Sky TV loses $19.5M

By Phil Boeyen, ShareChat Business News Editor

Thursday 15th February 2001

Pay-TV operator Sky Television (NZSE: SKY) has lost $19.55 million for the six months to the end of December after being hit by increased programming costs and the cost of adding new subscribers.

The interim loss is considerably higher than the previous year's $4.67 million deficit.

Sky says detracting from its results was the impact of the declining purchasing power of the New Zealand dollar.

"Most international programming deals are denominated in US dollars. In 1999 it took NZ$1.86 to buy US $1.00 of international programming, in 2000 it took NZ$2.09 to buy the same dollar of programming," says the company's CEO, John Fellet.

The financial impact of the currency drop resulted in an additional $8 million in programming costs.

"We have been able to renegotiate some programming contracts and the results will start to flow through this year."

Mr Fellet says the increase in net loss reflects the impact of the additional programming costs during 2000, but more significantly the continued growth in the subscriber base.

On the plus side the company says subscriber growth and the launch of interactive services were the key highlights for the first six months of this financial year.

Sky ended December with a subscriber base of 397,095, an all time high, with subscriber revenues growing by 20% over the period.

Its pay-per-view service has also continued to grow and by December revenues from the service exceeded $500,000 a month.

Sales revenue grew by $20 million to $119 million.

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