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Technology Stocks : PCW - Pacific Century CyberWorks Limited

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To: ms.smartest.person who wrote (2154)	2/5/2002 1:29:28 AM
From: ms.smartest.person	Read Replies (1) of 2248

Telstra says Reach JV position is healthy Monday February 4, 1:20 PM By Michael Smith SYDNEY, Feb 4 (Reuters) - Telstra Corp Ltd said on Monday the financial position of its wholesale telecoms carrier Reach was healthy and rejected forecasts it would record a net loss of US$15 million for 2001. A Telstra spokeswoman said financial projections made by ABN Amro on its 50:50 Asian joint venture with Pacific Century (Singapore: PCEN.SI - news) Cyberworks Ltd <0008.HK> were incorrect. "Certainly what they (ABN Amro) are forecasting is wrong. Our financial position is healthy and certainly we would not be expecting that to change," the spokeswoman told Reuters, though refused to elaborate. ABN Amro said in a recent report it expected the Reach joint venture to post a net loss after tax of US$15 million for the 2001 calendar year. The brokerage forecast 2001 earnings before interest, tax, depreciation and amortisation for Reach of US$387 million. This is below Telstra's forecast in July last year of EBITDA between US$400 million and US$500 million. However, analysts remained upbeat on the long-term strategic value of Reach and said its 2001 earnings results would have little impact on Telstra's market value. "You need to look at the strategic value of Reach as part of a longer term investment rather than a short term earnings investment," UBS Warburg telco analyst Tim Smeallie said. "I think the acquisition of the Asian Level 3 assets probably received the most positive sentiment from the market of any Telstra acquisition over the past two or three years." Reach announced in December it would buy the Asian assets of ailing U.S. rival Level 3 Communications . Under the deal, Hong Kong-based Reach will not make any cash outlay but assume Level 3 Asia's capital and operating cost obligations from November 30, 2001. Telstra shares were one cent lower at A$5.42 in a firmer overall market shortly before the close. asia.news.yahoo.com

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