AGCX results. PC-1 is complete!!!
Fez
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Asia Global Crossing Reports Third Quarter Results andSignificant Milestones in Its Expanding Asian Operations
- Third quarter results of pro forma Proportionate Cash Revenue of 57.7 million and pro forma Proportionate Adjusted EBITDA of 9.0 million on track with year end targets.
- Network build approximately 50 percent complete.
- Successful completion of initial public equity offering and debt offering totaling $875 million completes funding of current business plan.
- Internet Protocol (IP) Services launched in Japan with landmark contract wins from three of the four top Japanese ISPs.
- Joint venture with Exodus announced to provide complex web hosting services in the region; Asia Global Crossing majority network provider.
HAMILTON, Bermuda, Nov. 8 /PRNewswire/ -- Asia Global Crossing (Nasdaq: AGCX) today announced financial results for the third quarter and year-to-date for the period ended September 30, 2000.
(Photo: newscom.com )
In its first financial report as a public company, Asia Global Crossing reported third quarter results of pro forma Proportionate Cash Revenue of $57.7 million and pro forma Proportionate Adjusted EBITDA of $9.0 million; the proportionate metrics reflect Asia Global Crossing's proportionate ownership interests in its consolidated and non-consolidated affiliates. Pro forma results include ownership interests in Hutchison Global Crossing and Global Access Limited which were transferred to Asia Global Crossing at the closing of its initial public offering. Third quarter reported Revenue totaled $21.8 million and the net loss was $23.3 million.
For the nine months ended September 30, 2000, the company reported pro forma Proportionate Cash Revenue of $208.6 million and pro forma Proportionate Adjusted EBITDA of $86.6 million. Reported Revenue for the nine month period was $130.5 million and the net loss was $54.8 million.
"Asia Global Crossing is rapidly executing its business plan to develop and sell advanced telecommunications services over the first pan-Asian network," said John Legere, Chief Executive Officer of Asia Global Crossing. "Our solid sales reflect the growing demand for bandwidth and related services in the Asian region. Demand for bandwidth in Asia continues to accelerate and is growing at more than 75 percent per year, driven by deregulation and the growth of the Internet and corporate data traffic. In addition, Asia Global Crossing is benefiting from being the clear first mover in this space. We are the only independent pan-Asian provider today that has operational assets, product offerings, and a solid customer base.
"Approximately 50 percent of our network is completed and our future business plans are fully funded. All key subsea and backhaul systems, which will take our customers city-to-city, not just shore-to-shore, are expected to be completed during 2001 for Hong Kong, Japan, Korea, Singapore and Taiwan. As we finalize joint ventures with leading companies in the region, we are also progressing very rapidly in obtaining necessary landing rights and securing essential rights-of-way."
IP Services
During the quarter, the company won numerous IP transit contracts from leading Japanese ISPs. With the signing of these contracts, the company now has attracted top ISPs in Japan to its system, including leading providers such as Fujitsu's @nifty, NEC's BIGLOBE, and Sony's So-net.
Added Legere: "Due to its state-of-the-art IP-based network architecture and global reach, Asia Global Crossing has rapidly become the preferred service provider in the region. As each country is connected to the Asia Global Crossing network, we will not only begin selling Indefeasible Right of Use (IRUs), but also a complete suite of IP services. Our success in Japan is the template for rapid rollout in other markets."
Network Build
On the operational front, Asia Global Crossing continues to reach network roll-out milestones, including:
-- Completion of the redundant loop construction for Pacific Crossing 1;
-- Completion of the backhaul link construction in Hong Kong;
-- Completion of the construction of the 296-fiber Tokyo city ring;
-- Award of the EAC Phase 2 contract to NEC, which will extend the network to Malaysia, the Philippines, and Singapore;
-- Inauguration of two terrestrial interconnections to China via Hong Kong;
-- Receipt of preliminary approval for a facilities-based operator's license in Singapore; and
-- Submission of operator's license application in Taiwan.
Web Hosting
Asia Global Crossing continued to expand its participation in complex web hosting, launching new data centers in Hong Kong and Tokyo during the quarter. In addition, Asia Global Crossing announced a 33/ 67 joint venture with Exodus Communications called Exodus Asia-Pacific, which will become the exclusive web hosting vehicle for the two companies in the region, subject to the completion of the GlobalCenter and Exodus merger. All web hosting assets and territorial rights of Exodus and GlobalCenter in the region will be contributed to this joint venture. Asia Global Crossing will be the supplier of bandwidth to Exodus Asia-Pacific, with at least two-thirds intended to be sourced from the Asia Global Crossing network.
Quarterly Results
Financial highlights, for the three months and nine months ended September 30, 2000, were:
Three Months Ended Nine Months Ended
September 30, 2000 September 30, 2000
(unaudited) (unaudited)
(in millions, except for per share data)
Pro forma Proportionate
Cash Revenue* $57.7 $208.6
Pro forma Proportionate
Adjusted EBITDA* $9.0 $86.6
Reported Revenue $21.8 $130.5
Earnings per share $(0.05) $(0.12)
* Pro forma results reflect the current ownership of GAL and HGC, applied
to the respective periods.
Financial Discussion
For the nine months ended September 30, 2000, IRU capacity sales on Pacific Crossing 1 accounted for the majority of pro forma Proportionate Cash Revenue of $208.6 million. Asia Global Crossing's services offerings, which exploit the architectural advantages of its network, are a rapidly growing part of the company's business. IRU sales, however, will continue to provide the majority of the Proportionate Cash Revenue in the near term.
Proportionate Cash Revenue and Proportionate Adjusted EBITDA include proportionate results from consolidated and non-consolidated affiliates. The company believes these metrics are relevant given the importance of joint venture operations in achieving its business objectives. Cash received which may be applied to capacity purchases on systems to be specified at a future time, are not included in calculating Proportionate Cash Revenue or Proportionate Adjusted EBITDA, as the company cannot determine its ownership of the systems on which these payments will be applied. At the end of the quarter, a total of $39.8 million of cash deferred revenue resulted from these cash receipts.
Pro forma Group Customer Cash Revenue reflects total sales to customers by both consolidated and non-consolidated affiliates. Pro forma Group Customer Cash Revenue was $125.2 million for the third quarter and $418.7 million for the year to date.
The company had reported Revenue of $21.8 million and a net loss of $23.3 million in the third quarter with year-to-date reported Revenue of $130.5 million and a net loss of $54.8 million. Year-to-date numbers reflect significant sales type lease activity in the first half of this year. The company's current business practice is to sell capacity under terms that require amortization of revenue over the contract life rather than terms that qualify for immediate revenue recognition. Accordingly, sales type lease activity accounted for a smaller percentage in the third quarter, and is not expected to return to first half levels as a percentage of revenue.
Joint Venture Operational Discussion
Asia Global Crossing's business strategy as an integrated service provider is enhanced and accelerated by joint ventures. These joint ventures with strong local partners provide the company with connectivity and telecommunications solutions such as backhaul and city rings. Currently, Asia Global Crossing has two principal operating joint ventures, Hutchison Global Crossing in Hong Kong, and Global Access Limited in Japan. Negotiations with joint venture partners in Korea, the Philippines, Singapore, and Taiwan are in the final stages.
Hutchison Global Crossing
Hutchison Global Crossing, the 50/50 joint venture between Asia Global Crossing and Hutchison Whampoa, is a leading provider of a wide range of telecommunications and Internet services in Hong Kong, including data, voice, e-commerce and Internet access services. Hutchison Global Crossing's results reduced pro forma Proportionate Adjusted EBITDA by $2.4 million for the quarter and $6.1 million for year-to-date. Its contributions to pro forma Proportionate Cash Revenue were $16.1 million for the quarter and $46.0 million year-to-date.
For the quarter ended September 30, 2000, Hutchison Global Crossing had reported Revenue of $32.2 million, a 12 percent increase from the same period last year. Operating loss for the quarter was $10.4 million, 28 percent lower than third quarter 1999 due to the competitive environment in international voice traffic and new business initiatives in broadband, data center development and the Electronic Service Delivery scheme of the Hong Kong Special Administrative Region. Year-to-date reported Revenue was $92.0 million and operating loss was $27.5 million. No revenue is reflected from backhaul, as it is not yet in service.
HutchCity's 10-Mbps-to-the-desktop pilot service was launched in September 2000 with good initial customer response. During the quarter, interconnection agreements with China Unicom and China Telecom were signed to provide higher quality service. Hong Kong data centers of 43,000 square feet are now in service with Phase 1 completely sold-out. At the end of third quarter, Hutchison Global Crossing has a 892 route kilometer network in service with more than 800 buildings accessed with fiber in the territory.
Global Access Limited
Global Access Limited is the 49/51 joint venture between Asia Global Crossing and Vectant (100 percent owned subsidiary of Marubeni) that is building a 1,560 route kilometer fiber optic network connecting Tokyo, Osaka, and Nagoya with Pacific Crossing 1 and East Asia Crossing. Global Access Limited's results increased pro forma Proportionate Adjusted EBITDA by $5.8 million for the quarter and $39.6 million for year-to-date. Its contributions to pro forma Proportionate Cash Revenue were $10.4 million for the quarter and $51.1 million year-to-date.
During the third quarter, Global Access Limited had reported Revenue of $6.9 million and operating loss of $4.3 million. Year-to-date reported revenue was $15.0 million and operating loss was $11.7 million. Global Access Limited's network initiated service simultaneously with Pacific Crossing 1 at the end of December 1999. Current sales are primarily of Pacific Crossing 1 backhaul and in-city connectivity in Tokyo. Domestic leased circuits between Nagoya and Osaka became available during the quarter. Construction to complete the build-out of Global Access Limited network is on schedule with Ajigaura - Tokyo, Shima - Osaka, Shima - Nagoya and Osaka city ring in full service. |
