PCCW's Telephone Arm to Net Only HK$2 Bln This Year: HKET
Feb 05, 2001 - 12:38:08 HKT
Quamnet News Service
Pacific Century CyberWorks Ltd. (0008), Richard Li's Internet and telecoms company, is expected to earn a net profit of only HK$2 billion this year from its telephone arm PCCW-HKT due to its huge interest expenses on loans, the Hong Kong Economic Times reported, citing a document PCCW issued to its refinancing banks.
PCCW-HKT, Hong Kong's largest fixed-line telephone service provider, probably can't return to last year's profit level of HK$5.7 billion within the next six years, according to the paper.
The document also said the ratio of PCCW's total debts to EBITDA (earnings before interest, tax, depreciation and amortization) will still be above 3.5 times by 2003. Under the company's agreement with its bankers, PCCW cannot pay a dividend of more than 35 percent during the period. Though PCCW already assumed that its HKT unit won't distribute any dividend in the next six years, the unit's retained cash still isn't enough to repay loans.
By 2006, when its the second tranche US$2.3 billion refinancing loan is due, PCCW-HKT will have source part of the money needed from other companies within the group, the paper said.
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