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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