NDS income halves

New terms attached to conditional access contract renewals have pushed down first quarter income at NDS Group by 56% to $25.9 million (€20.25m). NDS President and Chief Executive Dr Abe Peled said the figures did not yet reflect the current global economic uncertainty, but that the company was closely monitoring field results.

“NDS’s results this quarter reflect lower revenues from several large customers whose CA contracts have been renewed with certain volume discounts and new pricing to reflect different smart card change-over policies, as well as smart card recycling by certain customers,” said Dr Peled. “We continue to invest in the key areas that will drive our business, and have been gratified by the reception of our leading technologies at the International Broadcasting Convention in Amsterdam in September 2008.”

One factor in the CA business has been clients that have begun to recycle both the set-top box and the smart card when the original client terminates their contract. This has reduced the demand for new smart cards and reduces NDS’s incremental set-top box royalties. It also has a potential knock on effect for set-top box manufacturers.

Revenue for the quarter ended September 30, 2008 fell 11% to $182.2 million. 95.4 million active devices used NDS conditional access technology at end of period; 98.7 million middleware clients and 14.5 million DVR were deployed with NDS technology.