China Motion announces
its annual results for
(July 5, 2001, Hong Kong) - China Motion Telecom International Ltd. ("China Motion" or the "Group"; stock code: 989) today announced its annual results for the year ended 31 March 2001. Due to the continuing difficult conditions in the local retail market and lower demand for unified messaging services in Hong Kong, the Group's turnover amounted to HK$768.4 million, dropped by 13.8%. Loss attributable to shareholders amounted to HK$212.2 million. Excluding the one-off provision of HK$236.2 million for obsolescent plant and equipment, impairment of property and goodwill, the Group's overall result would have shown a profit of HK$24 million for the year. The Board of Directors does not recommend the payment of its final dividend. The Group's Chairman Mr Hau Tung Ying said, "Last year's restructured businesses - Telecommunication Networks, Distribution and Retail Chain and Unified Messaging Services, have achieved their expected results. Although some activities cannot reap any profit at the moment, their management and operation models are all well in place." Telecommunication Networks Performance in this operation was encouraging. Low IDD tariff in Hong Kong and China led to the substantial increase in the volume of voice traffic. Turnover from IDD operations was HK$98.2 million for the year, with a five-fold growth from a low base in the previous year. Revenue from mobile-related services recorded a steady growth of 4.7% to HK$184.3 million for the year. At present, our international voice traffic reaches 45 million minutes per month and maintains continuous growth. The leased E1 and OC3 networks across China, Hong Kong and North America have increased to five and ten respectively. To further widen the Group's international VoIP market share, the Group entered into co-operation relationships with Edge2Net and AboveNet as well as the major telecommunication network operators in China. In the wireless networking services, the sluggishness of the current trunking and leasing markets attributed to sales of HK$50 million, a decrease of 16.5% over the previous year. However, the potential of wireless trunked radio and related businesses in the China market remains promising. Distribution and Retail Chain Turnover of the distribution and retail chain operations was HK$147.4 million for the year, a decrease of 38.8% over the previous year. Such decrease was mainly attributable to a steady decline in market prices of mobile phone products. The "CM Concept" chain store, the Group's retail arms, continued to be one of the top dealers in terms of sales to the mobile network operators in Hong Kong. With its long-time strategic partner, China Motion Telecom Holdings Limited ("CMTH", formerly known as China Motion Telecom Development Company), the Group has successfully extended the operation model of CM Concept to Eastern and Southern China. The sizeable subscriber base of CMTH in China is instrumental to the Group's success in the vast China market. The Group's online value-added distribution platform for telecom products traded under the Internet, chinamotion.com and e-commerce recorded a turnover of HK$27.8 million as a start-up. Although tighter cost control in operation and capital investment had been implemented in the second half of the year, loss before interest and tax for the year under review was HK$53.1 million. To minimize further loss, the operation has now been largely scaled down. Unified Messaging Services To accommodate the declining paging subscribers due to competition from mobile services, the Group has been exploring more value-added services to our existing paging subscribers. Turnover of unified messaging services for the year was HK$190.4 million, representing a decrease of 27.6% from last year. Loss before interest and tax was HK$104.9 million which included the provision for fixed assets and goodwill written-off of HK$103.4 million. The implemented measures on operating efficiency and cost control had turned this operation back to profitability in the second half year. Turnover from telecare services saw a seven-fold growth to HK$12.8 million and our clients come from the government, banking and financial sectors. Concluding the Group's performance, Mr Hau said, "In response to changes in market forces and technology, the Group has transformed from a paging operation company to a diversified telecom company. In the process, the Group underwent corporate and business restructuring and suffered provisions for obsolescent assets and goodwill. It however, strengthened its strategic partnership with CMTH, accumulated substantial funding and recruited talent appropriate for the future task. " Looking ahead, Mr Hau stated that along with China's imminent accession to the World Trade Organization, the Group had the valuable experience and was well positioned to participate in the value-added services of the China telecom market. He further added that the current year should see the Group developing in that direction with the goal of becoming one of the first nationwide virtual network operators in China. He anticipated a return of profitability in the current year. ~end~ |
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