PAY-TV operator Foxtel has finally after 10 years made a profit by earning $55 million in the second half of 2005.
PAY-TV operator Foxtel has finally after 10 years made a profit by earning $55 million in the second half of 2005. Chief executive Kim Williams said yesterday the profit was sustainable, coming after a year of increased subscriber numbers, growing revenues and higher ratings. Subscriber numbers rose 9 per cent over the year to December 2005, topping 1.07 million.
“We are just beginning to reward our owners for their long-term commitment,” Mr Williams said. Telstra owns 50 per cent of the business, while James Packer’s Publishing & Broadcasting Ltd and News Ltd (publisher of The Australian) hold 25 per cent stakes.
Under Mr Williams’s leadership, Foxtel has established itself as a technological leader, converting 80 per cent of its subscribers to its digital service by the end of 2005. It is also committed to launching at least two 24-hour, high-definition channels by 2008. Foxtel’s run to profitability has quickened over the past year, with its earnings before interest, tax, depreciation and amortisation of $55 million in the six months to December 31, 2005, representing an increase of more than 200 per cent.
In the first half of the previous financial year, Foxtel booked an EBITDA loss of $46million. In the December 2005 half, it recorded an operating loss of $23 million compared to the previous loss of $115 million. Sales increased by 23 per cent to $603 million. The result was underscored by a rise in average revenue per user. Of Foxtel’s digital subscribers, 44 per cent were taking the highest package of programming, while less than 15 per cent were receiving the basic package at the end of 2005.