AUN 0.00% $1.52 austar united communications limited

AUN Austar United Communications Ltd.

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    Austar United Communications Ltd.
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    Half Yearly Report/ASIC Half Yearly Accounts
    14/8/02 12:56:07 PM




    AUSTAR UNITED COMMUNICATIONS LIMITED 2002-08-14 ASX-SIGNAL-G


    HOMEX - Sydney


    +++++++++++++++++++++++++
    Austar United Communications Limited ("Austar") today released its
    second quarter and half year result, showing that the company met its
    target of achieving positive EBITDA for the second quarter. Austar
    recorded EBITDA of $0.7 million for the quarter ended 30 June 2002,
    which reflects a 103% or $21.6 million improvement compared with the
    same quarter in 2001.


    Excluding TVSN's results, Austar recorded positive EBITDA of $2.3
    million for the second quarter. As a result of TVSN's acquisition of
    Danoz, finalised on 19 June 2002, Austar now only holds 22% of TVSN,
    and will no longer consolidate TVSN's results.


    In addition to achieving positive EBITDA targets, cash used in
    operating, investing and financing activities decreased from more
    than $43 million in Q1 2002 to $14.7 millionin Q2 2002, as
    previously disclosed. The cash used in the six months to 30 June 2002
    was $58.3 million, a significant decrease on the previous
    corresponding period, due to a number of factors including the
    renegotiation of the cost of certain programming and the
    restructuring of the business announced in the fourth quarter of
    2001.


    Highlights for Austar (excluding TVSN) for the six month period to 30
    June 2002 included:


    * Positive EBITDA of $3.2 million for the six months ended 30 June
    2002;


    * A significant gross margin improvement for the pay television
    business of $11.1 million or 23.3% as compared to H1 2001, primarily
    as a result of a rate increase effected 1 May 2002 and the
    renegotiation of certain programming costs effective 1 July 2001;


    * A significant decrease in operating and general administrative
    costs as compared to the same period in the prior year, as a result
    of the restructuring initiatives announced in the fourth quarter of
    2001; and


    * A 54% decrease in capital expenditure down to $22 million, from $49
    million for H1 2001.


    Commenting on the result, John Porter, Chief Executive Officer, said,
    "It is pleasing to see that our major restructuring initiatives are
    having a positive impact on earnings. We believe that we now have
    successfully re-engineered the business and are well placed to move
    our business forward in accordance with the expectations of our
    shareholders and our banks."


    Mr Porter noted that a slowing in growth had been a necessary
    consequence of the company's need to consolidate its operations
    following significant restructuring, as well as market conditions in
    regional Australia.


    Subscriber numbers in the pay television business reflect a small
    decrease, with the company recording 417,196 subscribers at 30 June
    2002, a reduction of 3.5% against last year. Despite this slight
    reduction in subscribers, Austar retains its position as having the
    highestpenetration level of any pay TV service provider in
    Australia.


    "There is no doubt that in light of interest rate increases and an
    ongoing severe drought, regional Australians are being cautious about
    how they apply discretionary expenditure," said Mr Porter.


    "In the last six months, we have focused strongly on consolidating
    our business since our restructure, and we have taken steps to ensure
    we are extremely well placed to take advantage of industry
    developments. We have also made huge steps forward to improve our
    delivery of customer service.


    "In the next six months, we will focus on attracting and keeping
    quality, profitable customers and reducing churn, as we continue to
    control costs and drive increased efficiency into our service
    delivery."


    For further information please contact:


    Deanne Weir
    Director Legal and Corporate Affairs
    Austar United Communications
    0402 865 300


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