Chairman Richard Li Tzar-kai expects Pacific Century CyberWorks to achieve single-digit revenue growth during the second half as the local economy continues to grow at a sluggish pace. 'Looking at the economic environment around us, we will be targeting year-on-year high single digit revenue growth and a low double-digit growth in ebitda [earnings before interest, tax, depreciation and amortisation]. I think we are consciously optimistic about reaching this target,' Mr Li said after the company yesterday revealed an interim profit of HK$935 million on the back of an overall improvement in its core telecommunications businesses. The company defied market expectations with its latest results, which for the first time include sizeable contributions to its telecoms business from the acquisition of the former Cable & Wireless HKT. CyberWorks' interim operating profit of HK$2.62 billion came mainly from its fixed-line service division, PCCW-HKT. The division was responsible for 88.27 per cent of the HK$11.31 billion turnover during the half. On a pro-forma basis, the telecoms division reported a 12 per cent increase in revenue, and a 15 per cent increase in ebitda, to HK$3.91 billion. Mr Li said CyberWorks, which improved operating margins by 1 per cent in the first six months, reduced staff costs 3.4 per cent during the half. Earnings per share were 4.05 HK cents. There was no dividend. Analysts said one of the bright spots in CyberWorks' operations was an improvement in the subscriber take-up rate to its broadband services. At the end of June, CyberWorks had 305,000 broadband users - a rise of 179 per cent year on year. About 249,000 of these subscribers were retail customers. Contrary to market speculation, CyberWorks did not make a provision for its two joint ventures with Australia's Telstra - CSL and Reach in the interim announcement. 'We will not make provisions on the Reach joint ventures as our carrying costs were way below US$1.3 billion [the book cost attributed to the venture by Telstra in its results],' said Steve Lam Sing-keung, director of group finance. CyberWorks had treated the ventures in its accounting in a manner consistent with the valuations attributed to the ventures by Telstra, he said. Since finalising the two Telstra joint ventures in February, CyberWorks' initial negative equity of US$1.88 billion had been halved to US$900 million, chief financial officer David Prince said. Mr Li said CyberWorks was in no hurry to dispose of non-core assets, nor to refinance US$4.7 billion of debt. The first tranche has to be repaid by 2003. CyberWorks incurred interest expenses of HK$1.77 billion in the first half - 61.64 per cent of its operating profit. Mr Li also said the company, which had US$1.3 billion in cash, would have no difficulty paying the US$300 million needed for the first phase of its CyberPorts development. It will seek further project financing at a later date.