Sky Reports Growth In 2005 Half Year Results

MEDIA RELEASE

21 February 2005

SKY TELEVISION REPORTS
GROWTH IN 2005 HALF YEAR RESULTS

SKY Television announced today an improvement in financial performance with a net profit after tax of $48.7 million for the six months to 31 December 2004, an increase of $36.3 million on the comparative interim period.

Total revenue increased by 12.6% to $238.7 million compared to the same period last year. The average monthly revenue per subscriber increased by 3.8% and advertising revenue continued to grow, up 40% to $16.3 million over the same period.

Operating costs increased by 3.4% to $126.2 million and earnings before interest and tax (EBITDA) increased by $22.5 million to $112.5 million.

Free cash flow, the difference between operating and investing cash flows, was $70.5 million during this period. SKY’s subscriber base continued to grow, with an increase of 11,979 subscribers since 30 June 2004. This is an increase on the 5,150 net gain reported in the same period last year.

Churn, a measure of subscribers who disconnect their service, remained low with gross churn reducing to 16.4% from 17.1% at 30 June 2004.

The amount of time subscribers spend watching SKY channels has continued to increase. Most of the increase in viewing is occurring on SKY’s basic channels. Programming costs as a percentage of revenue fell to an all time low of 36.5% of revenue, down from 39.9% for the comparative sixmonth period.

Since 31 December 2004 subscriber growth has continued to improve. As of yesterday, the subscriber count reached a new high of 590,777.

The SKY board has resolved to pay a fully imputed dividend of 12.5 cents per share. A supplementary dividend of 2.21 cents per share will be paid to non-resident shareholders. The record date for payment of the dividend is 4 March 2005 and the payment will be made on 11 March 2005.

SKY’s long-term dividend policy is being considered as part of the merger discussions with INL. These discussions are continuing but no future announcements can be made at the current time.

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