Communications service provider Infoserve Technology - whose largest shareholder is Singapore Telecommunications (SingTel) - saw its net loss widen to US$27.52 million last year due to higher costs and lower voice and facsimile revenues. The loss, exceeding its turnover of US$26.44 million, prompted management of the recently listed company to lay off 213 employees, or 35.4 per cent of its workforce, last year. Severance payments amounted to about US$1 million. In 2000, it posted a net loss of US$20.44 million on turnover of US$29.58 million. Last year's bottom line was also dragged down by US$2.3 million provisions for early termination of some under-utilised office and bandwidth circuit lease agreements. Revenues from communications services, mainly voice and facsimile, representing about half of turnover, fell 24.1 per cent year on year to US$12.26 million due to strong competition. Average revenue per minute of these services plunged more than 40 per cent despite 'a moderate growth' in traffic, the company said. Internet access and related services brought in US$13.17 million, almost the same as a year earlier. Newly launched virtual private network services, linking corporate computer networks across country borders, booked revenues of US$1 million. Infoserve raised net proceeds of about US$35 million via a share offer and listing on the Growth Enterprise Market in January. About HK$20 million was ear-marked to partly fund a US$5 million 15-year network capacity leasing arrangement, which management believed would save 50 per cent to 60 per cent in bandwidth costs. Last year, bandwidth cost US$8.83 million. At the end of last year, cash on hand amounted to US$413,000, down from US$25.98 million a year earlier. Short-term bank loans came to US$3.14 million and long-term bank loans were US$3.8 million, making a long-term debt to shareholders' equity ratio of 133 per cent, up from 5 per cent a year earlier. The sharp rise in debt gearing was due to the huge loss sustained last year. Chairman Phil Tsai Jenp Luh said the company had arranged a new banking facility this year to improve its liquidity. He did not disclose the facility's amount.
