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AsiaSat 6 and 8 Growth Cut Short by Licensing Hang-ups

By Caleb Henry | August 27, 2015
      AsiaSat 6 SSL

      The AsiaSat 6 satellite. Photo: AsiaSat

      [Via Satellite 08-27-2015] Asia Satellite Telecommunications Holdings Limited, or AsiaSat, reported that licensing approvals are inhibiting growth from its new satellites AsiaSat 6 and AsiaSat 8 during its 2015 interim results for the six months ended June 30. Combined with the challenge of excess capacity in Asian markets and flattening demand in some places, the company felt downward pressure on pricing that it expects will persist into the near future until that capacity is absorbed.

      “The first six months of 2015 were challenging for AsiaSat and the satellite sector as a whole. The company does not expect significant positive change in the market environment in the second half. Due to delays in licensing approvals, it is taking longer than expected to lease out the transponder capacity of AsiaSat 6 and AsiaSat 8 while the depreciation of both satellites will commence in the second half of the year,” said Gregory Zeluck, chairman, AsiaSat.

      Zeluck added that, if the volatility of China’s Yuan continues, it could have a negative impact on the second half of performance. Interest expenses arising from the AsiaSat 6 and 8 Ex-Im bank loans and the bank loan raised for the special interim dividend payment will impinge on the earnings of the company in the second half of the year as well. Still, he described a positive long-term outlook.

      “Despite these challenges, we are optimistic about our prospects for the future, as we operate in one of the world’s growth markets. We remain vigilant in developing effective business strategies in a rapidly evolving market, where AsiaSat, with its new capacity on line continues to be well-positioned to capture the region’s various growth opportunities,” he said.

      AsiaSat 9, the replacement for AsiaSat 4, remains on track for completion in the fourth quarter of 2016. Overall fleet utilization rate for the period ended June 30 was 72 percent, compared with 75 percent as of Dec. 31.