2018 Annual Report

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2018 Annual Report FINANCIAL HIGHLIGHTS 2018 2017 Change Revenue and Prot Attributable to Equity Holders of the Company Performance Revenue (Continuing operations) (Loss)/earnings per share HK$(0.45) HK$0.56 N/A Prot Attributable to Equity Holders of the Company Adjusted earnings per share§ HK$0.69 HK$0.56 24% 6,000 Dividends per share 5,000 - 2017 first interim dividend – HK$0.60 - 2018 interim dividend/ 2017 second interim dividend HK$0.30 HK$0.30 4,000 - Final dividend HK$0.70 HK$0.30 HK$1.00 HK$1.20 3,000 HK$’ million HK$’ - 2017 special dividend – HK$0.70 2,000 HK$’mil HK$’mil 1,000 Revenue from external customers - Hong Kong TV broadcasting 2,923 2,818 4% 0 - myTV SUPER 402 280 43% 2014 2015 2016 2017 2018 § - Big Big Channel business 87 44 98% YEAR - Programme licensing and distribution 870 955 -9% - Overseas pay TV and TVB Anywhere 140 151 -7% Earnings & Dividends# Per Share - Other activities 55 88 -38% Earnings per Share 4,477 4,336 3% Dividends# per Share 3.5 HK$’mil HK$’mil Segment profit/(loss)* 3 - Hong Kong TV broadcasting 173 165 5% 2.5 - myTV SUPER 16 (85) N/A - Big Big Channel business (19) (11) 78% 2 - Programme licensing and HK$ 1.5 distribution 414 504 -18% - Overseas pay TV and TVB Anywhere (16) (53) -71% 1 - Other activities (17) 6 N/A # 0.5 - Corporate support (129) (152) -16% 422 374 13% 0 2014 2015 2016 2017 2018 § ∆ YEAR Total expenses 4,062 3,946 3% # excluding special dividend (Loss)/profit attributable to equity holders (199) 243 N/A Adjusted profit attributable to equity holders§ 301 243 24% 2018 Revenue from External Customers by Operating Segment 31 December 31 December % relating to 2017 are shown in brackets 2018 2017 HK$’mil HK$’mil Hong Kong TV broadcasting Total assets 10,256 12,016 -15% 65% (65%) Total liabilities 3,949 4,859 -19% Total equity 6,307 7,157 -12% Programme Number of issued shares 438,000,000 438,000,000 – licensing and distribution 19% (22%) Ratios Current ratio 5.9 9.2 Other activities Gearing 29.1% 41.7% 2% (2%) * excluding non-recurring items # Big Big comprised mainly of interest costs of TVB Notes Overseas pay TV myTV SUPER ∆ Channel represented the total of cost of sales, selling, distribution and transmission costs and general and administrative and TVB Anywhere 9% (7%) expenses 3% (3%) business 2% (1%) § excluding impairment charge/loss against SMI Bonds after making impairment charge/loss of HK$500 million CONTENTS 2 CORPORATE INFORMATION 12 CHAIRMAN’S STATEMENT 14 GROUP CEO’S REPORT REVIEW OF OPERATIONS 18 Hong Kong TV Broadcasting 36 myTV SUPER 40 Big Big Channel Business 46 Programme Licensing and Distribution 48 Overseas Operations – OTT and Pay TV ENVIRONMENTAL, SOCIAL AND 51 GOVERNANCE REPORT 64 FINANCIAL REVIEW CORPORATE GOVERNANCE 70 Directors and Senior Management 76 Report of the Directors 94 Corporate Governance Report FINANCIAL INFORMATION 116 Five-Year Financial Review 117 Independent Auditor’s Report 124 Audited Financial Statements Television Broadcasts Limited Annual Report 2018 1 CORPORATE INFORMATION CHAIRMAN EMERITUS NOMINATION COMMITTEE The late Sir Run Run SHAW GBM Dr. Raymond OR Ching Fai Chairman Anthony LEE Hsien Pin Dr. William LO Wing Yan BOARD OF DIRECTORS Dr. Allan ZEMAN CHAIRMAN RISK COMMITTEE Dr. Charles CHAN Kwok Keung Dr. William LO Wing Yan Chairman VICE CHAIRMAN Mark LEE Po On LI Ruigang CHEONG Shin Keong Dr. Raymond OR Ching Fai EXECUTIVE DIRECTORS Professor Caroline WANG Chia-Ling Mark LEE Po On Group Chief Executive Officer CHEONG Shin Keong General Manager INVESTMENT COMMITTEE Thomas HUI To Dr. Raymond OR Ching Fai Chairman Anthony LEE Hsien Pin NON-EXECUTIVE DIRECTORS Thomas Hui To Dr. Charles CHAN Kwok Keung Adrian MAK Yau Kee Chief Financial Officer and LI Ruigang Company Secretary Anthony LEE Hsien Pin CHEN Wen Chi SENIOR MANAGEMENT INDEPENDENT NON-EXECUTIVE DIRECTORS Mark LEE Po On Group Chief Executive Officer Dr. Raymond OR Ching Fai SBS, JP CHEONG Shin Keong General Manager Dr. William LO Wing Yan JP Desmond CHAN Shu Hung Deputy General Manager Professor Caroline WANG Chia-Ling (Legal and International Operations) Dr. Allan ZEMAN GBM, GBS, JP Felix TO Chi Hak Deputy General Manager (Programme and Production) Adrian MAK Yau Kee Chief Financial Officer and BOARD COMMITTEES Company Secretary EXECUTIVE COMMITTEE Dr. Charles CHAN Kwok Keung Chairman COMPANY SECRETARY Mark LEE Po On Adrian MAK Yau Kee CHEONG Shin Keong Email: [email protected] Thomas HUI To Fax: +852 2358 1337 CHEN Wen Chi AUDIT COMMITTEE REGISTERED OFFICE Dr. William LO Wing Yan Chairman TVB City, 77 Chun Choi Street Anthony LEE Hsien Pin Tseung Kwan O Industrial Estate Dr. Raymond OR Ching Fai Kowloon, Hong Kong Professor Caroline WANG Chia-Ling REMUNERATION COMMITTEE Dr. Raymond OR Ching Fai Chairman Dr. Charles CHAN Kwok Keung Dr. William LO Wing Yan 2 Television Broadcasts Limited Annual Report 2018 AUDITOR AMERICAN DEPOSITARY RECEIPTS PricewaterhouseCoopers BNY Mellon Shareowner Services 22/F, Prince’s Building P.O. Box 30170 Central, Hong Kong College Station TX 77842-3170 USA LEGAL ADVISER Freshfields Bruckhaus Deringer INVESTOR RELATIONS 55/F, One Island East, Email: [email protected] Taikoo Place Quarry Bay, Fax: +852 2358 1337 Hong Kong Stephenson Harwood WEBSITE 18/F, United Centre www.corporate.tvb.com 95 Queensway, Hong Kong CORPORATE CALENDAR PRINCIPAL BANKERS Shanghai Commercial Bank Limited FOR TELEVISION BROADCASTS LIMITED SHAREHOLDERS Bank of Communications Co., Ltd. Hong Kong Branch Standard Chartered Bank (Hong Kong) Limited FIRST BOOK CLOSE PERIOD The Hongkong and Shanghai Banking 24 April 2019 to 22 May 2019, Corporation Limited both days inclusive Chong Hing Bank Limited UBS AG ANNUAL GENERAL MEETING 22 May 2019 SHARE REGISTRAR AND TRANSFER EX-DIVIDEND DATE OF 2018 FINAL DIVIDEND OFFICE 24 May 2019 Computershare Hong Kong Investor Services SECOND BOOK CLOSE PERIOD Limited 28 May 2019 to 30 May 2019, Shops 1712-1716, 17th Floor both days inclusive Hopewell Centre 183 Queen’s Road East PAYMENT OF 2018 FINAL DIVIDEND* Wan Chai, Hong Kong 11 June 2019 * Subject to Shareholders’ approval at 2019 annual general meeting of the Company STOCK CODES FOR HOLDERS OF US$500,000,000 AGGREGATE TVB Ordinary Shares PRINCIPAL AMOUNT OF 3.625 PERCENT The Stock Exchange of Hong Kong: 00511 GUARANTEED NOTES DUE 2021 ISSUED BY TVB Reuters: 0511.HK FINANCE LIMITED Bloomberg: 511 HK INTEREST PAYMENT FOR 2019 TVB ADR Level 1 Programme: TVBCY 1st interest payment: 11 April 2019 2nd interest payment: 11 October 2019 TVB Finance Guaranteed Notes The Stock Exchange of Hong Kong: 04577 MATURITY DATE ISIN: XS1495978329 11 October 2021 Common Code: 149597832 Television Broadcasts Limited Annual Report 2018 3 MILESTONES 1967 1971 Obtained a Broadcasting Licence in September Launched the first color production and commenced free-to-air broadcasting on Enjoy Yourself Tonight (EYT) 19 November as the first wireless commercial television in Hong Kong. Headquartered on Broadcast Drive, Kowloon 1973 Organised the first Miss Hong Kong Pageant which has since become an iconic annual event 1976 1980 1981 1984 Began programme licensing, Sir Run Run Shaw, G.B.M., Adopted a programming HK-TVB was listed on HKSE video rental business and one of the founders of strategy of broadcasting operation of cable and the Group, became 2.5 hours of drama serials Commenced cable TV satellite television channels Chairman of the on Jade during weekday services in Los Angeles in overseas markets Board of Directors prime time to build for subscribers in the USA viewership momentum and hype its drama serials 1988 1993 1994 1997 Television Broadcasts Launched TVBS Launched The Launched the Company’s (TVB) became the Channel (TVBS), Chinese first website tvb.com listed parent company its first satellite TV Channel (TCC), carrying information on of the Group after a service in Taiwan a London-based the station’s programmes group reorganisation satellite TV service and artistes for the European markets 4 Television Broadcasts Limited Annual Report 2018 1998 2003 2004 2007 Launched TVBJ, Moved Commenced a pay TV Launched digital its first satellite headquarters business in Hong Kong terrestrial television TV service in to TVB City in under the name of exTV, broadcasting in Hong Kong Australia Tseung Kwan O a joint venture of TVB from 31 December which Industrial Estate and Intelsat expanded the number of with a total channels from two building area Granted Guangdong (Jade and Pearl) to the of 110,000 Landing Rights for present five channels square meters distribution of Jade and Pearl channels in the Guangdong Province 2008 2011 2012 2015 Adopted high definition Young Lion Holdings, Sir Run Run Shaw Dr. Charles Chan became broadcasting and 5.1 acquired a 26% retired as Chairman Chairman of TVB Dolby Surround Sound shareholding in TVB from and was honoured on HD Jade channel Shaw Brothers (Hong Kong) as Chairman Emeritus Exited Taiwan operations by way of two transactions Launched myTV Dr. Norman Leung – first transaction in mobile application in became Executive January 2015 sold 53% of Hong Kong, then followed Chairman of TVB Liann Yee Production by TVB News, TVB Finance Company and the second and TVB Zone app transaction in March 2016 sold the remaining interest 2016 2017 2018 Launched OTT service, myTV SUPER, Launched Big Big Channel, TVB’s social media app Inaugurated Big Big Shop, an in Hong Kong and enhanced version carrying self-produced short formatted content e-shop platform, adopting a of TVB Anywhere in overseas markets “showing on TV, selling in Big Formed a US$100 million partnership with Imagine Big Shop” model to market Co-invested with China Media Capital, Entertainment for development and production of advertiser-sponsored products TVB takes up 11.98% effective interest a US drama slate on prime time shows and in Hong Kong listed Shaw Brothers execute online orders in e-shop Holdings (stock code: 00953) for movie Celebrated 50th anniversary of broadcasting in production and investments Hong Kong.
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