The Chairman and Chief Executive Officer of Phoenix Satellite Television, Mr. Liu Changle, said today that he was delighted to announce that for the second quarter running the Phoenix Group had made a profit. He said that the key points of the Group’s performance in the last period were as follows:
· Revenue for the six months ending 30 June 2004 of approximately HK$568,867,000, a 58.4% rise over the revenue for the same six-month period last year
· Revenue of Phoenix InfoNews for the period was almost ten times that of the same period last year.
· The Group made a profit of approximately HK$42,327,000 during the three months ending 30 June 2004
Liu Changle said that the Group’s performance for this second quarter maintained the momentum that characterized the first quarter, and this outcome strongly indicates that the new advertising marketing arrangements adopted on the mainland should have a long-term, positive impact on the Group.
FINANCIAL DETAILS
The revenue of the Group for the six months ended 30 June 2004 reached a record high of approximately HK$568,867,000. This figure represented a significant increase of approximately HK$209,827,000, or 58.4%, over the same period last year. Advertising revenue, which represented 94.2% of the Group’s total revenue, recorded an encouraging increase of 68.3% as compared with same period last year, which was largely attributable to the success of the newly implemented multiple agencies model in advertising sales.
Operating costs increased by 22.0% to approximately HK$490,772,000, which was mainly due to the increase of commission expenses incurred by the rise in advertising revenue. The Group’s profit from operations and profit attributable to shareholders for the six months ended 30 June 2004 were approximately HK$78,095,000 and HK$82,802,000 respectively, as compared to a loss from operations of approximately HK$43,329,000 and a loss attributable to shareholders of approximately HK$34,071,000 in the same period last year.
Revenue for the first quarter and the second quarter of 2004 were very similar at HK$284,578,000 and HK$284,289,000 respectively.
Revenues from television broadcasting, including both advertising and subscription revenues, continue to be the main income source of the Group, and amounted to approximately HK$556,987,000 (six months ended 30 June 2003: HK$347,657,000) accounting for 97.9% of the Group’s revenues for the six months ended 30 June 2004. Compared with the same period last year, revenues from television broadcasting recorded an increase of 60.2%.
The Group’s flagship channel, Phoenix Chinese Channel, accounted for 77.8% of the Group’s total revenue for the six months ended 30 June 2004 and showed an increase of 43.3% as compared with same period last year. More encouraging was the performance of Phoenix InfoNews Channel. Its revenue increased almost 9.7 times to approximately HK$89,118,000, and operating loss was substantially reduced by 90.0% for the six months ended 30 June 2004 as compared with same period last year.
Results of both Phoenix North America Chinese Channel and Phoenix Chinese News and Entertainment Channel, which broadcasts across Europe, showed gradual improvement. However, subscription revenue of Phoenix Movies Channel decreased in the period, mainly due to the termination of the minimum guarantee arrangement with an agent in the PRC since July 2003.
The segmental result for television broadcasting recorded a profit of approximately HK$151,937,000 for the six months ended 30 June 2004, as compared to HK$14,594,000 in the same period last year, an impressive jump of 9.4 times.
Revenues from programme production and ancillary services were approximately HK$13,285,000 for the six months ended 30 June 2004, which represented an increase of 18.9% as compared with the same period last year. As a result, the segmental result of programme production and ancillary services recorded a profit of approximately HK$2,600,000 for the six months period ended 30 June 2004 (2003: a loss of approximately HK$3,339,000).
Through various cost management schemes, operating costs of the internet business were reduced while revenue was maintained at a steady level. The segmental result of the internet operations recorded a loss of approximately HK$4,707,000 for the reported period (2003: a loss of approximately HK$5,870,000), or decreased by 19.8% as compared with same period last year.
BUSINESS OVERVIEW AND PROSPECTS
Liu Changle said that Phoenix was continuing to pursue the objective of providing fresh and creative programming. Besides producing its own well-established programmes, it is at the same time looking to develop new material that caters to Chinese tastes and interests. Over the next several months Phoenix will be shooting a new travel programme that will blend adventure with a historical event. This programme, Zheng He Sails The Western Seas, features Shaun Weng, the only ethnic Chinese to have circumnavigated the world single-handedly, who will sail his single-masted vessel, the Albatross (now renamed in Chinese as “鳳凰號”), from China to Africa, following the route taken by the Ming Dynasty Admiral, Zheng He.
He also announced that Phoenix is preparing to stage the Miss Chinese Cosmos contest, which will build on the success of the beauty pageant Phoenix staged last year. While this event will involve many locations across China, the finale will be held in Hong Kong.
Phoenix news coverage has also remained at the forefront of Chinese language news broadcasting, with Phoenix InfoNews continuing to occupy an important place as the most comprehensive provider of international news and financial information in the Chinese media world. Among the important events that Phoenix reported on was the Taiwan election, underscoring its unique role by once again being the only television station with a major mainland audience to broadcast live the inaugural address of Chen Shui-bian, the victor in the Taiwan presidential election, on 20 May.
According to the survey report of satisfaction of Phoenix for the first half of 2004 conducted by CVSC-TNS Research Co., Ltd. (央視市場研究股份有限公司), the consolidated audience satisfaction of Phoenix Chinese Channel ranked number 1 for the first time. Besides, Phoenix Movies Channel and Phoenix InfoNews Channel ranked number 3 and 4 respectively.
He further reported that in the 2003-2004 Most Respected Companies Of China Election organized jointly by Economic Observer and the Research Centre of Beijing University, Phoenix was elected as one of the Most Respected Companies Of China for three consecutive years.
In June 2004, Phoenix ranked number 23 amongst the 500 most valuable brands jointly announced by世界品牌試驗室and World Economic Forum (世界經濟論壇).
The addition of Phoenix Chinese Channel and InfoNews Channel to PCCW Now Broadband in Hong Kong from 17 August will significantly increase Phoenix exposure in the Hong Kong market.
In conclusion he said that with two continuous profit-making quarters, and investment in cutting edge programming to cater to the interests of the Chinese-speaking market, the prospects for Phoenix over the remainder of this year look very promising. Barring unforeseen circumstances, the board may consider paying a dividend for this financial year.
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ABOUT PHOENIX
Phoenix Chinese Channel was launched on 31 March, 1996, with the aim of offering quality content to Chinese communities around the world. The dynamism of this massive market, combined with successful expansion strategies, has allowed Phoenix to develop a comprehensive multi-channel platform. Today, Phoenix Chinese, Phoenix Movies, Phoenix InfoNews, Phoenix Chinese News and Entertainment and Phoenix North America Chinese channels together broadcast to audiences in the Asia Pacific, as well as in Europe, North America and North Africa, covering more than 90 countries and regions. The mission of the group is to offer varied, high-quality content to the global Chinese population.
Phoenix Satellite Television Holdings Limited was listed on the SEHK Growth Enterprise Market (GEM) on 30 June 2000.
For more information, please contact: -
Corporate Affairs and Publicity Department
Phoenix Satellite Television Company Limited
Ms Lizzie Cheung
Tel: +852 2621 7480
Email: siului@startv.com
Mr Charlie Lam
Tel: +852 2621 7403
Email: charlie@startv.com
Further information about Phoenix Satellite Television Holdings Limited can be found at www.ifeng.com and www.hkgem.com | 
