City Telecom announces fiscal 2007 annual results

22 Nov 2007

Fibre-to-the-home broadband and international call operator City Telecom (Hong Kong Broadband Network) has reported that total consolidated revenues for its fiscal year ended 31 August 2007 fell 1.6% year-on-year to HKD1.14 billion (USD147 million). Fixed line and broadband (‘FTNS’) turnover increased by 10.2% to HKD816.8 million but was insufficient to cover the 22.4% decrease in IDD telephony sales to HKD324.5 million. However, EBITDA grew strongly by 44.3% to HKD353.8 million, and EBITDA margin expanded from 21.1% in FY06 to 31.0% in FY07. The improvement in EBITDA was attributed by the operator to ‘a focus on increasing FTNS ARPU and enhancing operating efficiency over the last 18 months’ as well as ‘a shift in the revenue composition from IDD to FTNS.’ City Telecom also reduced costs by cutting CAPEX from HKD323 million in fiscal 2006 to HKD132 million in fiscal 2007, as it focused on improving its ‘gross cash position’.

Total FTNS subscribers (including internet, voice and TV customers), increased by 66,000 in twelve months to 683,000 by end-August 2007. Of the total net additions, 42,000 were in the second half of the financial year. IDD traffic volume fell from 788 million minutes in FY06 to 659 million minutes in FY07, partially due to tough competition and partly due to City’s proactive customer migration from IDD to its international VoIP service, branded ‘2b’. Broadband customers totalled 247,000 at the end of the period under review, up by 12.3% year-on-year, whilst total voice telephony subscribers increased by 9.6% to 308,000, and digital TV customers stood at 128,000, up by 10.3% y-o-y.

Hong Kong, Hong Kong Broadband Network (HKBN)