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.

ENDS