Austar reveals improved results
Australia’s second-ranked pay-TV platform provider, Austar, has delivered a relatively strong quarter for the current climate, ahead of the addition of new services and channels in November. Many of the company's key indicators were better in this quarter than they have been for the last year.
For the three months to the end of September, the Liberty Global-backed operator, which is targeted at rural and regional Australia, added 10,452 subscribers to reach 739,171. That represents the largest increase since the same quarter in 2008, when Austar added around 19,000 subs. Residential subscribers grew around 7,000 to 615,000.
Average monthly churn fell from 1.27% to an impressive 1.14%. Recurring residential ARPU increased A$0.27 to A$76.18, although a fall in commercial user ARPU meant overall ARPU fell from A$82.03 a month to A$81.90.
Subscribers to PVR product MyStar increased to 121,009, or 20% of residential subs. The operator launches its next-generation MyStar HD set-top and package next month.
Earnings before interest, taxation, depreciation and amortisation (EBITDA) for the quarter increased by 12% to A$59.5 million compared to the corresponding period in 2008, reflecting a 6% increase in revenue to A$169 million and a 10% increase in gross margin to A$96.2 million. Capital expenditure decreased 33% when compared with the previous corresponding period, as a result of lower subscriber growth, a positive foreign exchange impact and appropriate management of inventory in preparation for a fourth quarter investment in MyStar HD. Meanwhile operating free cash flow for the three months ending September 30 increased 46% to A$36.9 million.
Austar CEO John Porter said: “Austar’s financial strength continues to be underpinned by our steadily growing subscription business. Our expanding margins, along with Austar’s extremely robust operating cashflow, have led to the company’s continued de-leveraging. As we make preparations for the launch of MyStar HD in the fourth quarter, we’ve continued our emphasis on cost control, which, combined with an increase in revenue, has once again delivered double digit EBITDA growth year on year, and we’re well on track to achieve a similar increase in EBITDA for the full year.”