2017 Interim Results2 August 2017

i-CABLEii--CABLECABLECommunications Communications LimitedLimited

2

Results Highlights

• The Group’s financial performance in the first half of 2017 was seriously affected by the decline of advertising & subscription revenues, partly due to the prolonged uncertainties about the Group’s future since early March

• The advertising market remained quite weak generally & was exacerbated by competition from free TV, digital & OTT platforms. On the subscription business front, contraction of customer baseremained but ARPU continued to improve

• Fantastic TV launched its Cantonese channel in May & is adopting an incremental initial approach to the market

3

Results Highlights

• In April 2017, the Group proposed an Open Offer, underwritten byForever Top (Asia) Limited & a Loan Capitalisation to raise about HK$1 billion of new equity. All major regulatory hurdles have been cleared

• New equity is expected to be injected by September 2017 to address uncertainties about the Group’s funding

• Upon the close of the Open Offer & the completion of the Loan Capitalisation, Forever Top (Asia) Limited will become the Controlling Shareholder

• In May 2017, the Group accepted renewal of its Pay TV Licence for a period of 12 years until 31 May 2029. Its Unified Carrier Licence is valid until 17 January 2030 & Fantastic TV’s Free TV Licence until 30 May 2028

4

Subscription Services

• Subscription ARPU continued its growth trend, amidst continuing contraction of the customer base. Business initiatives are beinglaunched to contain customer attrition

• FANhub, launched in early 2016, is an enhanced Pay TV service with a full featured, “video-on-demand”, interactive HD (high definition) set top box to enrich customer experience. Our marketing team is promoting this service to facilitate customer retention, acquisition as well as upselling & the take up rate had met our expectations

• It has always been our aim to offer distinct & premium service to our customers. The enriched HD channels & enhanced i-CABLE App would meet different customers’ expectations & drive new revenue

Television

5

Fantastic TV

• Fantastic TV launched its Cantonese channel in May 2017. This marked a significant milestone in our history since the launch of pay TV services in October 1993

• The channel covers 2.35M homes, equivalent to 95% coverage & broadcast more than 4,500 hours a year of quality self-produced & acquired programmes. It targets to bring family members togetherto watch their favorite programmes, including entertainment & variety, drama, lifestyle, kids, finance, news, current affairs, art & culture

• It is adopting an incremental initial approach to the market. Bypooling creative, production as well as network expertise, we would more effectively build scale in programming & in airtime sales, as well as gain more buying & selling power, more operational efficiency & access to a bigger pool of talents & new ideas

6

Television

• The prolonged uncertainties about the Group’s future since early March & the weak advertising market led to the decline of advertising & subscription revenue

2017

HK$M 1H 2H 1H vs 1H16

Turnover 526 517 471 - 11%

Opex before dep’n (570) (615) (590) 3%

EBITDA (44) (98) (119) 171%

Depreciation (69) (66) (66) - 4%

Operating Profit / (Loss) (113) (165) (185) 64%

EBITDA Margin - 8% - 19% - 25%

Operating Margin - 21% - 32% - 39%

2016

7

Programming

HD Entertainment• Our self-produced entertainment programmes were repositioned to focus on

local & international entertainment news, to boost viewing convenience & foster relationships with different partners in the entertainment industry

• We offered a wide range of movie choices with emphasis on local market flavor. We provided not only mass appealing but also critically acclaimed movies to subscribers

8

• Cable News was ranked the #1 news & finance channel in the Appreciation Index for the first two quarters of 2017

• It also received two 37th Annual Telly Awards, five HSMC Business Journalism Awards & two 16th Consumer Rights Reporting Awards

Programming

HD News & HD Finance Info

9

Programming

HD Sports

10

Fantastic TV

11

CABLE TV1 46%

Others 5%

TVBNV4 3%

Now TV3 4%

TVB2

44%

CABLE TV Now TV*

Source: Nielsen (Jan – Jun 2017)All Individuals aged 4+All Day All Time

Source: Nielsen (Jan – Jun 2017)CABLE TV Subs aged 4+, All Day All Time

1 Overall CABLE TV (STB & SMATV) included Fantastic TV via HKC STB2 Included TVB Jade (Analog+DTT81), TVB-J2, TVB-iNews, TVB Pearl

(Analog+DTT84), TVB J53 Included all TVBNV channels via Now TV STB4 Excluded all TVBNV channels via Now TV STB. Ratings of TVBNV was suspended effective from 1 Apr 2017, share under “2017 Jan-Jun” was average of 2017 Jan-Mar

TV Share Among CABLE TV Subs aged 4+

Viewership

50%

27%

15%

7%

0%

10%

20%

30%

40%

50%

60% 58%

37%

9%

TVBNV^

Overall CABLE TV (STB & SMATV) included Fantastic TV via HKC STB* Included all TVBNV channels via Now TV STB^ Excluded all TVBNV channels via Now TV STB. Ratings of TVBNV was suspended

effective from 1 Apr 2017, share under “2017 Jan-Jun” was average of 2017 Jan-Mar

Viewing Share Among Pay TV Operators

12

Customers

June 2017December 2016

Television

Broadband

Telephony

889,000

153,000

95,000

909,000

156,000

95,000

13

• Network enhancement to higher-speed broadband GPON service was progressing on track. The faster & more reliable broadband service would strengthen our competitiveness

Subscription Services

Internet & Multimedia

14

Internet & Multimedia

• Broadband revenue stabilized but higher network related cost lowered operating margin

2017

HK$M 1H 2H 1H vs 1H16

Turnover 168 167 162 - 4%

Opex before dep’n (97) (100) (109) 12%

EBITDA 71 67 54 - 25%

Depreciation (39) (38) (37) - 5%

Operating Profit 32 30 16 - 49%

EBITDA Margin 42% 40% 33%

Operating Margin 19% 18% 10%

2016

15

• Net loss was HK$141 million after recognition of HK$82 million of profit on sale of surplus properties

Consolidated Results

2017

HK$M 1H 2H 1H vs 1H16

Turnover 710 696 641 - 10%

Opex before dep’n (734) (770) (759) 3%

EBITDA (24) (74) (118) 393%

Depreciation (109) (105) (104) - 4%

Operating Profit / (Loss) (133) (179) (222) 67%

Finance Costs & Others (3) (3) 78

Profit / (Loss) before taxation (135) (182) (144) 6%

Taxation 1 4 2 248%

Net Profit / (Loss) (135) (178) (141) 5%

Capex 110 128 109

2016

16

Adjusted EBITDA

Segmental Breakdown

• Adjusted EBITDA is calculated by adding amortisation of programming library & impairment losses on programming library to Reported EBITDA

Total% of Total Revenue 1H16 1H17

EBITDA (44) (119)

Adjusted

EBITDA(1) (71)

Inte

rne

t &

Mu

ltim

ed

ia

EBITDA 71 54

EBITDA (51) (52)

Adjusted

EBITDA(41) (51)

28 (68)T

ele

vis

ion

Oth

er

& In

ter-

Se

gm

en

t

Elim

ina

tio

n

Total Adjusted EBITDAReported Adjustment

(HK

$m

)

4% -11%

52

50

(24)

(118)

28

(68)

1H16 1H17

17

• Higher network related cost mainly due to a provision for Government rent recently assessed on in-building wiring network

Operating Expenses

2017

HK$M 1H 2H 1H vs 1H16

Programming 424 446 437 3%

Network 104 105 122 17%

Selling, CS, G&A 163 177 161 - 1%

Cost of Sales 42 43 38 - 10%

Sub-total 734 770 759 3%

Depreciation 109 105 104 - 4%

Total 843 875 863 2%

2016

18

Outlook

• In April 2017, the Group proposed an Open Offer, underwritten byForever Top (Asia) Limited to raise about $704 million (before expenses) & a Loan Capitalisation in the amount of HK$300 million

• New equity is expected to be injected by September 2017, to address uncertainties about the Group’s funding. Upon the close of the Open Offer & completion of the Loan Capitalisation, Forever Top (Asia) Limited will become the Controlling Shareholder

• In May 2017, the Group accepted renewal of its Pay TV licence for a period of 12 years until 31 May 2029. Its Unified Carrier Licence is valid until 17 January 2030 & Fantastic TV’s Free TV Licence until 30 May 2028

19

Outlook

• Initiatives to contain costs have been more effective than those to improve revenues. More initiatives will be introduced in the rest of 2017. They may or may not produce the results that we need but we will keep the momentum to transform the Group into a more robust business

• Against that backdrop, the Group will exercise additional prudence in continuing to invest in programming, content enrichment, HD/OTT upgrades, customer service improvement, GPON for higher speed broadband service & new businesses, as well as new marketing & media initiatives to sharpen our competitiveness

i-CABLE Communications LimitedHKSE Stock Code: 1097.HK

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included herein constitute i-CABLE’s judgment as of the date hereof & are subject

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