Television services provider Asian Pay TV Trust (APTT) declared a distribution per unit (DPU) of 0.25 cents for 2Q20 ended June due to the larger number of units following the completion of its 1-for-4 renounceable non-underwritten Rights Issue.
The quarter’s DPU was down from the DPU of 0.30 cents disbursed a year ago.
APTT said in its results released on Aug 7 that it expects quarterly distribution to remain at 0.25 cents per unit until the end of 2020, subject to no material changes in planning assumptions.
Net profit for the quarter plunged 32.1% to $4.82 million from the $7.09 million logged a year ago.
This follows an increase in operating costs and stiff competition in prices.
Revenue for the quarter inched up 4.8% y-o-y to $75.6 million, following an increase of 6,000 users to its Premium digital cable TV platform and 4,000 Broadband subscribers. Excluding a dip in basic cable TV users, total subscriptions increased between 6,000 and 1.2 million.
Segmentally, takings from its basic cable TV business was up 4.3% to $59.6 million. The Premium digital cable TV segment increased by 3.4% to $3.3 million, while income from Broadband surged 7.2% to $12.7 million.
However, the trust faced challenges in the revenue recorded in constant NTD (National Taiwan Dollar) terms. Under this, total revenue was down 3.0% for 2Q20
Takings from its basic cable TV business was down 3.5% in NT$. The number of Revenue Generating Units (RGUs), or service subscribers, dipped by 4,000 following video piracy, competition for aggressively priced IPTV and growing popularity of online videos.
Meanwhile, the premium digital cable TV segment dipped 4.4% in constant NT$, as the average revenue per user dipped from the promotions and discounted bundled packages.
Broadband showed more resilience, dipping 0.6% in 2Q2020, despite a RGUs increasing to 246,000 thanks to unlimited wireless data offerings from mobile operators. However, income was hit by the low broadband chum rates which averaged around 0.8% in the second quarter.
In this time, operating expenses surged 11.9% y-o-y to $30.9 million, following higher broadcast and production costs. APTT attributes this to the timing in which programming fees were recorded in 2019.
Overall, APTT’s net profit came in at $10.9 million in 1H20 ended June, down 25% from the $14.7 million registered in 1H19.
Revenue for the six-month period surged 6.6% y-o-y to $154.9 million following a stronger performance of Basic cable TV, Premium digital cable TV and Broadband. Takings grew 0.4% y-o-y in NT$ during the first half of the year.
The trust’s cash and cash equivalents stood at $89.2 million at end June, up from the $79.1 million held a year before.
Going forward, the trust expects its broadband segment to play “a key role in unlocking the potential of Taiwan Broadband Communication (TBC) group’s data backhaul service, which is expected to be a key component of the Broadband business within the next few years,” it states in its August 7 results filing.
“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,” adds CEO of its Trustee-Manager Brian McKinley.
Additionally, APTT is looking to pare down its debt for a stronger balance sheet to navigate the uncertain economic climate.
So far, it has used net proceeds of the $45.0 million from its Rights Issue to pare down 20% of its outstanding offshore facilities. This translates to annual interest cost savings of some $2.9 million.
“The level of capital expenditure, which is trending down compared to previous years, will be closely monitored to focus on areas that will have the best potential in generating growth and sustainability for the long-term,” Mckinley asserts.
Units of APTT closed 0.1 cents lower or 0.77% down to 12.9 cents on Aug 7, before the results announcement.
