was delighted to announce the results for the Phoenix Group in the first quarter of the 2005 financial year. He said that the results for this quarter demonstrated that the performance underlying the Group¡¯s dramatic turn-around last year has continued into this year. Liu Changle said that the key points emerging from the Group¡¯s performance are as follows:
- Revenue for the first quarter increased to approximately HK$299,029,000, which represented a 5.1% rise over the same period last year.
- The revenue of Phoenix Chinese Channel increased 3.0%, which was partly off-set by a decline in InfoNews¡¯ revenue of 17.2%.
- The profit attributable to equity holders of the Company was approximately HK$41,055,000, which represented a marginal increase of 1.4% as compared to the same period last year.
During the first quarter of 2005 the Phoenix Group maintained the unprecedented performance that it achieved last year, when it produced a surge in revenue which enabled Phoenix to generate a sizeable profit after three years of loss-making. The revenue for this first quarter was only marginally higher than the same quarter last year, but given that last year¡¯s income marked a major turn-around in the company¡¯s fortunes this marginal increase demonstrated the on-going effectiveness of the new advertising-sales system introduced last year, and the widely recognized popularity of Phoenix programming.
FINANCIAL REVIEW
Liu Changle said that the Group¡¯s revenue for the three months ended 31 March 2005 remained at last year¡¯s impressive level, amounting to approximately HK$299,029,000. This represented an increase of 5.1%, over the same period last year. Advertising revenue, which represented 90.8% of the Group¡¯s total revenue, increased by approximately 1.2%. Operating costs increased modestly by 4.8% over the same period last year to approximately HK$258,391,000.
The Group¡¯s profit before taxation for the three months ended 31 March 2005 was approximately HK$49,514,000, which showed an encouraging increase of 14.5% over same period last year. But as most of the Group¡¯s accumulated tax losses had been utilized last year, the tax burden for this quarter partly offset the growth in revenue. Profit attributable to equity holders of the Company was approximately HK$41,055,000, which represented an increase of 1.4% over the same period last year.
The Group¡¯s results for this quarter and the same period last year respectively are summarized below:
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Three months ended 31 March |
|
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2005 |
|
2004 |
|
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HK$¡¯000 |
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HK$¡¯000 |
|
Phoenix Chinese Channel |
229,306 |
|
222,732 |
|
Phoenix InfoNews Channel |
37,081 |
|
44,757 |
|
Phoenix Movies Channel, Phoenix North America
Chinese Channel & Phoenix Chinese News and
Entertainment Channel |
14,774 |
|
11,590 |
|
Other businesses |
17,868 |
|
5,499 |
|
Group¡¯s total revenue |
299,029 |
|
284,578 |
|
Operating costs |
(258,391) |
|
(246,629) |
|
Profit from operations |
40,638 |
|
37,949 |
|
Profit before taxation |
49,514 |
|
43,245 |
|
Profit attributable to equity holders of the Company |
41,055 |
|
40,475 |
|
Earnings per share, Hong Kong cents |
0.83 |
|
0.82 |
Phoenix Chinese Channel remained by far the most important source of revenue for the Group, accounting for 76.7% of the Group¡¯s total revenue. The Chinese Channel¡¯s revenue increased by 3.0% as compared to the same period last year, and its operating profit increased to approximately HK$96,185,000, or by 10.9%.
The performance of Phoenix InfoNews Channel was less satisfactory. Revenue decreased by 17.2% to approximately HK$37,081,000, while operating costs increased marginally. Operating loss was thereby widened to approximately HK$10,181,000. The decline in InfoNews¡¯ revenue essentially flowed from the decrease in bundling sales, which occurred as a result of some advertisers resisting the requirement imposed by Phoenix to place their advertisement on both Phoenix Chinese Channel and Phoenix InfoNews Channel at a pre-determined mix. A further factor seems to be that because certain new programmes will only begin to be broadcast on InfoNews during the second quarter of this year some advertisers have held back on the placement of advertising in order to be able to assess the likely success of such new programming. The use of this bundling sales strategy is a natural means of enhancing InfoNews¡¯ income while it is in a developmental stage, and the management is continuing to review the extent to which it should pursue this strategy in the future. The management is also planning to strengthen InfoNews¡¯ programming in order to respond to the market¡¯s need.
The cumulative revenues of Phoenix Movies Channel, Phoenix North America Chinese Channel and Phoenix Chinese News and Entertainment Channel, increased to approximately HK$14,774,000. Due to increases in operating costs and provision for doubtful debt, however, operating loss increased to approximately HK$20,447,000. Performance of both the magazine and internet businesses showed gradual improvement.
BUSINESS OVERVIEW AND PROSPECTS
Phoenix Chinese Channel, which remains the key element of the Group¡¯s business, has continued to be one of the most innovative and popular television channels available to the Chinese audience. While new broadcasters are entering the Chinese television market, and competition for viewers is increasing, the Chinese Channel has maintained its leading position by striving to produce or acquire new entertainment and informative programmes that cater to the tastes of the Chinese-speaking audience in mainland China and beyond, providing the audience with a balanced menu of entertainment and information.
Phoenix InfoNews has consistently followed major world developments, including the devastating tsunami in South and Southeast Asia, the continuing political violence in Iraq and the kidnapping of a group of Chinese labourers in Iraq, and the assassination of the former Lebanon premier Hariri. Phoenix also covered major developments in cross-Strait relations, such as the visit to China by Chiang Bing-kun, the vice chairman of the KMT, the meeting between Taiwan President Chen Shui-bian and the leader of the People¡¯s First Party James Soong, and the operation of direct charter flights between mainland China and Taiwan during the Chinese New Year period. InfoNews has had major carriage of the task of reporting news and economic information, and it continues to make a major contribution to the Phoenix brand name, underscoring Phoenix¡¯s reputation for a global outlook and real-time information.
This quarter¡¯s results confirm that the Group¡¯s performance over the last year was not a one-off achievement and demonstrate that the factors that led to the dramatic turn around in Phoenix¡¯s performance last year, namely the popularity of Phoenix programming and the effectiveness of the new advertising marketing system, have continued to shape Phoenix¡¯s performance and can be expected to do so for the remainder of 2005. The Chinese economy remains buoyant, and should continue to be the source of a steady stream of advertising revenue. At the same time Phoenix is exploring outlets for its content in order to ensure that the effort it invests in producing new and fresh programming generates the maximum financial returns possible.
- End -
ABOUT PHOENIX
Phoenix Chinese Channel was launched on 31 March, 1996, with the aim of offering quality content to Chinese communities around the world. The dynamism of this massive market, combined with successful expansion strategies, has allowed Phoenix to develop a comprehensive multi-channel platform. Today, Phoenix Chinese, Phoenix Movies, Phoenix InfoNews, Phoenix Chinese News and Entertainment and Phoenix North America Chinese channels together broadcast to audiences in the Asia Pacific, as well as in Europe, North America and North Africa, covering more than 100 countries and regions. The mission of the group is to offer varied, high-quality content to the global Chinese population.
Phoenix Satellite Television Holdings Limited was listed on the SEHK Growth Enterprise Market (GEM) on 30 June 2000.
Further information about Phoenix Satellite Television Holdings Limited can be found at www.phoenixtv.com and www.hkgem.com
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