APT Satellite : 2017 Interim Results Announcement

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(Incorporated in Bermuda with limited liability)

(Stock code: 1045)

2017 INTERIM RESULTS ANNOUNCEMENT CHAIRMAN'S STATEMENT

The Board of Directors (the "Board") of APT Satellite Holdings Limited (the "Company") is pleased to announce the unaudited interim results of the Company and its subsidiaries (the "Group") for the six months ended 30 June 2017.

This interim result has been reviewed by the Company's Audit and Risk Management Committee and independent auditors.

INTERIM RESULTS

For the first half year of 2017, the Group's revenue amounted to HK$598,881,000 (six months ended 30 June 2016: HK$603,467,000), representing 0.8% decrease as compared with corresponding period in the previous financial year. Profit attributable to equity shareholders amounted to HK$241,951,000 (six months ended 30 June 2016: HK$242,120,000) representing 0.1% decrease as compared with corresponding period in the previous financial year. Basic earnings per share and diluted earnings per share were HK25.99 cents (six months ended 30 June 2016: HK25.96 cents).

For the first half year of 2017, the Group's satellites maintained relatively high utilisation rates. The Group recorded a slight decrease in revenue during the first half year. However, due to oversupply of transponders in the market, the Group continued to sustain transponder price downward pressure. The increase of loss on changes in fair value of financial instruments for the period has also led to a slight decrease in profit attributable to equity shareholders.

INTERIM DIVIDEND

The Board has resolved to declare an interim dividend of HK3.50 cents per ordinary share for the six months ended 30 June 2017 (six months ended 30 June 2016: HK3.50 cents per ordinary share). The details of interim dividend of the Group are set out in note 6 of this announcement.

The interim dividend will be paid on or about Thursday, 19 October 2017 to shareholders whose names appear on the register of members at the close of business on Tuesday, 3 October 2017.

* For identification purpose only

BUSINESS REVIEW In-Orbit Satellites

During the first half year of 2017, the Group's in-orbit satellites and their corresponding ground TT&C (telemetry, tracking and command) systems and earth station have been operating under normal condition and continue to provide reliable and high quality services to the Group's customers. As at 30 June 2017, the total transponder utilisation rate of the Group's satellites was 67.4%, representing a decrease of 2.1 percentage points as compared with the total transponder utilisation rate at the end of 2016.

The Group's in-orbit satellites, namely, APSTAR-5, APSTAR-6, APSTAR-7 and APSTAR-9, have integrated to form the super wide and strong satellite service capability provided to Asia, Australia, Middle East, Africa, Europe, and the Pacific region, covering more than 75% of the world's population.

APSTAR-5 Satellite

APSTAR-5, positioned at 138 degree East geostationary orbital slot, with footprints covering the regions in Asia, Australia, New Zealand, Pacific Islands and Hawaii. The Group holds 20 C-band transponders and 9 Ku-band transponders of this satellite. The Group has commissioned APSTAR-5C as the replacement satellite programme for APSTAR-5.

APSTAR-6 Satellite

APSTAR-6, positioned at 134 degree East geostationary orbital slot, is equipped with 38 C-band transponders and 12 Ku-band transponders with footprints covering the regions in Asia, Australia, New Zealand, Pacific Islands and Hawaii. The Group has commissioned APSTAR-6C as the replacement satellite programme for APSTAR-6.

APSTAR-7 Satellite

APSTAR-7, positioned at 76.5 degree East geostationary orbital slot, is equipped with 28 C-band transponders and 28 Ku-band transponders with footprints covering the regions in Asia Pacific region, Middle East, Africa and Europe.

APSTAR-9 Satellite

APSTAR-9, positioned at 142 degree East geostationary orbital slot, is equipped with 32 C-band transponders and 14 Ku-band transponders with footprints covering the regions in Asia, Australia, New Zealand, Pacific Islands and Hawaii.

Future Satellites

APSTAR-5C Satellite

On 23 December 2015, APT Satellite Company Limited ("APT HK"), a wholly-owned subsidiary of the Group, entered into a Satellite Transponder Agreement with Telesat International Limited, a wholly-owned subsidiary of Telesat Canada, in relation to the whole lifetime leasing of approximately 36.204 transponders representing approximately 57.47% of the total transponders capacities on APSTAR-5C.

APSTAR-5C is the replacement satellite for APSTAR-5. It is important for the Group to develop and launch APSTAR-5C, in replacing the in-orbit satellite APSTAR-5, for the continuity of the business and sustaining reliable services to existing APSTAR-5 customers. APSTAR-5C is scheduled to replace APSTAR-5 in the second half of 2018, which will carry additional transponders in expanded coverages, including satellite payload with regional high throughput capacities to satisfy future market demand so as to maintain the competitive edge of the Group.

APSTAR-6C Satellite

On 17 October 2015, APT HK entered into a Satellite Contract with China Great Wall Industry (Hong Kong) Corp. Limited, a wholly-owned subsidiary of China Great Wall Industry Corporation, including the manufacturing, launching and delivery of APSTAR-6C. The satellite, which is based on a DFH-4 series platform having 26 C-band transponders, 19 Ku-band/Ka-band transponders, is a high power geostationary communications satellite. APSTAR-6C is the replacement satellite for APSTAR-6 and is scheduled to be launched in the first half of 2018.

APSTAR-6D Satellite

The Group has been actively looking for opportunities to improve the Group's market competitiveness. On 23 July 2016 and 12 August 2016, the Group entered into an investors' agreement and a supplemental agreement respectively with the Chinese investors to jointly develop the high-throughput satellite business in Asia Pacific region and Mainland China. The Group committed to invest RMB600 million in the joint project, which represents 30% interest in the joint project. APSTAR-6D project is an advanced broadband satellite communication system in China and adjacent region, and is scheduled to be launched in 2019.

The Group develops and launches new satellites built with the latest advanced technology and versatile footprint coverage to replace the existing satellite in order to maintain business continuity of the Group's customers and to enhance its edge in market competition over the region and to tap business growth with both conventional and high throughput transponder capacities.

Transponder Lease Services

During the first half year of 2017, amid the fierce market competition due to oversupply situation in transponder market has resulted in the significant pressure in the transponder utilisation rate and the transponder lease price. As at 30 June 2017, the Group's satellites overall average transponder utilisation rate achieved 67.4% representing approximately a decrease of 2.1 percentage points and the revenue of core business decreased by 0.7%. The Group has maintained satisfactorily high utilisation rates which ensure promising contribution for continuous profitability.

Satellite TV Broadcasting and Uplink Services, Satellite-based Telecommunication Services and Data Centre Services

With the Non-domestic Television Programme Service Licence, the Unified Carrier Licence and the satellite earth station facilities and data centre facilities, the Group will continue to expand the scope of services and provide customers with satellite TV broadcasting and uplink services, satellite telecommunication services and data centre services, to achieve excellent synergic effects.

BUSINESS PROSPECTS

Looking forward to the whole year of 2017, the oversupply situation of the global transponder market will continue. The market competition of the satellite industry will be fierce and subject to price downward pressure. Nevertheless, the transponder utilisation rates of the Group's satellites, APSTAR-5, APSTAR-6, APSTAR-7, and APSTAR-9, as the premium satellite resources, will continue to be at satisfactorily high level, which will strengthen the Group's ability of sustained and stable growth.

FINANCE

As at 30 June 2017, the Group's financial position remains very strong. Please refer to financial section for detailed analysis.

CORPORATE GOVERNANCE

The Group commits to a high standard of corporate governance especially in internal control and compliance; adheres to the business code of ethics, which are applicable to all directors, senior management, and all employees; implements whistleblower protection policy, as well as advocates environmental awareness.