Set top box business continues to accelerate with improved results HONG KONG, Sept. 15 /Xinhua-PRNewswire/ -- DVN (Holdings) Limited ("DVN", HKEx: 500) today reports a 44% year-on-year increase in turnover growth. This reflects 317% growth in the number of set top boxes ("STB") that DVN produced and licensed, amounting to a total of 346,953 units during the period. DVN is increasing licensing revenues and gradually shifting away from STB manufacturing to higher margin solutions design and software development. Apart from sales of STBs, the licensing arrangements have stimulated greater unit sales, and new revenues were generated from the sale of STB components. During the first half of 2005, DVN's gross profit increased 32% to HK$23.73 million and the net loss was further narrowed by 24% to HK$15.62 million. The improvement in earnings was also attributable to DVN's efforts to reduce STB costs by about 5% in the period. The Company did not recommend the payment of a dividend for the six months ended June 30, 2005. Mr Terry Lui, CEO of DVN, remarked: "The positive trend in revenues and gross profits indicate that DVN is on a path to profitability. With STB sales likely to accelerate and as our business continues to shift to higher margin value-added operations, DVN is optimistic that its financial outlook will continue to improve." Number of STB sold in 1H2005 surged 317% year on year DVN remains the market leader for digital STBs in Mainland China. The sales of its own branded and licensed STB continued to accelerate as migration of China's cable television system to digital was witnessed. During the first half, the number of DVN produced and licensed STB increased 317% to 346,953 units. STB sales were particularly strong in Qingdao and Foshan. During the first half, DVN won a contract to provide digital services to the Guangxi Province. SARFT (China's State Administration for Radio, Film and Television) approved on April 7, 2005 the designation of Guangxi as the country's first and only provincial trial site. With this designation, Guangxi plans to cut off its analog TV signal in phases to its 3 million cable subscribers. DVN is able to generate revenues from licensing fees on the estimated 3 million DVN designated STBs to be sold in the province, from the provision of systems software and the related services as the migration rolls out, and from sharing of revenues generated from TV-commerce, interactive games, e-government, TV SMS and other value-added services. DVN is Guangxi TV Network's sole technology partner. Over the next several months, Qingdao and Foshan will continue their aggressive rollouts as they cut off the analog service to their users to achieve a full digitization of TV broadcasting, enabling DVN to introduce revenue generating services such as television email and interactive advertising services. DVN expects to introduce some of these services on an experimental basis in the second half. The Company anticipates an additional stream of recurrent income from the future launch of value-added services. DVN aims for mass sales through licensing of technology DVN has entered into STB licensing agreements with such major manufacturers as Haier, Hisense, TCL, Konka and Huawei to gain access to a much broader market. Moreover, with the licensing partners taking on the manufacturing, DVN is better able to make more effective use of its working capital. In the first half of 2005, DVN received HK$4.9 million in licensing fees through this arrangement. In addition, DVN sells STB components to these manufacturers to ensure the quality of products. Its component revenues therefore rose 6 times to HK$3.270 million in the period. With the model shifting away from STB manufacturing, DVN stays focused on STB design and application software development. As sales are significantly boosted, the licensing model is expected to generate increased long term profits for DVN. DVN promotes Motorola branded STB Following Motorola's additional investment in DVN at the beginning of this year, a new Motorola STB, designed in cooperation with DVN, is ready for production. Motorola will handle the manufacturing costs. DVN believes the new Motorola box will appeal to subscribers seeking a quality, brand name box with more features. Financial Highlights Six months ended June 30, 2005 2004 HK$'000 HK$'000 Turnover 85,537 59,366 Gross profit 23,733 18,003 Loss attributable to ordinary shareholders (15,615) (20,444) Loss per share - basic (HK$0.03) (HK$0.04) About DVN DVN (Holdings) Limited (SEHK:500) is the largest digital TV broadcasting systems integrator and terminal products provider in China. It operates R&D and after-sales services centres in Hong Kong, Shenzhen, Shanghai and Suzhou. It has so far installed more than 40 digital broadcasting systems in all 26 provinces, with its patented products extensively deployed. On the back of its digital TV broadcasting platform, the company is now seeking to develop and roll out a range of value-added solutions, including e-government, TV commerce, online games and TV SMS services. DVN's STB is well recognized in China for its quality and extensive usage. A nationwide survey report conducted by the Academy of Broadcasting Science, SARFT of China in 2002 ranked it the most widely adopted STB by TV operators in the country. As of August 2005, the Group has sold accumulatively 1.01 million STBs (including licensed production) in China, making it the leading digital TV technology provider in the country. In 2004, DVN received the "Best Set Top Box" award in the first Digital TV Public Survey, as well as a "Top Quality Brand" honour in the STB category in the first China Consumer Products Quality Survey. In 2005, DVN was further named by SARFT as one of the country's "Top Ten Broadcasting Enterprises". Based in Hong Kong and listed on the Stock Exchange of Hong Kong in 1989, DVN has been operating in the technology sector since 1982. For further information, please contact: DVN (HOLDINGS) LTD Susanna Chiu Tel: (852)2585 7295 / Fax: (852)2511 5522 E-mail: / Web-site: http://www.dvnholdings.com/ t6.communications limited Jenny Lee or Angus Ho Tel: (852)2511 8388 / Fax: (852)2511 8238 DATASOURCE: DVN (Holdings) Limited CONTACT: Susanna Chiu, DVN (HOLDINGS) LTD, +852-2585-7295, Fax: +852-2511-5522, , ; Jenny Lee or Angus Ho, t6.communications limited, +852-2511-8388, Fax: +852-2511-8238

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