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Asian Pay Television Trust’s First Quarter Earnings

Asian Pay Television Trust (SGX: S7OU) is one of the few unique business trust listed in Singapore. It is invested mainly in pay-TV and broadband business in Asia. The business trust main asset is Taiwan Broadband Communication, considered as the third largest cable TV operator in Taiwan. The trust announced its first quarter earnings on 6th May 2014.

Operating Result

The trust ended the quarter with revenue of S$ 77.2million. Of the S$ 77.2million, the basic cable TV business contributed about 80% while the broadband business contributed 15.9%. The remaining is from its premium digital cable TV business. The current subscriber base for all three segments remains relatively similar to last year. However, the average revenue per user (ARPU) for both the premium digital cable TV and the broadband business dropped slightly.

After the operating cost, the trust achieved an EBITDA of S$ 50.464million. On the balance sheet, the group has a gearing ratio of 39.5%. However, as most of its assets are intangible assets from the cable TV licenses, APTT can be considered to have a negative tangible equity. The annual interest rate of its borrowing is around 4% after hedging and it has an interest coverage ratio of more than 4 times.

Going Forward

APTT expanded network is currently covering about 30% of the homes in Taichung. It is still progressing as plan with its network expansion plan in the region. The trust is planning to spend a further S$ 37 to 47million for the year for its capital expenditures. Another S$ 20 to S$ 30million will be spending over the next two years.

Asian Pay Television Trust did not announce any distribution this quarter as the trust’s policy is to distribute its earnings semi-annually. The board is reassuring unitholders that the distribution guidance of 8.25 cents per unit for 2014 will be met. A distribution of 4.12cents per unit will be declared next quarter and a further 4.13cents per unit will be declared at the end of the year.

Asian Pay Television Trust ended its trading day at S$ 0.765 per unit. With its guidance distribution, that would mean an annual yield of about 10.8%.