AUN Austar United Communications Ltd.

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


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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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