NDS reports mixed results

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NDS, the digital pay-TV technology subsidiary of Rupert Murdoch's News Corp, posted a second-quarter net profit of E7million – almost identical to the same period a year ago. Revenues for the quarter were E65 million and E138 million for the half year to December 31. This is 17 per cent lower and 18 per cent lower, respectively, than the equivalent periods in the previous year.

The company said that the fall on its first-half revenues was in part due to the expiry of its contract to supply smart cards for DirecTV, the US's largest satellite TV operator. "Last year, we shipped substantial volumes of smart cards to DirecTV for their card changeover; since the expiration of our contract with DirecTV in August, there have been no card sales," the company said.

The company also attributed the decline in overall revenues to the current weakness in the US Dollar, as approximately 49 per cent of its revenues in the period were denominated in US Dollars.

Net subscriber additions were up over the six months by 3.6 million, making a total subscriber base of 38 million, including over 1 million in Korea. Commenting on NDS's performance, Dr. Abe Peled, President and CEO, said: "I am pleased to be able to report that we have maintained the momentum from Q1 and have continued to deliver solid growth in Q2. North America is now beginning to show results and this quarter we are happy to announce wins with America's largest over-builder, RCN, that includes both our middleware, NDS Core, and our conditional access. Cablevision, launched a new high-definition service, VOOM, last year, and NDS is providing conditional access and certain other key technologies".

In December 2003 the company completed the acquisition of the MediaHighway business from Thomson and it is in the process of integrating this business into its organisation. Additionally NDS said it is planning the evolution of the MediaHighway product to increase the range and depth of functionality in set-top box middleware which it offers to broadcast platform operators around the world.

CFO Rick Medlock, said: "NDS is currently in a phase of investment; the acquisition of MediaHighway brings great technology and talent into NDS, further strengthening our product portfolio. At the same time, we are making further significant investments to support our existing customers and prospects. It is extremely encouraging that we have been able to make these investments with minimal impact on our financial performance, and out of existing cash resources".