HK's CyberWorks Posts $44.5M Profit for 1999

HONG KONG (03/21/2000) - Pacific Century CyberWorks Ltd. (PCCW), the Hong Kong-based Internet holding company now building a pan-Asian broadband service, yesterday posted a 1999 profit of approximately HK$346.8 million (US$44.5 million).

The profits for the company, which was formed last year when Pacific Century Group took over local telecom company Tricom Holdings Ltd., came largely from the sale of small stakes in several companies, according to Steve McKeever, an analyst at Lehman Brothers, in Hong Kong.

PCCW also claimed as profits a portion of its gains on long-term investments, including stakes in U.S. Internet investment company CMGI Inc., with which PCCW has a partnership to bring American Internet ventures to Asia, as well as U.S.-based broadband SoftNet Systems Inc., Golden Power International Holdings Ltd., and fledgling Internet portal Tom.com Ltd.

For the previous year, as Tricom, the company had posted a loss of approximately HK$62 million.

"It doesn't really reflect a great deal, considering the company has only existed in its current form since the middle of last year," McKeever said.

The figures a year from now, after PCCW has started operating its Network of the World broadband service, will be more telling, he said.

"Most of what has been spent is on setting up (content) production facilities in (Hong Kong) and London. They won't start to book (network costs) as expenses until the service actually starts somewhere," McKeever said.

A string of deals by PCCW, culminating in last month's agreement to acquire incumbent telecom carrier Cable & Wireless HKT Ltd., have boosted both the company's profile and its market capitalization over the past year. PCCW plans by midyear to begin operating its Network of the World, which ultimately will deliver multimedia content around the world using satellite links, according to Chairman Richard Li.

Also yesterday, PCCW said in a statement that Li has been in discussions with News Corp. Chairman Rupert Murdoch on the company's previously announced multimedia joint venture with Star TV. Some observers had questioned the future of the venture after Murdoch offered to help Singapore Telecommunications Ltd. in its rival bid for Cable & Wireless HKT.

PCCW, in Hong Kong, can be reached online at http://www.pcg-group.com.

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