SES revealed its half-year results (to June 30) on Monday. These showed buoyant growth in all areas, benefiting from its investment in AsiaSat last December.

Revenues increase to Euro340.4 million (up 36 per cent), operating profit was up to Euro186.3 million 36 per cent up), and group profit was increased to Euro96.8 million up 7 per cent).

SES stated that its investment in AsiaSat had slightly diluted overall profits, but that its European activity showed "strong growth". As regards the future for AsiaSat and the SES group overall, SES, in a statement to accompany the results, stated: "AsiaSat maintained its leading market position and continued to have good profit margins in the first half of the year. This is despite a difficult market caused by the slowdown in the Asian economies, which resulted in lower company revenues. SES and AsiaSat are now implementing a joint market approach between the two companies as a first step to offer worldwide customers a one-stop shop service."

Excluding the AsiaSat results, SES’ figures would have been: revenues increased to Euro299.1 million (up 20 per cent), operating profit up to Euro170.6 million (up 24 per cent), and profit up to Euro101.6 million (up 12 per cent).

SES said capital expenditures for the six months ended 30 June 1999 stood at Euro125.5 million compared to Euro41.1 million for the first six months of 1998. "Approximately 40 per cent of this increase is due to the first-time consolidation of AsiaSat with the balance coming from additional investment in satellites. During the period the company made significant payments in respect of the Astra 1H and 2B satellites," said the company.

Over the 12 months up to June 30, DTH/SMATV reception of TV, radio or multimedia services via satellite has grown by 8 per cent, or 2.7 million homes in Europe. The number of households connected to cable networks receiving satellite transmissions has increased by 3 per cent, or 1.5 million. Satellite penetration now stands at 83.7 million households (33.2 million DTH/SMATV and 50.5 million cable households), an increase of 5.2 per cent over the last 12 months. Satellite now reaches 50 per cent of all TV households in Europe."

SES said that digital services are driving growth in the direct reception markets. Its market research shows the number of homes receiving digital broadcasts via satellite increasing – year on year – by 2.5 million (+ 80.7 per cent) to reach 5.5 million at mid-year 1999, representing 16.6 per cent of all DTH/SMATV households.

In the core DTH/SMATV market, SES’ audience increased by 8.1 per cent or 2.1 million, to reach 27.9 million at the end of the first semester. Four out of five new satellite homes receive broadcasts from the Astra satellite system, whose total market share now amounts to 85 per cent.

Main growth markets, said SES, were Germany (up 820,000), France (up 450,000), Italy (up 240,000), the UK (up 210,000) and Poland (up 140,000). In addition to the direct-to-home audience, the Astra signal is received by 49 million cable households in Europe. The total Astra audience reached 77.0 million homes, representing 46 per cent of all European TV homes.

Investment analysts at Morgan Stanley Dean Witter, in a report issued prior to SES’ interim results, said that despite AsiaSat’s recent "disappointing results" the bank maintained a "strong buy" recommendation on SES stock, which it valued at Euro167, well ahead of the past 52 weeks’ range for SES of Euro110-157. "We continue to believe that the stock should, in fact, trade at a premium to PanAmSat given its more conservative accounting principles and higher earnings visibility," said Morgan Stanley’s senior analyst Rebecca Winnington-Ingram.