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Sky TV half-year net profit up 18.9%

Friday 18th February 2011

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Sky Network Television lifted half year net profit 18.9% to $60.3 million, attributed to success of the MY SKY HDi decoder and a rebound in advertising sales.

Revenue for the six months to the end of December was 7.8% higher than a year earlier at $398 million, with revenue from residential satellite subscriptions up to $316.6 million from $293.5 million and revenue from advertising up to $35.1 million from $27.6 million. A fully imputed interim dividend of 8c per share is to be paid.

Sky TV chief executive John Fellet said the number of MY SKY subscribers rose to 231,072 at December 31, from 144,148 a year earlier, and were now 29.3% of Sky's satellite subscriber base.

Gross churn of subscribers with the MY SKY HDi decoder was 9.5% for the rolling 12 months to December 31, compared to the churn rate for subscribers on the standard digital decoder of 15%, Fellet said.

The 7.9% rise in Sky's satellite subscription revenue was due to a 3.1% rise in average revenue per user (ARPU) to $69.45 from $67.35, mainly due to the increase in MY SKY subscribers, and a 3% rise in DBS (satellite) subscribers.

Sky's DBS ARPU excluding MY SKY and wholesale subscribers fell 1.6% to $65.76 compared to the comparative period.

Operating costs, excluding depreciation, for the half year increased by $12.5 million or 5.6%, with programme operations costs comprising both the costs of purchasing programme rights and also programme operating costs up by $8.7 million or 7.2%.

Depreciation costs were $7.4 million or 13.4% higher at $62.2 million, mainly due to depreciation charges on the new MY SKY HDi decoders installed during the period.

Capital spending fell to $59.4 million in the six months from $82.5 million a year earlier, due to reduced MY SKY HDi purchases, reduced broadcasting cost due to the completion of a television station upgrade and a decrease in installation costs which were high in the previous period due to the migration of UHF subscribers to digital, Mr Fellet said.

Sky TV shares were up 9c around 11am to $5.50, equal to the year-high also reached a week earlier.



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