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Draft press release on results for first nine months of 2004
 

The Chairman and Chief Executive Officer of Phoenix Satellite Television, Mr. Liu Changle, said today that he was very pleased to announce that for the third successive quarter the Phoenix Group had made a profit.  He said that the key points emerging from the Group’s performance are as follows:

 

·        The Group’s revenue for nine months ended 30 September 2004 was approximately HK$836,026,000, which was 63.5% higher than the same period in the previous year.  

 

·        The performance of InfoNews was especially encouraging, with revenue for this period reaching approximately HK$130,800,000, which was almost eight times that of the same period last year.

 

Liu Changle said that the Group’s performance over the last quarter maintained the momentum displayed during the first half of the year, and that this was a strong indicator that the Phoenix formula, both in terms of advertising sales and programming, was now working extremely successfully.

 

 

FINANCIAL DETAILS

 

Revenue of the Phoenix Group for the nine months ended 30 September 2004 reached a record high of approximately HK$836,026,000.   This figure represented an encouraging increase of approximately HK$324,778,000, or 63.5%, over the same period last year.  Advertising revenue, which represented 94.0% of the Group’s total revenue, recorded a remarkable increase of 73.0% as compared with same period last year, which was mainly attributable to both the success of the multiple agencies model in advertising sales implemented in January 2004 and the substantial increase in the brand awareness of Phoenix programming.

 

Operating costs increased by 24.2% to approximately HK$723,459,000, which was mainly due to the increase of commission expenses that flowed from the rise in advertising revenue.  The Group’s profit from operations and profit attributable to shareholders for the nine months ended 30 September 2004 were approximately HK$112,567,000 and HK$119,777,000 respectively.  As compared to a loss from operations of approximately HK$71,256,000 and a loss attributable to shareholders of approximately HK$59,702,000 in the same period last year, the results for this nine-month period represent significant turn arounds of approximately HK$183,823,000 and HK$179,479,000 respectively.

 

Phoenix Chinese Channel, the Group’s flagship channel, remained by far the most important source of revenue for the Group, accounting for 77.3% of the Group’s total revenue for the nine months ended 30 September 2004.  It showed an increase of 48.5% as compared with same period last year.  But even more encouraging was the performance of Phoenix InfoNews Channel.  Its revenue was almost eight times that of the same period last year, jumping to approximately HK$130,800,000, and operating loss was reduced by a substantial 88.3% for the nine months ended 30 September 2004 as compared with same period last year.

 

The Group’s results for the nine months period ended 30 September 2004 and the same period last year respectively are summarized below:

 

Results of both Phoenix North America Chinese Channel and Phoenix Chinese News and Entertainment Channel showed gradual improvement.  However, subscription revenue of Phoenix Movies Channel decreased  mainly due to the termination of the minimum guarantee arrangement with an agent in the PRC in July 2003.

 

The performance of  other businesses was steady as compared with the same nine month period last year. The increase of corporate overheads was mainly attributable to the increased spending on the Group’s promotional activities.

 

As compared to the same quarter last year, revenue for the quarter ended 30 September 2004 increased by 75.5%, to approximately HK$267,159,000.  The profit attributable to shareholders for the quarter ended 30 September 2004 grew to approximately HK$36,975,000, as compared to a loss attributable to shareholders of approximately HK$25,631,000 in the same period last year.


 

The table below shows the operating results of our businesses for the three months ended 30 September 2004 and the same period last year:

 

 

Three months ended 30 September

 

2004

 

2003

 

HK$’000

 

HK$’000

Phoenix Chinese Channel

84,251

 

37,646

Phoenix InfoNews Channel

(4,096)

 

(26,505)

Phoenix Movies Channel, Phoenix North America Chinese Channel & Phoenix Chinese News and Entertainment Channel

(13,396)

 

(10,200)

Other businesses

(1,422)

 

(3,680)

Corporate overheads

(30,865)

 

(25,188)

Profit/(Loss) from operations

34,472

 

(27,927)

 

 

BUSINESS OPERATIONS AND PROSPECTS

 

Phoenix has continued to present a rich menu of innovative programming that has a strong appeal to the Chinese-speaking audience, both in the mainland and beyond.   Phoenix has also been at the forefront of Chinese-language news programming, with in-depth reporting on the tragic Bislan massacre in southern Russia, the on-going violence in Iraq, and the continuing Israeli-Palestinian conflict.  During this quarter, Phoenix also strengthened its coverage of American issues by expanding its news bureau in Washington D.C., which of course has enabled a comprehensive coverage of the U.S. presidential election process.  The growing international recognition of Phoenix as an impartial and influential Chinese-language television news service was reflected in U.S. Secretary of State Colin Powell’s decision to do an exclusive interview with Phoenix during his visit to Beijing in late October.

 

Besides comprehensive news coverage, Phoenix has also featured eye-catching entertainment and talk-show programmes, and has consequently remained a favourite with advertisers, a fact that is apparent in the steady increase of the Group’s advertising income over the last nine months.  Phoenix recently staged the Miss Chinese Cosmos pageant, which repeated the success of the beauty pageant that Phoenix mounted last year.

 

Phoenix Website has also become immensely popular with the audience in China.  At the 2004 Chinese Commercial Internet Site award ceremony, hosted in late October by the magazine Internet Weekly, Phoenix Website was assessed to be one of the five most influential websites in China, further underscoring the growing recognition of the Phoenix brand name. 

 

Phoenix has succeeded in further expanding its global footprint, and Phoenix InfoNews was officially launched in the United States on 1 October, 2004, with former Chinese Foreign Minister and State Councillor Qian Qichen making an appearance at a function in New York to mark its launch.

 

In view of the huge demand for the limited advertising airtime on some of Phoenix programmes and the fact that many mainstream television channels on the mainland and in Hong Kong have made substantial increases to their advertising rates, Phoenix has decided to increase the advertising rates on the Phoenix Chinese Channel from 8 November 2004.     

 

The Phoenix management remains extremely optimistic about the long-term prospects of the Group, and this confidence has in part been based on the continued expansion of the Phoenix audience in mainland China and the rest of the world.  According to research conducted by CCTV’s Market Research Corporation to rank satellite television viewers’ satisfaction level, Phoenix rose from being the number two satellite broadcaster in the second half of 2003 to being number one in the first half of 2004.  These statistics show that Phoenix is growing in popularity and that Phoenix’s brand name recognition is accordingly also strengthening, which all suggest that Phoenix is extremely well placed to perform well in the foreseeable future.  Due to these positive indicators, the Company will strongly consider declaring a final dividend for this year.

 

 

- 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 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 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