Hongkong Telecom chief executive Linus Cheung Wing-lam yesterday defended moves to cut staff salaries, despite a rise in company profits to more than $6 billion. In the six months to the end of September the company made $6.09 billion, 1.4 per cent higher than the same period last year, it was announced yesterday. It had net cash in hand of about $15 billion. The announcement came in the wake of a planned across-the-board 10 per cent pay cut, which was put on ice in September after an outcry and threats of industrial action. A decision is now expected on November 20 which, despite the profit rise, could reinstate the cut or introduce other measures. Referring to the competition following the opening up of the telecommunications market, Mr Cheung said: 'We need to take the longer-term view and make difficult decisions. 'I don't believe we got it wrong, that's the heat-of-the-moment reaction, [but] when we look back maybe the issue will be viewed differently. 'The company has a big commitment to retrain and redeploy. The management does not stand in confrontation with staff members.' Unionists and staff last night condemned Mr Cheung's attitude, damning the management approach as 'incredibly problematic', and calling for staff to benefit from rising profits. Ip Kwok-fun, chairman of the Hong Kong Telephone Company Limited Staff Association, said the interim results were impressive in view of the economic downturn, so 'the company should raise our salaries'. 'Any action to cut our benefits would see our morale plummet further,' he said. Legislator and general secretary of the Confederation of Trade Unions Lee Cheuk-yan congratulated the company and its shareholders on its profits, and urged management to reward its diligent staff. 'Staff pay rises have not kept pace with productivity gains - there is a limit to the milking of the cow,' he said. Profits per employee had grown substantially by 20 per cent in 1997 and nine per cent this year, while their pay has risen 5.5 per cent and 3.5 per cent respectively. Lai Man-wai, co-ordinator of the company's Joint Staff Council, said: 'It is obvious the company's insistence on pay cuts is incredibly problematic.' The council, the only union channel recognised by the telephone giant, would conclude negotiations with the firm by November 20, Mr Lai said.