Hong Kong telecoms and media giant PCCW upbeat after posting net profit of US$138 million for first half of 2015
PCCW, the flagship conglomerate of Hong Kong billionaire Richard Li Tzar-kai, will chase strong initiatives in the telecommunications, media and information-technology services markets in a bid to prosper in the second half of 2015 despite the city’s modest economic climate.
“We will continue on our journey to becoming the digital transformation partner of choice for our customers," PCCW group managing director Bangalore Gangaiah Srinivas said on Thursday.
He made the remarks after the company reported its consolidated earnings for the six months ended June 30.
In its regulatory filing, PCCW posted a flat consolidated interim net profit of HK$1.070 billion (US$138.05 million), mainly due to higher general and administrative expenses, as well as increased depreciation and amortisation costs.
That beat Barclays' earlier estimate of a 5 per cent year-on-year decline in interim net profit.
Total first-half revenue from PCCW's core telecommunications, media and information-technology services businesses rose 25 per cent to HK$17.983 billion from HK$14.440 billion in the same period last year.
Including property and investment division Pacific Century Premium Developments, the company's consolidated interim revenue climbed 23 per cent to HK$18.082 billion from HK$14.664 billion the previous year.
Its core businesses' earnings before interest, taxes, depreciation and amortisation -- a measure of a firm's operating profitability -- jumped 30 per cent to HK$5.784 billion in the first half from HK$4.457 billion a year ago.
Those core businesses are represented by HKT, the largest mobile and fixed-line network operator in Hong Kong; local pay-television market leader Now TV; and PCCW Solutions, the city's biggest information-technology services provider.
HKT on Wednesday reported a 28 per cent year-on-year increase in first-half revenue to HK$15.974 billion.
"Our continuous enhancement of user experience in both fixed and mobile services, such as 10-gigabit-per-second broadband and mobile payment services, will fuel further growth of these segments," Srinivas said.
PCCW's media business achieved a net gain of 23,000 new pay-TV customers in the first half, swelling total subscribers to 1.292 million at the end of June.
Its interim revenue advanced 7 per cent year on year to HK$1.590 billion on improved monthly average revenue per user, a strong take-up of new programming packages and simplified pricing.
Turnover at PCCW Solutions was up 3 per cent year on year to HK$1.5 billion on solid contributions from its cloud computing, data centre, enterprise application, technical service and business process outsourcing operations.
Srinivas said this business "will target industry segments in Hong Kong and mainland China that have the greatest need for enterprise IT solutions".
Anand Ramachandran, the head of Barclays' telecommunications, internet and media equity research for Asia, excluding Japan, said in a report that PCCW Solutions "will continue to grow rapidly" as the company focuses on potential acquisitions in that market segment.