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Asian Pay TV Trust’s Q2 net profit down 32.5% on higher costs

MAINBOARD-LISTED Asian Pay TV Trust recorded a 32.5 per cent drop in net profit to S$4.74 million for Q2 FY2020 ended June, amid an increase in operating costs and stiff pricing competition.

The firm has declared an ordinary interim distribution of 0.25 cents per unit, down from 0.30 cents a year ago. The quarterly distribution is expected to remain at 0.25 cents per unit for the rest of 2020.

Revenue for the quarter inched up 4.8 per cent to S$75.5 million, but the trust saw revenue challenges in each of its individual segments: basic cable TV, premium digital cable TV and broadband.

In constant NTD (National Taiwan Dollar) terms, basic cable TV revenue for the quarter decreased by 3.5 per cent. The number of Revenue Generating Units (RGUs) - or service subscribers - fell by about 4,000 due to video piracy, competition from aggressively priced IPTV and the growing popularity of online video.

There were also expectations from consumers for discounts. This was especially as they looked to lower cable TV pricing outside Taiwan Broadband Communications’ franchise areas, particularly in Taipei.

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Meanwhile, in constant NTD, premium digital cable TV revenue for the quarter decreased by 4.4 per cent even though RGUs increased. ARPU (average revenue per user) had fallen due to promotions and discounted bundled packages, as well as video piracy and price competition from IPTV.

Broadband revenue showed more resilience, dipping 0.6 per cent in Q2 in constant NTD terms. Contributions were driven by demand for high-speed broadband services. But price competition is stiff, as low-cost unlimited data offerings from mobile operators is necessitating fixed-line operators to offer higher speeds at competitive prices.

For H1, APTT posted a 25.3 per cent fall in net profit to S$10.77 million, on the back of a 6.6 per cent increase in revenue to S$155 million.

Looking ahead, APTT sees its broadband segment playing “a key role in unlocking the potential of TBC’s data backhaul service, which is expected to be a key component of the broadband business within the next few years”, the firm said.

Brian McKinley, chief executive of APTT’s manager, added: “As a proof-of-concept, TBC is providing data backhaul for 4G networks to a number of wireless operators who prefer tapping into our superior network, rather than the main telco who is also competing with them in the wireless space.”

APTT is also focused on paring down its debt. It used net proceeds of S$45 million from a rights issue earlier this year to reduce 20 per cent of outstanding offshore facilities, which translates to annual interest cost savings of S$2.9 million.

Units of APTT closed at S$0.129 on Friday, down 0.77 per cent.

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