Asian Pay Television Trust (APTT) has reported net loss after tax of $436.24 million, mainly driven by an impairment loss of $440.0 million, for FY2023 ended Dec 31, 2023.
Earnings before interest, tax, depreciation and amortisation (ebitda), however, was 7.3% lower y-o-y to a profit of $38.15 million.
Revenue, meanwhile, fell 5.8% y-o-y to $65.40 million in FY2023, while total operating expenses grew 3.6% y-o-y to $27.25 million.
APTT has an investment mandate to acquire controlling interests in and to own, operate and maintain mature, cash-generative pay-TV and broadband businesses in Taiwan, Hong Kong, Japan and Singapore.
In a Feb 29 announcement, management says the group conducted an annual impairment assessment for FY2023. Its external auditors worked with their internal valuation specialists to perform an independent review of the valuation methodology and assumptions like discount rate and terminal value used in the forecast cash flows based on the discounted cash flow model prepared by the Trustee-Manager for the purpose of the impairment assessment.
Given current exchange rates, elevated interest rates and the challenging business environment noted above, the recoverable amount of cable TV licences has reduced, and as a result, an impairment loss of $440 million was recorded by the group in the consolidated statement for FY2023.
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The Board of Directors of the Trustee-Manager has declared an ordinary distribution of 0.525 cents per unit for 2HFY2023, bringing total distributions for the year to 1.05 cents per unit.
The Board expects this to remain unchanged in 2024.
Brian McKinley, chief executive officer of the Trustee-Manager, says: “Our 2024 distribution guidance takes into account the elevated interest rates and a weaker NT$ against SGD. We are confident that at this distribution level, our strong cash flows can still support disciplined debt repayments and fund capital expenditure to future-proof our broadband business.”
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Cash and cash equivalents at the group level decreased from $118.9 million as at Dec 31, 2022 to $91.9 million as at Dec 31, 2023. The decrease was primarily due to the payment of distributions to unitholders, capital expenditure, interest payments and principal repayments during the year.
The Trustee-Manager will reserve approximately $65 million for scheduled principal repayments on its onshore and offshore borrowing facilities in the next 12 months.
APTT’s total outstanding debt comprises 92% onshore facilities and 8% offshore facilities. Approximately 90% of outstanding onshore facilities are hedged through to June 30, 2025, while the offshore facilities are not hedged. This means that approximately 83% of APTT’s total outstanding debt is protected against the risk of rising interest rates through to 2025.
While the Trustee-Manager does not expect growth in Basic cable TV subscriptions due to Taiwan’s saturated cable TV market, they expect the number of Premium digital cable TV and Broadband subscriptions to continue increasing in 2024.
Total revenue will, however, be influenced by the ability to maintain average revenue per user (ARPU), which will remain under pressure due to market dynamics, says management. “The decline in demand for home shopping and competition from internet retailing will continue to impact channel leasing revenue. The Trustee-Manager is managing every expense line item very closely. Total operating expenses in 2024 are expected to be in line with 2023.”
Units in Asian Pay Television Trust S7OU closed 0.1 cent lower, or 1.2% down, at 8.6 cents on Feb 29.
