AsiaSat of Hong Kong in November hired former Eutelsat executive Andrew G. Jordan as chief executive and in February signed on a new chief commercial officer. Credit: AsiaSat AsiaSat of Hong Kong in November hired former Eutelsat executive Andrew G. Jordan as chief executive and in February signed on a new chief commercial officer. Credit: AsiaSat

 

PARIS — Satellite fleet operator AsiaSat on March 15 reported a decline in revenue and operating profit in 2016, as expected, but said there were signs of an upturn in its long-overcrowded, hyper-competitive Asian markets.

Hong Kong-based AsiaSat in November appointed a new chief executive, Andrew G. Jordan — a former Eutelsat manager — and in February signed on a new chief commercial officer.

The company’s 2017 results are likely to be bolstered by the expected $22 million coming from Israeli operator Spacecom, which has leased the AsiaSat-8 satellite’s Ku-band payload and moved the satellite to Spacecom’s orbital slot for at least four years, for $22 million a year.

For the 12 months ending Dec. 31, AsiaSat reported revenue of 1.27 billion Hong Kong dollars, or $164 million at Dec. 31 exchange rates, a decline of 3 percent in Hong Kong dollar terms.

Operating profit, at 511.3 million Hong Kong dollars, was down 16 percent from the previous year.

A return to China’s video market

But AsiaSat’s regulatory approval to return to mainland China in 2016, after an eight-year absence, with 14 C-band transponders on AsiaSat-6 bodes well for near-term Chinese television demand from AsiaSat’s fleet.

AsiaSat Chairman Ju Wei Min, in a statement accompanying the financial results, acknowledged that 2016 was a “disappointing” year both from continued “global oversupply of satellite capacity of all kinds” and what he referred to as “disruptive new technologies.”

Ju said AsiaSat is weighing its own use of one of the these disruptors, a high-throughput satellite to reuse frequencies by dicing coverage into multiple small spot beams.

Ju said Asia’s increasing appetite for high-definition television, which uses more satellite spectrum than standard-definition TV, has been matched by the advent of video compression, which “to some extent neutralizes the benefits of mobility increases and video format upgrades.”

MPEG-4 negates much of the HDTV bandwidth appetite

The remarks suggest that AsiaSat is converting its broadcasts to the latest MPEG-4 compression at about the same rate as it attracts new HDTV customers rather than having incurred the cost of MPEG-4 transition in advance and now waiting for the payoff in HDTV-fueled demand for bandwidth.

AsiaSat operates four satellites, not including the AsiaSat-8, carrying a total of 99 transponders. The company has an additional satellite, AsiaSat-3S, operating in inclined orbit to save fuel.

Again excluding AsiaSat-8, its fleet utilization at the end of 2016 was 67 percent, down from 72 percent a year ago.

The company has one satellite, AsiSat-9, under construction and scheduled for launch late this year. It will carry a C-/Ku-band payload to replace the aging AsiaSat-4 at 122 degrees east, and a high-throughput Ka-band payload for maritime and aeronautical connectivity customers.

Perhaps the most surprising figure in the AsiaSat results was the new business won in 2016, which totaled 1.44 billion Hong Kong dollars, more than double the backlog added in 2015.

Ju, who in the past has delivered blunt appraisals of the company’s prospects, said he was “cautiously optimistic” about AsiaSat’s financial performance in 2017.

 

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Peter B. de Selding
Peter B. de Selding
Peter de Selding is a Co-Founder and editor for SpaceIntelReport.com. He started SpaceIntelReport in 2017 after 26 years as the Paris Bureau Chief for SpaceNews where he covered the commercial satellite, launch and the international space businesses. He is widely considered the preeminent reporter in the space industry and is a must read for space executives. Follow Peter @pbdes