The Chairman and Chief Executive Officer of Phoenix Satellite Television, Mr. Liu Changle, said today that he was delighted to announce that the 2004 financial year represented a dramatic turn-around for the Phoenix Group, which made a profit of over 150 million HK dollars.  He said that the key points emerging from the Group’s performance are as follows:

• The Group’s revenue for the first time exceeded one billion. Revenue for the year ended 31 December 2004 was 56.9% higher than the previous year, and was approximately HK$1,113,048,000.

• The substantial increase in revenue generated an annual profit attributable to shareholders of approximately HK$150,494,000, which was a marked turn-around after a loss of approximately HK$72,937,000 in 2003. 

• The performance of InfoNews continued to be encouraging, with revenue for 2004 reaching approximately HK$189,768,000, which was a dramatic jump from  approximately HK$ 26,873,000 it made during 2003.

• The Board recommended a final dividend of HK$0.01 per share. 

FINANCIAL DETAILS

Liu Changle said that the Group’s revenue for the year ended 31 December 2004 was approximately HK$1,113,048,000, an increase of 56.9% over that of 2003.  The growth in advertising revenue, which represented over 90% of the Group’s total revenue, was the major contributor.  Operating costs increased by 22.2% to approximately HK$974,512,000, mainly as a consequence of the increase in commission expenses flowing from the substantial rise in advertising revenue.

The Group’s profit from operations and profit attributable to shareholders for the year ended 31 December 2004 were approximately HK$138,536,000 and HK$150,494,000 respectively.  Compared to same period of 2003, there were significant improvements of approximately HK$226,443,000 and HK$223,431,000 respectively.

The chart of results presented below compares the performance of the year ended 31 December 2004 with that of the same period of 2003 in order to give a clearer picture of the overall trend of the Group’s operations.

BUSINESS OVERVIEW AND PROSPECTS

Liu Changle emphasized that 2004 was a remarkably successful year for the Phoenix Group.  The Group’s annual income exceeded one billion Hong Kong dollars for the first time in the company’s history, and at the same time the Group was able to keep operating costs under tight control, leading to a substantial profit of  approximately 150 million Hong Kong dollars.  After two consecutive loss-making years this was an exceptional performance, and the Board  believes that this  performance  is  set to be continued over the coming twelve-month period. Liu Changle said that the Board had consequently recommended a final dividend of  HK$0.01 per share.  No dividend has previously ever been paid by the Company.

One of the main factors behind the Group’s success during 2004 was the introduction of a new multi-agency advertising sales system, which allowed advertising agencies across China to market advertising on behalf of Phoenix.  This new system has produced a much more dynamic and comprehensive network of advertising agencies with an interest in marketing Phoenix, with the consequence that advertising sales have grown at a rapid rate. 

Another major driver behind this exceptional outcome was the rising fortunes of InfoNews, which in 2003 generated less than 4 % of the Group’s total income, but which in 2004 contributed 17 % of the Group’s total income.  When it was established in 2001 InfoNews was a serious strain on the Group’s financial situation, but in the less than two years since it was granted landing rights in mainland China InfoNews has more or less reached the break-even point.  The new advertising sales system has undoubtedly contributed to this turn-around in InfoNews’ financial performance, but another major factor has been the growing recognition by the Chinese television audience that InfoNews offers by far the most comprehensive news service available in Mandarin Chinese, not only in mainland China but also in other parts of the globe. 

During 2004 InfoNews was among the forefront of international television news agencies reporting on global events.  InfoNews provided a steady stream of reporting on the continued fighting in Iraq, the Israeli/Palestine dispute and the death of Arafat; it covered the tragic Bislan massacre in Russia with reporters on the spot who followed events from close quarters as they unfolded; and extensive coverage of the United States presidential elections.  InfoNews also provided comprehensive coverage of regional developments of direct interest to the Greater China region:  it featured the Taiwan presidential election, including the assassination attempt on Chen Shui-bian and the live broadcast of his inauguration; it also followed the North Korean nuclear issue and the Six-Party Talks, and had an exclusive interview with United States Secretary of State Colin Powell during his visit to Beijing last October.

Phoenix Chinese Channel remained the Group’s flagship, and continued to generate the bulk of the Group’s income.  It maintained the Phoenix tradition of innovative programming, and remained at the cutting edge of the increasingly competitive mainland Chinese television market.  During 2004 Phoenix Chinese Channel had considerable success with a series of documentaries, some on historical themes and others focusing on contemporary issues such as AIDS, which were able to attract considerable advertising revenue.  Phoenix Chinese Channel once again staged the Miss Chinese Cosmos Pageant, which was held in Hong Kong in November, with contestants coming from all over the world.

The success of both Phoenix Chinese and InfoNews reflects a substantial growth in awareness of the Phoenix brand name.  This in turn has helped to boost the popularity of the Group’s international channels, the Phoenix North America Chinese Channel and the Phoenix Chinese News and Entertainment Channel covering the United States and Europe respectively.  The growth of brand name awareness has also been augmented by the Phoenix website, which has been identified by Internet Weekly, China’s leading internet magazine, as one of the five most influential websites in China. Phoenix Website has an average daily consolidated page view of approximately 15,000,000 and visitor number of approximately 1,200,000 per day and has provided contents for various value-added services such as short message service (SMS) and multi-media service (MMS).  The Phoenix Weekly magazine, which features articles on a wide variety of subjects, is available in both Hong Kong and mainland China and more than 2,000,000 copies were sold in 2004. Phoenix Weekly is part of the inflight magazines of the major airlines operating in mainland China, including Dragonair and China Southern Airlines. 

Phoenix’s global reach has also continued to expand, with InfoNews officially launch in the United States, Malaysia and Singapore.   Phoenix has also greatly strengthened its position in Hong Kong as Phoenix Chinese Channel and InfoNews are now available on almost all the main TV broadcasters operating in the Special Administrative Region.

The Group is also looking for ways to take advantage of the new technologies that are now becoming available for carrying television programming.  At present InfoNews is available on 3G in Hong Kong and Phoenix is exploring the potential to establish arrangements with 3G mobile phone operators, internet protocol television broadcasters as well as broadband operators to carry Phoenix programming in other places.  The Group is also considering  taking advantage of  the new regulations that have been issued by the Chinese authorities, allowing foreign investors to hold up to 49 % of programme-production companies.

The management is very optimistic about the Group’s prospects for the coming year.  The new advertising marketing system shows every indication of continuing to generate a high level of income, and InfoNews’ performance in 2004 underscores that it is well equipped to win an ever larger audience in mainland China and beyond.

- End -

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 100 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 Annie Wan       Tel: +852 2621 9566       Email: anniew@startv.com

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