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Sky Television Announces 2006 Annual Result

18 August 2006

Sky Television Announces 2006 Annual Result

SKY Network Television Limited ("SKY") announced today the result for the year ended 30 June 2006 being a net profit after tax of $60.1 million.

The SKY Board has declared a fully imputed final dividend of 4.00 cents per share, giving a total dividend for the year of 8.00 cents. This represents a distribution of 52% of SKY's after tax profit.

Total revenue was $548.9 million, an increase of $56.5 million (11.5%) over the previous year.

John Fellet, SKY Chief Executive said, "The result is very pleasing especially as it includes $50.4 million of interest costs incurred on the additional $500 million of debt that was raised as part of the merger of SKY and its major shareholder, INL, which occurred on July 1 2005." "SKY had another excellent year, continuing to show gains across all key areas including growth in subscriber numbers, average revenue earned per subscriber, as well as a reduction in operating expenses relative to revenue", said Fellet.

EBITDA (earnings before interest, tax, depreciation and amortisation) increased by 12.7% to $247.7 million.

SKY's subscriber base grew by 48,102 subscribers over the previous year, achieving a new high of 667,270. The subscriber base comprises 492,381 residential digital subscribers (73.8%), 64,927 residential UHF subscribers (9.7%) 97,812 wholesale subscribers (14.7%) and 12,150 (1.8%) commercial and other subscribers. SKY is now in 42% of New Zealand homes.

Churn, the percentage of subscribers who disconnect their service, continues to fall. Gross churn fell from 15.8% for the June 2005 year to 13.5% in June 2006, clearly demonstrating the continuing strength of SKY's channels and programmes.

The last year saw the launch of four new channels; Food TV, Playhouse Disney Channel, CCTV 9 and Mind Games (a new interactive games channel), all of which contributed to the increase in SKY's share of television viewing by 6% over the last year.

Looking ahead, the new Optus D1 satellite, scheduled for launch in September 2006, will initially increase channel capacity by 25%, with the option to add more bandwidth in the future, allowing SKY to continue to increase the number of channels and services on offer to subscribers.


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