2013 Interim Results8 August 2013

i-CABLEii--CABLECABLECommunications Communications LimitedLimited

• Over-capacity continued but price competition stabilized

• Subscriber & revenue erosion during & subsequent to the period was relatively mild

• Broadband revenue steadied despite slightly smaller customer base

• Due to prudent investment in sports rights, operating costs are expected to decline at a faster rate than revenue decline in thesecond half of 2013 which may improve margin

• Capex was one gear lower

Results Highlights

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Television

• The customer base declined partly due to the expiry of BPL rights. Thanks to a host of programming, marketing & service enhancementinitiatives, efforts to retain customers paid off with attrition rates kept well in check

• Due to prudent investment in sports rights, operating margin is expected to improve in the second half of 2013

Subscription Services

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Television

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• Lower turnover mainly attributable to a decrease in subscriptionrevenue related to BPL as well as lower advertising income

• Subscriber & revenue erosion during & subsequent to the period was relatively mild

2013

HK$M 1H 2H 1H vs 1H12

Turnover 855 901 820 - 4%

Opex before dep’n (836) (951) (827) - 1%

EBITDA 20 (50) (7) n/a

Depreciation (79) (75) (70) - 12%

Operating Loss (59) (125) (76) 29%

EBITDA Margin 2% -6% -1%

Operating Margin -7% -14% -9%

2012

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• Sports continued to feature strongly with exclusive rights to the European, Australian & Japanese leagues & tournaments

• Diversity was never overlooked, bringing viewers a wide range of prestigious international sports events spanning swimming, badminton, basketball, volley ball, darts, bowling, snooker, ice hockey, car racing, dancing, tennis, figure skating & table tennis

Programming

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SportsSports

Programming

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• Official broadcaster of the 17th Asian Games Incheon 2014

• All media rights with extensive live & archived coverage in multiple formats across media platforms

SportsSports

• Launched two flagship entertainment channels

�HD FAN. Entertainment Channel高清奇妙娛樂台 (Ch 12 / hd 212)

�HD CABLE Drama Channel高清奇寶劇集台 (Ch 13 / hd 213)

Programming

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EntertainmentEntertainment

Programming

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• Introduced in-depth weeknight reports, sharing unique perspective of the most topical news & current affairs on the mainland

• Our local journalists not only provided professional coverage of news at home but also made news headlines themselves with their remarkable investigative reports often instantly & widely picked up & quoted by fellow media organisations

Programming

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NewsNews

50%

27%

15%

7%

0%

10%

20%

30%

40%

50%

60%

HKC Now TV TVBNV bbTV

43%

15%5%

37%

Viewership

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Source: Nielsen HKTAM

CABLE TV individuals aged 4+

Jan – Jun 2013, All Day All Time

• CABLE TV viewership nearly 2X the closest follower

CABLE TVTVB Jade

(Analog+SD+HD)

Source: Nielsen HKTAM

Pay TV viewers aged 4+

Jan – Jun 2013, All Day All Time

50%

27%

15%

7%

CABLE TV Now TV* TVBNV^ bbTV

Other Terrestrial & Satellite TV

Other Pay TV

37% 43%

16%4%

Viewing Share Among Pay TV Operators

TV Share Among CABLE TV 4+ subs

* Excluded 8 TVBNV channels via Now TV platform

^ Included 8 TVBNV channels via Now TV platform

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Customers

1,074,0001,089,000

199,000201,000

120,000126,000

June 2013December 2012

Television

Broadband

Telephony

Internet & Multimedia

• Our broadband business continued to come under pressure from both wire-line & wireless service providers

• Competition remained intense with over-capacity in the sector, the first half of 2013, however, did not see any harsh price wars

• Whilst the market has been relatively stable, the return to aggressive pricing to fight for market share remains a risk

Subscription Services

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Internet & Multimedia

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• Broadband revenue steadied despite slightly smaller customer base

2013

HK$M 1H 2H 1H vs 1H12

Turnover 169 169 171 1%

Opex before dep’n (111) (110) (112) 1%

EBITDA 58 59 58 0%

Depreciation (46) (46) (46) - 1%

Operating Profit 12 14 13 2%

EBITDA Margin 35% 35% 34%

Operating Margin 7% 8% 7%

2012

• Released 11 titles in the first half of 2013

Sundream Motion Pictures

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Consolidated Results

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2013

HK$M 1H 2H 1H vs 1H12

Turnover 1,038 1,089 1,009 - 3%

Opex before dep’n (1,010) (1,140) (1,007) 0%

EBITDA 28 (51) 1 - 96%

Depreciation (129) (124) (118) - 8%

Operating Loss (100) (174) (117) 17%

Finance Costs & Others 2 0 (1) n/a

Loss before taxation (99) (174) (118) 20%

Taxation 2 (7) 6 221%

Net Loss (97) (181) (112) 16%

Capex 113 96 78 - 31%

2012

• Margin may improve in the second half of 2013 with our prudent investment in sports rights

• Capex was one gear lower

Operating Expenses

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• Lower operating costs primarily due to lower sales acquisition cost & network related costs

2013

HK$M 1H 2H 1H vs 1H12

Programming 657 770 662 1%

Network 114 108 109 - 5%

Selling, CS, G&A 186 203 186 0%

Cost of Sales 52 58 51 - 2%

Sub-total 1,010 1,140 1,007 0%

Depreciation 129 124 118 - 8%

Total 1,138 1,264 1,126 - 1%

2012

• In addition to the usual constraints of saturating markets, the business

climate looks set to be even more challenging & competitive pressure

stronger in the next few years

• 3½ years have gone by since Group affiliate Fantastic Television Limited

submitted an application for a free domestic TV programme service

licence. Whilst it remains to be seen whether the Government will live up

to its promise to open up the free TV market, the TV landscape has

already seen significant changes

• The overwhelmingly dominant TV player has become more aggressive

than ever, from acquiring premier sports rights, to poaching programming,

ideas & talents, and to setting up dedicated sports channels on its pay

platform, making full use of “due process” to steadfastly challenge the

Government’s decision to open up the free TV market

• The overall operating environment is not expected to improve in the near

term. However, operating costs are expected to decline in the second

half of 2013 due to factors such as stringent cost control, prudent

investments & the decrease in sports programming costs 17

Outlook

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i-CABLE Communications LimitedHKSE Stock Code: 1097.HK

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