PCCW sees openings for growth as profit rises 18pc
About a year after a controversial bid to take the company private failed, telecommunications giant PCCW has moved on and sharpened its focus on new opportunities this year.
'That privatisation is dead,' group managing director Alex Arena said yesterday, after reporting an 18per cent profit increase for last year.
PCCW, controlled by Richard Li Tzar-kai, reported net earnings of HK$1.506 billion compared with HK$1.272 billion in 2008, on the back of cost-cutting measures, improved pay-television and content sales, and gains made from the disposal of a property development in Beijing.
Its consolidated revenue, including that of majority-owned Pacific Century Premium Developments, declined to HK$25.077 billion from HK$31.951 billion a year earlier due to lower income from its luxury Bel-Air property development.
Earnings before interest, tax, depreciation and amortisation (ebitda) for PCCW's core telecommunications, media and information technology business remained firm at HK$6.718 billion last year, compared with HK$6.714 billion in 2008. Consolidated ebitda, however, was down 6 per cent to HK$7.499 billion from HK$7.982 billion the previous year. PCCW's board has recommended a final dividend of 13.3 HK cents per share, which is subject to the approval of shareholders.
'We believe that as the economic conditions improve, we are well poised for growth across the business as a whole,' Arena said.
On the possibility of another attempt to privatise the company, Arena said there was 'nothing in the pipeline' about a buyout. 'Forget it. It's dead,' he said.
The Richard Li-controlled Pacific Century Regional Developments and China Unicom Group, the majority shareholders of PCCW, last year offered to take the city's dominant fixed-line telecommunications network operator private for HK$15.93 billion.
In April, the High Court approved the deal, but the Securities and Futures Commission argued the shareholders' vote had been rigged. It successfully appealed in the Court of Appeal, which ruled the privatisation vote was 'clear manipulation' and had hurt the interests of minority shareholders.
Arena declined to comment on the reported police raids at Li's home and at the offices of Fortis Insurance (Asia), which were part of an investigation into the failed PCCW privatisation. He noted that neither the police nor the SFC has made an official comment on that matter.
One subject PCCW has been keen to discuss is its plan to apply for a free-to-air television licence. It is a market segment in which the company can deliver plenty of innovation, thanks to its ubiquitous terrestrial and wireless networks, and quality local content production capabilities.
Arena also noted that it had realised cost-effective and popular football offerings with the Italian Serie A and Spanish La Liga broadcasts. He said these franchises cost a fraction of the English Premier League broadcast rights held by Cable TV.
