CTI Reports 2003 Annual Results
November 24 2003 - 6:30AM
PR Newswire (US)
CTI Reports 2003 Annual Results Record Highest Ever Earnings in Two
Consecutive Years Despite Intense Market Competition HONG KONG,
Nov. 24 /PRNewswire-FirstCall/ -- * Group turnover grew 13% to
HK$1,299 million despite intense market competition * Profit
attributable to shareholders increased 183% to HK$258 million from
HK$91 million of the last corresponding period * The Group's gross
margin continually increased to 75% from 60% of the last
corresponding period; while its gross profit rose 41% to HK$976
million from HK$692 million of the last corresponding period * The
Group recommends a final dividend of HK cents 7.5, amounting to a
total of HK cents 12.5 in this financial year * IDD business: --
Operating profit was HK$338 million, a rise of 52% from $223
million in the year before * FTNS (Fixed Telecom Network Services)
business: -- The revenue of FTNS business grew 75% to HK$423
million -- The number of subscribers recorded significant growth: *
The subscriber base surged over fivefold to reach 138,000 from just
21,000 last year in the residential sector; while the business also
was making forays into the commercial sector, having successfully
installed 8,000 commercial fixed lines * While we are making big
progress in the residential market, we also maintain a fair
presence in broadband service, with 164,000 residential and 8,000
corporate customers in number, enjoying 26% and 33% growth
respectively * The business achieves a positive EBITDA of $78
million * The business accounted for 33% of total group turnover
and became a major business and revenue generator of the Group City
Telecom (HK) Limited (Nasdaq: CTEL; HKEX stock code 1137) ("The
Group") today announced the annual results for the financial year
ended 31st August, 2003. During the period under review, the
Group's core business achieved impressive growth due to aggressive
marketing strategies and cost efficiency. Despite the intensely
competitive market, the Group achieved record level profit for the
second year in a row. The Group turnover was HK$1,299 million,
representing an increase of 13% from HK$1,150 million of year 2002.
Following the record HK$91 million profit made in year 2002, our
profit attributable to shareholders leaped 183% to HK$258 million,
bringing the Group's profitability level to impressive new heights.
Cash on hand and bank deposits totaled HK$447 million as of 31st
August 2003. Earnings per share was HK cents 46.7 (HK cents 18.4 in
2002). The board of directors has recommended a final dividend of
HK cents 7.5, amounting to a total of HK cents 12.5 in the
financial year under review. Ricky Wong, chairman of City Telecom
(H.K.) Limited said, "In retrospect, last year's telecommunications
market remained highly competitive. Thanks to the significant
operating efficiency and cost controls, the Group enjoyed
impressive performance. While IDD business was growing steadily,
the FTNS business witnessed faster pace of development and entered
the harvest stage, which became another reliable revenue stream of
the Group. Looking into the future, we shall put more focus to
further expand FTNS business, hoping to diversify our quality
service offerings to bring more revenue, and to enhance the Group's
core business development in a more balanced act." Fixed Telecom
Network Services Last year saw the FTNS business firmly established
itself as a major business not only for the group but also from the
market's point of view. The business accounted for 33% of total
group turnover from 21% of the last corresponding period and became
a major business and revenue generator of the Group. During the
period under review, fixed telecom network service has shown major
turnover increase of 75% to reach HK$423 million from HK$241
million last year. For EBITDA level, the business recorded a profit
of HK$78 million this year. As a result of the outstanding
performance, the operating loss of FTNS business was sharply
narrowed to HK$63 million this year from HK$122 million of the last
corresponding period. Spurred by our aggressive marketing strategy,
new fixed network customers have recorded significant growth in the
residential sector and quickly reached 138,000 by August from
21,000 of the last corresponding period, representing an increase
over 5 times, while it reached 165,000 currently. Our broadband
service had residential customers amounted to 164,000 in number,
enjoying a 26% growth from 130,000 last year. While we are making
big progress in the residential market, we also maintain a fair
presence in the corporate sector, with a 33% increase of broadband
customers from 6,000 last year to 8,000 this year. The Group also
started to enter the corporate fixed line market with 8,000 lines.
The Group has largely completed the network infrastructure and
achieved the goal set last year of extending it to 1.2 million
homepass and 550 commercial buildings. In order to propel our
development in telecommunications services to provide comprehensive
and all-rounded services, one of major initiatives for our FTNS
services has been to build our own fibre backbone with the aim of
boosting service quality and capacity, a condition necessary to fix
our cost structure. More importantly, with our own high quality
fibre network, the Group will gain high technological superiority
and capacity to provide broadband, voice and pay TV concurrently to
cater for growing market demands. This strategy will help create
new sources of revenue, in addition to share costs, for the Group.
International Telecom Services Our IDD business achieved stable
growth this year in IDD business. Faced with a highly competitive
environment where there were continually new market entrants, as
well as existing players, who adopted an aggressive pricing
strategy, we maintained our average tariff for the year at a level
comparable to that of last year, keeping in line with the interest
of maximizing profit for our shareholders. The turnover of IDD
business dipped 4% to HK$876 million from HK$909 million last year.
On the strength of successful pricing strategy and overall cost
control measures, gross profit margin rose sharply. Also, operating
profit were recorded at HK$338 million this year including a HK$84
million USC rebate, representing a robust growth of 52% as compared
with HK$223 million last year. Excluding the rebate, the operating
profit increased 14% to HK$254 million. However, we will closely
monitor the situation in the coming year and if necessary will
adjust our pricing policy to protect and enhance our market share.
Prospects Our business looks as bright as ever. Our confidence is
derived from our secured position in the IDD market plus our strong
growth in the FTNS market, giving us two, not one, reliable revenue
streams. In addition, we have adopted cost control measures to
ensure efficient use of resources. The past year also has seen us
breaking yet another record of profits and impressive profit
margin, which is testament to the efficiency of running the
business. The expected completion of our fibre network in December
2004 will also give us a strong platform to launch a host of new
services to generate additional revenue. Looking ahead, we shall
have two major tasks: firstly, putting focus on developing pay TV
and secondly, looking into 3G mobile services based upon our
existing IP network platform and wide customer base. It is our
mission to make entry into the mobile market to become an
integrated telecommunications services provider once the licenses
currently hold by other operators are expired. Mr. Wong is fully
confident with the future prospect of the group. "No matter it is
IDD, broadband Internet or fixed line service, our services have
long been successful and enjoyed market recognition. Our Group has
taken on new businesses, moving on from fixed line to mobile; from
telecommunications to TV. It is our hope to become an integrated
telecommunications services provider, and marching towards the
position of "Dominant Player", he concluded. Note to Editors:
Established in 1992, City Telecom (H.K.) Limited provides
comprehensive, integrated telecommunication services in Hong Kong
and various overseas markets. In addition to IDD, the Group's core
business, the Group has obtained both the wireless and
wireline-based fixed telecom network service license, for the
provision of broadband Internet access, local telephony and pay-TV
services. The Group was listed on the Stock Exchange of Hong Kong
(Stock Code: 1137) in August 1997 with an ADR Listing on the NASDAQ
National Market (Ticker Symbol: CTEL) in the USA in November 1999.
The Group's key companies are City Telecom (H.K.) Limited and Hong
Kong Broadband Network Limited. Apart from the headquarter in Hong
Kong, the Group established branch offices in Guangzhou and Canada
as well. For details, please visit http://www.ctihk.com/.
DATASOURCE: City Telecom (HK) Limited CONTACT: Corporate
Communications - Jessie Cheng, +852-3145-4118, fax -
+852-2199-8372, , or Investor Relations - Corinna Sio,
+852-3145-6068, fax - +852-3145-6706, , both of City Telecom (HK)
Limited Web site: http://www.ctihk.com/
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