PCCW’s 1H profit dampened by non-telecoms units; bidders shortlisted for 45% stake

21 Aug 2008

Hong Kong-based full-service telco PCCW Group has reported that its net profit for the first six months of 2008 fell by 20% year-on-year to HKD656 million (USD84 million), down from HKD822 million a year earlier, mainly due to a lower contribution from property development businesses. Consolidated group revenue in the six months to the end of June fell 2% year-on-year to HKD11.37 billion, down from HKD11.61 billion in 1H 2007. Core telecoms revenues grew by 13% to HKD10.75 billion, and core EBITDA went up 10% to HKD3.36 billion. A 3% drop in local telephony revenues at domestic fixed line unit PCCW-HKT was more than offset by growth in other service areas. Total fixed broadband lines in service reached 1.28 million at end-June, up by 8% from a year ago. TV & Content segment turnover, including the IPTV-based ‘now TV’, rose by 45% to HKD1.04 billion, driven by higher subscription revenue from a larger user base and growing ARPU, as well as higher earnings from TV advertising. Losses before interest, tax, depreciation and amortisation (LBITDA) of the TV segment narrowed by 46% to HKD40 million.

Cellular division PCCW Mobile reversed a year-ago EBITDA loss of HKD56 million with a reported six-month EBITDA of HKD108 million, as total mobile subscribers increased by 23% year-on-year to 1.176 million at the end of June 2008, and its 3G customer base grew by 142% to 288,000.

Elsewhere, PCCW says it has shortlisted bidders to acquire a 45% stake in HKT Group Holdings, the newly formed holding company for its core telecoms, media and ICT assets, although it has not released a list of names. Formal bids are due by October, and PCCW is expected to make a final decision on the sale no later than November. Reports have put the stake’s value at up to USD2.5 billion.