Asian Pay Tv

Asian Pay Tv: Asian Pay Television Trust (APTT) declared 2Q15 DPU of 2¢, bringing 1H15 DPU to 4¢. Management has reaffirmed its distribution guidance of at least 8.25¢ for the year, representing an annualized yield of 9.9%.

Revenue rose to $82.7m (+4.4% y/y, +0.5% q/q) on positive contribution from all three segments from its sole asset, Taiwan Broadband Communications (TBC).

Basic cable TV rose 3.4% to $65.8m mainly by positive FX gains, while ARPU and number of subscribers stayed flat q/q at NT$537/month and 756,000.

Premium digital cable TV climbed 11.6% to $3.8m increased to 138,000 (+1.5% q/q), although ARPU slipped to NT$187/month (-0.5% q/q).

Broadband jumped 7.5% to $13.1m from increased subscribers (+1.1% q/q to 187,000), on marginally lower ARPU of NT$522/month (-0.8% q/q).

TBC has achieved its year-end target for full penetration rate of its digital set-top boxes across five franchise areas, up from 95% in 1Q15.

EBITDA margin slipped to 61% (-1.2ppt y/y, +1.9ppt q/q), on higher operating expenses (+7.7% y/y) from staff costs (+14.4%) and legal and professional fees relating to the refinancing of TBC's borrowing facilities (+19%).

Meanwhile, bottom line dropped to $20.1m (-69.2% y/y, +38.4% q/q), mainly from the absence of a one-time excess tax provision of $43.9m recorded in 2Q14.

Aggregate leverage grew 2ppt q/q to 46%. Capex spending of $33m has peaked out in FY14 and is expected to ease to $20-25m and $10-15m in FY15 and FY16, respectively.

At the current price, APTT is valued at 0.93x P/B.