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Earnings nosedive at Hong Kong phone company |
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News |
May
5, 2000
HONG
KONG, MAY 4 (AP) - The dominant Hong Kong phone company said Thursday
its annual earnings plunged by 90 percent to 1.14 billion Hong Kong
dollars (U.S. dlrs 146.5 million) as it took massive write-offs on
obsolete equipment.
The
profits at Cable and Wireless HKT for the fiscal year ending March
31 compared with net income of 11.51 billion Hong Kong dollars (U.S. dlrs
1.48 billion) a year earlier.
Most
of the drop came from a writeoff of 7.09 billion Hong Kong dollars
(U.S. dlrs 909.0 million) in one-time charges over old telecommunications
equipment and networks.
Cable
and Wireless HKT, whose main shareholder is Cable and Wireless
PLC of Britain, had disclosed the writeoffs previously, when it released
half-year results.
Revenues
fell by just 13 percent in the fiscal year just ended, to
28.31 billion Hong Kong dollars (U.S. dlrs 3.63 billion) from 32.41
billion Hong Kong dollars (U.S. dlrs 4.16 billion).
Cable
and Wireless HKT has faced growing competition in the Hong Kong
telephone market, with some competitors luring customers by cutting
prices.
The
company could soon be sold, after Pacific Century CyberWorks, a
local Internet startup run by entrepreneur Richard Li, the son of
prominent Hong Kong billionaire Li Ka-shing, reached a deal for a friendly
takeover.
But the sale has not yet been finalized, and some questions have been raised since PCCW's share price plunged along with other high-tech stocks, making the offer less attractive because Li planned to pay for Cable and Wireless HKT largely in shares.
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