Pacific Century CyberWorks Ltd. (PCCW), Hong Kong's most prominent Internet startup and the new owner of the territory's incumbent telecommunications carrier, on Thursday reported a net loss of HK$35 million (US$4.4 million) for the six months ended June 30.

The results for the half year, which ended before the merger was completed in August, were hit by operating costs of HK$590 million, including financial transaction costs connected with the merger and operating expenses for the development of the company's Network of the World broadband multimedia service. In the first half of 1999, the company had reported a net loss of HK$41 million.

At a packed evening press conference at company headquarters here to announce the results, PCCW executives pointed to strong numbers for the same period from the recently acquired Cable & Wireless HKT Ltd. (C&W HKT) and announced a partnership for a print, online and mobile directory "yellow pages" in China that they said held significant growth potential.

Chairman Richard Li and other executives were less talkative about PCCW's proposed mobile and data-backbone joint ventures with Australian carrier Telstra Corp., which are intended partly to ease the company's debt burden and recently have been reported to be in doubt. Li declined to comment on the final terms of the deal, saying it is in the final stages of negotiation.

For the half year, PCCW reported revenue of HK$104 million, up more than 40 percent from HK$74 million in the same period of 1999. Its gross profit came in at HK$61 million, up about 65 percent from HK$37 million a year earlier. Executives pointed to strong results from the company's data-center business as a highlight of the period.

C&W HKT's half-yearly results were on another scale altogether, with revenue of HK$14.1 billion, up 1.3 percent from 13.9 billion a year earlier. Earnings before interest, taxation, depreciation and amortization were HK$5.6 billion, down 5.2 percent from HK$5.9 billion a year earlier. The company reported that revenue dropped 14.5 percent in the highly competitive international telecommunications services business.

PCCW touts itself as having one of the strongest balance sheets of any "new economy" company because it owns the cash cow of C&W HKT.

PCCW, in Hong Kong, can be reached at +852-2514-8888 or via the Web at http://www.pcg-group.com.