COMPANIES & FINANCE INTERNATIONAL: HKT reports hit PCCW
Financial Times; Feb 7, 2001
By JOE LEAHY
Shares of Pacific Century Cyberworks, the Hong Kong internet and telecommunications company, slipped yesterday following reports that the net profit of its main cash subsidiary, Hong Kong Telecom, would fall by nearly two-thirds this year because of increased interest payments.
According to reports in the local media, HKT, which operates Hong Kong's fixed-line telephone network, will record a fall in net profit from HKDollars 5.68bn (Dollars 728m) in 2000 to HKDollars 2.1bn this year.
The reports quoted confidential documents provided by the company to potential creditors. The increased interest burden stems from PCCW's partially leveraged, USDollars 28bn buy-out of Hong Kong's former dominant telephone company, Cable & Wireless HKT, last year.
In a statement to the stock exchange, PCCW said the figures were unaudited and "were prepared on the basis of numerous assumptions and qualifications". Analysts said the fall in net profit was in line with expectations. Greg Feldberg, an analyst with Indosuez WI Carr Securities, said PCCW's earnings before interest, tax, depreciation and amortisation was expected to be still about three times its interest bill.
Copyright: The Financial Times Limited
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