i-CABLE COMMUNICATIONS LIMITED
Stock Code: 1097
Third Quarterly Results
for the nine months ended September 30, 2007

Results Highlights

• Turnover decreased by 8% to HK$1,748 million (2006: HK$1,910 million).

• Net profit after tax increased by 6% to HK$155 million (2006: HK$147 million).

• Capital expenditure decreased by 26% to HK$131 million (2006: HK$178 million).

Pay TV

• Subscribers increased by 7% to 845,000 during the nine-month period.

• Turnover decreased by 16% to HK$1,212 million (2006: HK$1,440 million).

• Operating profit decreased by 30% to HK$132 million (2006: HK$190 million).

Internet & Multimedia

• Broadband subscribers decreased by 3% to 316,000 during the nine-month period.

• Turnover decreased by 1% to HK$442 million (2006: HK$445 million).

• Operating profit increased by 25% to HK$132 million (2006: HK$105 million) to equal Pay TV.

GROUP RESULTS

The unaudited Group profit attributable to Shareholders for the nine months ended September 30, 2007 amounted to HK$153 million, as compared to HK$146 million for the corresponding period in 2006. Basic and diluted earnings per share were both HK$0.076 for 2007, as compared to both HK$0.072 last year.

MANAGEMENT DISCUSSION AND ANALYSIS

A. Review of results for the nine months ended September 30, 2007

The Group reported higher net profit during the first nine months ended September 30, 2007 on lower depreciation charges and tax provision. Profit after tax increased by 6% to HK$155 million.

Programming enhancement particularly in local production and effective subscriber acquisition and retention strategies have contributed to the rise of Pay TV subscriber base to 845,000 during the nine-month period.

Consolidated turnover decreased by 8% to HK$1,748 million, partly due to the absence of special events such as FIFA World Cup in 2006 and more competitive service packages. Revenue from new businesses such as film production and advertising in the Mainland tripled from a small base.

More effective cost management and resource redeployment helped to reduce operating costs before depreciation by 6% to HK$1,322 million. Programming costs decreased by 3%; network and other operating costs by 5%; and selling, general and administrative expenses by 15%.

Earnings before interest, tax, depreciation and amortisation ("EBITDA") decreased by 14% to HK$425 million.

Depreciation decreased by 13% to HK$282 million.

Profit from operations decreased by 16% to HK$144 million, while profit before tax decreased by 9% to HK$162 million. With lower tax provision during the period, profit after tax increased by 6% to HK$155 million.

Basic earnings per share were 7.6 cents as compared to 7.2 cents in 2006.

B. Segmental Information

Pay Television

Subscribers increased by 59,000 or 7% in the period to 845,000 as compared to 23,000 or 3% during the same period last year. However, turnover decreased by 16% to HK$1,212 million, mainly attributable to dilution from lower yield subscriptions and a return to normality for commercial airtime sales after FIFA World Cup 2006. Operating costs after depreciation decreased by 14% to HK$1,080 million due to decrease in programming costs, marketing and sales spending and depreciation charge. Operating profit decreased by 30% to HK$132 million (2006: HK$190 million).

Internet & Multimedia

The Broadband subscriber base was relatively stable at 316,000 in a mature marketplace; yield was also stable. Turnover was HK$442 million. Operating costs after depreciation decreased by 9% to HK$310 million partly due to lower depreciation charges. Operating profit increased by 25% to a record high of HK$132 million.

C. Liquidity and Financial Resources

As of September 30, 2007, the Group had net cash of HK$578 million, as compared to HK$369 million a year ago.

The consolidated net asset value of the Group as at September 30, 2007 was HK$2,320 million, or HK$1.1 per share. As at September 30, 2007, the Group had property, plant and equipment with a net book value of approximately HK$657,000 held under finance lease contract.

The Group's assets, liabilities, revenues and expenses were mainly denominated in Hong Kong dollars or U.S. dollars and the exchange rate between these two currencies has remained pegged.

Capital expenditure during the period amounted to HK$131 million, 26% lower than the same period last year. Major items included further network upgrade and expansion, investment in information systems, television production facilities and leasehold buildings.

The Group's further ongoing capital expenditure and new business development will be funded by cash generated from operations and, if needed, bank borrowings or other external sources of funds. The Group also had total short-term bank credit facilities of approximately HK$32 million which remained unutilised as of September 30, 2007.

D. Contingent Liabilities

At September 30, 2007, there were contingent liabilities in respect of guarantees, indemnities and letters of awareness given by the Company on behalf of subsidiaries relating to overdraft and guarantee facilities of banks up to HK$198 million, of which HK$166 million have been utilised by the subsidiaries.

E. Human Resources

The Group had a total of 2,918 employees at the end of September 2007 (2006: 3,177). Total gross amount of salaries and related costs incurred in the corresponding period amounted to HK$545 million (2006: HK$630 million).

The Group is committed to attracting, retaining and nurturing high quality employees, with pay for performance schemes, staff development programmes, and career advancement opportunities.

As a good employer, the Group not only takes care of employees' well being, including organising a variety of health talks, but also actively supports and participates in community and social welfare events with employees.

F. Operating Environment and Competition

The operating environment remained unfavourable as intensified competition continued to affect the Group's operating and financial performances during the period under review.

In response, on top of unbundling its Pay TV packages competitively, the Group also re-aligned its sales strategy and will be opening retails shops in popular areas of the territory to expand its sales coverage. In the meantime, customer service has been enhanced following the opening of our integrated customer service centre in Guangzhou.

The Broadband access service market is mature, returning stable revenue and profitability to the Group. Competition has shifted to service quality, after-sales service as well as value-added services. Pursuant to the acquisition of new media exhibition rights for the Beijing Olympics next year, the Group has started to prepare for full exploitation of the rights to maximise its business and other potential values.

G. Outlook

The operating environment in the near and medium term will continue to be challenging with the imminent launch of digital terrestrial television service by the two commercial broadcasters, on top of competition from peers in the Pay TV market.

Nonetheless, the Group is sparing no efforts to consolidate its position in the television market with the acquisition of prized products, such as the Olympics Games and FIFA World Cup, enhancement of its own production, as well as sharpening its sales and marketing and after-sales services.

Some of these efforts are beginning to bear fruit in enhancing our competitiveness and subscriber loyalty; and the Group is confident that it would continue to be very competitive in this crowded market.

UNAUDITED CONSOLIDATED PROFIT AND LOSS ACCOUNT
For the nine months ended September 30, 2007

CONSOLIDATED BALANCE SHEET
At September 30, 2007

UNAUDITED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

For the nine months ended September 30, 2007

Attributable to equity shareholders of the Company

UNAUDITED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
For the nine months ended September 30, 2007

Attributable to equity shareholders of the Company

* Included in the Group's revenue reserve is positive goodwill written off against reserves in prior years amounting to HK$197,785,000.
** The special capital reserve is non-distributable and it should be applied for the same purposes as he share premium acount.

NOTES TO THE INTERIM FINANCIAL REPORT

1. Basis of preparation and comparative figures
   
   The unaudited interim financial report has been prepared in accordance with the requirements of the Main Board Listing Rules of The Stock Exchange of Hong Kong Limited, including compliance with Hong Kong Accounting Standard 34 "Interim financial reporting" issued by the Hong Kong Institute of Certified Public Accountants ("HKICPA").
   
   The HKICPA has issued certain new and revised Hong Kong Financial Reporting Standards ("HKFRSs") that are first effective or available for early adoption for the current accounting periods of the Group. We believe the adoption of these new and revised HKFRSs will not have a material impact on the Group's financial position or results of operations.
   
   The same accounting policies adopted in the annual financial statements for the year ended December 31, 2006 have been applied to the interim financial report.
   
   
2. Turnover
   
   Turnover comprises principally subscription and related fees for Pay television and Internet services, Internet Protocol Point wholesale services. It also includes advertising income net of agency deductions, channel service and distribution fees, programme licensing income, film exhibition and distribution income, network maintenance income and other related income.
   
   
3. Segment information
   
   Substantially all the activities of the Group are based in Hong Kong and below is an analysis of the Group's revenue and result by principal activity for the nine months ended September 30:
   
   

   		Segment revenue				Segment result
   		2007		2006		2007		2006
   		HK$'000		HK$'000		HK$'000		HK$'000
   Pay television		1,211,643		1,439,912		132,013		189,569
   Internet and multimedia		442,295		444,660		131,891		105,127
   Unallocated		112,787		36,929		(116,250)		(122,824)
   Inter-segment elimination		(18,824)		(11,954)		(3,720)		-
   		1,747,901		1,909,547		143,934		171,872
   Profit from operations						143,934		171,872
   Interest income						16,154		7,075
   Finance costs						(16)		(24)
   Non-operating income/(expenses)						1,916		(193)
   Income tax expense						(6,878)		(32,092)
   Profit after taxation						155,110		146,638

   
   
   
4. Profit before taxation
   
   Profit before taxation is stated after charging / (crediting):
   
   

   				Nine months ended September 30, 2007		2006
   				HK$'000		HK$'000
   	Depreciation
   		- assets held for use under operating leases		24,925		29,917
   		- other assets		256,582		294,895
   				281,507		324,812
   	Amortisation of programming library*			91,185		66,476
   	Amortisation of other intangible assets**			3,288		-
   	Staff costs			513,029		578,675
   	Contributions to defined contribution retirement plans			21,593		23,134
   	Cost of inventories used			5,961		10,237
   	Auditors' remuneration			2,923		2,216
   	Non-operating (income)/expenses
   	Net (gain)/loss on disposal of property, plant and equipment			(1,916)		193

   
   
   * Amortisation of programming library is under programming costs in the consolidated results of the Group.
   **Amortisation of other intangible assets is under network and other operating expenses in the consolidated results of the Group.
   
   
   
5. Income tax
   The provision for Hong Kong Profits Tax is calculated at 17.5% of the estimated assessable profits for the period (2006: 17.5%). Taxation for the overseas subsidiaries is charged at the appropriate current rate of taxation ruling in the relevant countries. The income tax charge for the nine months ended September 30 represents:
   
   

   	2007		2006
   	HK$'000		HK$'000
   Current tax provision - overseas	143		174
   Net deferred tax expenses	6,735		31,918
   	6,878		32,092

   
   
   
   
6. Earnings per share
   
   The calculation of basic earnings per share is based on the profit attributable to equity shareholders of the Company of HK$153 million (2006: HK$146 million) and the weighted average number of ordinary shares outstanding during the period of 2,019,234,400 (2006: 2,019,234,400).
   
   The calculation of diluted earnings per share is based on the weighted average number of ordinary shares of 2,019,234,400 (2006: 2,019,234,400) after adjusting for the effects of all dilutive potential ordinary shares.
   
   
   
   
7. Deferred tax in the balance sheet
   
   The components of deferred tax (assets)/liabilities recognised in the consolidated balance sheet and the movements during the period are as follows:
   
   

   Deferred tax arising from:		Depreciation allowances in excess of related depreciation		Tax losses		Other		Total
   		HK$'000		HK$'000		HK$'000		HK$'000
   At January 1, 2007		164,215		(440,051)		2,631		(273,205)
   Charged/(credited) to consolidated profit and loss account (Note 5)		(32,687)		40,409		(987)		6,735
   At September 30, 2007		131,528		(399,642)		1,644		(266,470)
   						At September 30, 2007		At December 31, 2006
   						HK$'000		HK$'000
   Net deferred tax assets recognised on the balance sheet						(364,466)		(388,266)
   Net deferred tax liabilities recognised on the balance sheet						97,996		115,061
   						(266,470)		(273,205)

   
   
   
   
8. Accounts receivable from trade debtors
   
   

   An ageing analysis of accounts receivable from trade debtors (net of impairment losses for bad and doubtful accounts) is set out as follows:

   
   

   	At September 30, 2007		At December 31, 2006
   	HK$'000		HK$'000
   0 to 30 days	38,351		24,819
   31 to 60 days	12,021		24,428
   61 to 90 days	18,746		16,869
   Over 90 days	25,386		19,469
   	94,504		85,585

   
   The Group has a defined credit policy. The general credit terms allowed range from 0 to 60 days.
   
   
   
   
9. Amounts due to trade creditors

   An ageing analysis of amounts due to trade creditors is set out as follows:

   	At September 30, 2007		At December 31, 2006
   	HK$'000		HK$'000
   0 to 30 days	5,688		3,806
   31 to 60 days	5,914		3,916
   61 to 90 days	2,626		6,537
   Over 90 days	8,745		28,416
   	22,973		42,675

   
   
   
   

By Order of the Board
Wilson W. S. Chan
Secretary

Hong Kong, November 15, 2007

As at the date of this announcement, the Board of Directors of the Company comprises Mr. Stephen T. H. Ng, Mr. William J. H. Kwan and Mr. Peter S. O. Mak, together with four independent non-executive Directors, namely, Dr. Dennis T. L. Sun, Sir Gordon Y. S. Wu, Mr. Patrick Y. W. Wu and Mr. Anthony K. K. Yeung.