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Technology Stocks : PCW - Pacific Century CyberWorks Limited -- Ignore unavailable to you. Want to Upgrade?

To: ms.smartest.person who wrote (811)	3/29/2001 11:48:00 AM
From: ms.smartest.person	Read Replies (1) \| Respond to of 2248

PCCW slumps to all-time low after heavy 2000 net loss and write offs HONG KONG, March 29 (AFP) - Pacific Century CyberWorks Ltd. (PCCW) shares plunged more than 12 percent on Thursday after announcing a record 2000 net loss and its move to to write off 22 billion US dollars in goodwill from reserves, dealers said. The write-off resulted in the company's shareholders' equity becoming negative, they said. PCCW shares closed morning trade down 42.5 Hong Kong cents (5.45 US cents), or 12.23 percent, at 3.05 Hong Kong dollars, after tumbling to an all-time low of 2.975 dollars at one stage. PCCW shares are now trading at around 10 percent of the 28.50 dollar-high they reached in February last year. The share plunge followed PCCW's announcement Wednesday of a larger than expected net loss of 886 million US dollars for 2000, mainly on the back of a 627 million US dollars provision for net unrealized losses on investments. It also decided to write off against reserves the entire 22 billion US dollars in goodwill from the acquisition of Cable and Wireless HKT last year. Louis Tse, executive director with Standard Capital Brokerage, said the very substantial write-off against reserves resulted in negative shareholders' equity and therefore a negative nominal value for PCCW shares. "The write-offs have sent the stock to a value of around negative 1.95 Hong Kong dollars per share. It doesn't make any sense to buy the share at its current price of over 3.00 dollars now," he said. "Also, the company has little prospect of profitability in the foreseeable future," he added. Other analysts said the poor results had also raised fears PCCW could have greater difficulty raising funds. However, Bank of East Asia chairman and chief executive David Li said despite the lower-than-expected results he remained "100 percent confident" on the business outlook for PCCW. Speaking to reporters after the bank's annual general meeting, Li said "as both a shareholder and director of PCCW, I am 100 percent confident on the company and on (its chairman) Richard Li." However, he added that Bank of East Asia's participation in any new syndicated loans involving PCCW in the future would largely depend on the terms of the deal. Bank of East Asia was one of the 17 local and international banks that participated in a 4.7 billion US dollar PCCW term loan facility earlier this year. Meanwhile PCCW said it was seeking to reduce the revenue contribution from international direct dialling (IDD) services this year to 10 percent from 13 percent in 2000. Speaking at an analysts' briefing, managing director for telecom services Roy Wilson said PCCW has continued to cut costs so that its IDD services could overcome fierce competition. Overall, PCCW's telecom business will experience flat growth in 2001, he said. The company had no plans at the moment to consider further increasing charges for its fixed line services which were increased in January. asia.dailynews.yahoo.com