China Digital registers 26.6% fall in Q3 net revenue
| 24 November 2014
China Digital TV, the conditional access systems developer, has reported net revenues of US$17 million for the third quarter (Q3) of 2014 – a fall of 26.6% from the same period in 2013.
A decrease in shipments of smart cards for digital TV set top boxes – which numbered around 3.35 million in the third quarter of 2014, compared to 4.76 million in the same period in 2013 – was the main reason for the revenue decline, the company said.
Revenues from smart cards and other products amounted to $15.9 million in Q3 2014, a fall of 28.6% compared to Q3 2013. Revenues from services reached $1.2 million in the third quarter of 2014, up by 8.4% from the same period in 2013.
"During the third quarter of 2014, shipments of approximately 3.35 million smart cards came in slightly below our expectations, as digital penetration increased," said Dr Lu Zengxiang, acting chief executive officer and acting chief financial officer, China Digital TV.
"Net revenues were still in line with guidance due to an unexpected delivery of surface mounted chips and system integrations overseas. In the domestic market, steady demand for smart cards was driven by our major customers, including those in Jiangxi, Shandong, Guangdong, Sichuan and Jiangsu provinces," he said.
The company's operational income was $2.3 million in Q3 2014, a decline of 60.6% from the same period in 2013. Net income has also fallen compared to the same time last year – by 68.4% to $1.5 million.
"In newer market segments related to cable TV, we continue to push forward with our diversification strategy to provide value-added services. This quarter, we reached an agreement with multimedia company Shanghai Oriental Cable Network Co Ltd to provide a cloud service platform capable of covering five million cable TV subscribers. We also signed a contract with Jishi Media Co Ltd to provide new broadcast platforms," added Dr Lu Zengxiang.
As of the end of September 2014, China Digital TV had cash and cash equivalents and restricted cash totalling $55.5 million, with an operational cash flow of $1.2 million.
The company forecasts smart card shipment volumes to reach between 4.5 million and five million in the fourth quarter of 2014, with net revenues of up to $24.4 million.