Bangkok--Aug 8--Pacific Internet
Pacific Internet Posts the 14th Consecutive Quarter of Profits
Profits Up 8.1% Year-on-Year and Up 48.5% Quarter-on-Quarter
Financial Highlights for Second Quarter 2005
- Net income of US$1.6 million (12 cents per diluted share), up 8.1%
year-on-year; up 48.5% quarter-on-quarter.
- Corporate business segment revenue of US$16.4 million, up 10.4%
year-on-year and up 7.0% quarter-on-quarter, driven by the Group’s focus on the
corporate business market.
- Cash and cash equivalents grew to US$36.7 million.
Pacific Internet Limited or PacNet (NASDAQ: PCNTF), Asia Pacific’s
largest telco-independent Internet Communications Service Provider by geographic
reach, today announced its financial results for the second quarter that ended
30 June 2005. The Group posted its 14th consecutive quarter of profit, with net
income rising 8.1% from the same quarter last year to US$1.6 million. This was
also 48.5% higher than the previous quarter.
“Our positive financial results in the last 14 quarters have demonstrated
Pacific Internet’s ability to perform strongly and consistently,” said Mr Tan Tong
Hai, President and CEO of Pacific Internet. “We are pleased with the progress of
our corporate business-focused strategy, which has gained momentum and contributed
to our growth in the second quarter. Contribution from corporate business revenue
this quarter was the highest in the last 14 quarters, driven by stronger corporate
broadband and corporate value-added service performances.”
Second Quarter 2005 Financial Results
Table 1: Summary of Quarterly Financial Results
Group (in US$’000) 2Q 2005 2Q 2004 1Q 2005
Revenues 25,152 25,494 24,328
Total Operating Costs and Expenses 23,410 23,523 22,972
Operating Income 1,742 1,971 1,356
Net Income 1,569 1,451 1,058
Table 2: Summary of Year-to-Date Financial Results
Group (in US$’000) Six months ended June 30
2005 2004
Revenues 49,480 50,424
Total Operating Costs and Expenses 46,382 47,615
Operating Income 3,098 2,809
Net Income 2,627 2,377
Table 3: Subscriber Statistics
Market Corporate Leased Corporate Corporat Corporate Consumer Grand
Broadband Lines Dial Up Value Added Business Total Total
Services Total (Broadband
& Dial Up)
Singapore 6,650 530 6,800 670 14,650 134,900 149,550
Australia 9,920 170 350 11,750 22,190 39,560 61,750
Hong Kong 12,250 200 51,430 2,120 66,000 24,260 90,260
Philippines 190 190 360 30 770 92,590 93,360
Malaysia - 40 10 30 80 - 80
Thailand 380 450 180 130 1,140 11,680 12,820
India - 100 100 100 300 800 1,100
Total (as at Jun 2005) 29,390 1,680 59,230 14,830 105,130 303,790 408,920
Total (as at Jun 2004) 21,450 1,520 59,470 12,820 95,260 377,370 472,630
Notes:
- All numbers rounded to the nearest 10
- Total subscriber reduction was due to consumer subscriber decline.
Corporate subscriber base continues to grow in line with the Group’s focus in the
corporate business segment
Revenues
Revenue in the second quarter increased 3.4% to US$25.2 million quarter-
on-quarter. It was level compared to the same quarter last year.
The Group continued to register growth as it shifts its focus towards
the corporate business segment. Corporate business registered revenue of US$16.4
million, a 7.0% improvement quarter-on-quarter and 10.4% growth year-on-year.
The Group is targeting for the higher-margin corporate business to outpace lowering
contributions from the volume-based consumer segment.
From a product line perspective, broadband revenue grew 6.0% year-on-year
to US$12.5 million. The increase was driven by the corporate broadband business
which grew 17.5% year-on-year and contributed 68.9% of total broadband revenue.
Corporate broadband growth was primarily from the small-and-medium sized business
(SMBs) segment. SMBs are using more corporate broadband services in view of higher
bandwidth and competitive pricing compared to other corporate connectivity
offerings such as lower-end leased lines.
Along with the migration trend from lower-end leased line to corporate
broadband, general pricing for leased lines have become more competitive. Leased
lines revenue in the second quarter grew 2.7% to US$3.2 million year-on-year.
Value Added Services (VAS) sales continued to strengthen in the second
quarter, posting a 14.8% growth year-on-year. In line with the focus in the
corporate business segment, 86.8% of total VAS revenue was from corporate
businesses. Corporate VAS grew by 19.5% year-on-year.
Net Income
Second quarter net income was US$1.6 million (or 12 cents per diluted
share). This was an 8.1% growth year-on-year and a 48.5% growth quarter-on-quarter.
The higher net income was mainly due to stronger corporate business
growth and lower operating expenses.
Operating Costs and Expenses
Gross margin was maintained at over 54% as the Group continues to
effectively manage its telecommunications cost of sales.
There was no change in staff costs. Sales and marketing expenses were
lower by 13.6%, which is in line with the Group’s corporate business-skewed
customer mix. Other general-and-administrative expenses increased by 5.6% year-on-
year primarily due to consultancy fees relating to Sarbanes-Oxley compliance and
business development.
Cash Flow and Cash Balance
In the second quarter, the Group recorded a net cash deficit of about
US$0.6 million. Although the Group generated cash of US$1.6 million from operating
activities for the quarter, US$2.2 million was used on investing activities,
mainly on acquisition of the wireless spectrum license in Singapore and fixed
assets. Another US$0.1 million was used in financing activities primarily for
repayment of capital leases in this quarter. As of June 30, 2005, the Group held
cash and cash equivalents of US$36.7 million compared to US$31.3 million a year
ago.
Additional Business Highlights
- Securing of wireless spectrum rights from the Infocomm Development
Authority of Singapore (IDA) to deploy wireless broadband and fixed wireless
services in Singapore.
- Collaboration with Sun Microsystems and the IDA to launch a
groundbreaking games market access program, “Games MAP”, to international content
providers seeking to deliver gaming content in Asia.
- Partnership with the Australian Government Department of Health and
Ageing to offer broadband services to the healthcare community as part of the
country’s Broadband for Health Program.
- Awarded the Australian Service Excellence Award in the category of
‘National Medium Business’ for the second consecutive year. The award is
Australia’s highest recognition for customer service presented by the Customer
Service Institute of Australia (CSIA).
- Launch of a wireless hotspot service across Hong Kong for mobile
workers and travelers.
Detailed financial statements together with management’s discussion and
analysis are available on the Investor Relations website at www.pacnet.com/investor/.
About Pacific Internet Limited
Pacific Internet Limited or PacNet (NASDAQ: PCNTF) is the largest telco-
independent Internet Communications Service Provider by geographic reach in the
Asia Pacific region. The company has direct presence in Singapore, Hong Kong,
the Philippines, Australia, India, Thailand and Malaysia. PacNet delivers a
comprehensive suite of Internet data, voice and video services to corporate
business and consumer customers. More information at pacnet.com.
For more information please contact:
Mervin Wang Alan Katz
Pacific Internet Limited Cubitt Jacobs & Prosek Communications
(65) 9798 6077 (212) 279 3115 ext 211
[email protected] [email protected] End.