PCCW returns to profit in 2004 Final dividend payment recommended by Board

  • Profit attributable to shareholders for the 12 months ended December 31, 2004 was HK$1.638 billion (US$210 million), compared with a loss of HK$6.1 billion (US$782 million) the previous year
  • Earnings per share HK$0.305
  • Proposed final dividend of HK$0.096 per share
  • Consolidated revenue rose 2 percent to HK$22.895 billion (US$2.935 billion)
  • Total operating costs down 10 percent
  • Net debt reduced by 10 percent to HK$26.2 billion (US$3.359 billion)
  • Sixteen months after launch, 416,000 now TV sign-ups at end-December 2004 (361,000 installed)
  • Unlocked market value of property assets through PCPD
  • Established strategic alliance with China Netcom Group
  • Awarded new fixed carrier license in Hong Kong

HONG KONG, March 30, 2005 - PCCW returned to profit in 2004 and laid the foundations for future growth, opening a significant new chapter in its China expansion and recording major successes in its innovative broadband and fixed-line product offerings.

Having made considerable progress in reducing its debt, PCCW also began to reward shareholders by paying a dividend. The Board has proposed a final dividend of HK$0.096 per share for 2004. The total payment for the year will be HK$0.151 per share, inclusive of the interim dividend of HK$0.055.

The strong performance in 2004 was backed by substantial growth in the Unihub and broadband businesses and accelerated uptake of the now TV service, while the traditional telecom business continued to stabilize in a very competitive market.

During the year, the Company negotiated a strategic alliance with China Network Communications Group (China Netcom Group) that greatly enhances PCCW's prospects on the mainland. Under an agreement announced in January 2005, China Netcom Group agreed to pay approximately HK$7.9 billion (US$1 billion) to acquire 20 percent of the enlarged capital of PCCW, becoming the Company's second largest shareholder.

Deputy Chairman and Group Managing Director Jack So said: "2004 was a year of creating value for shareholders. We were profitable and we made solid progress towards stabilizing core revenues. We paid our first dividend and continued to pay down debt. With the China Netcom alliance, we have the platform for a number of exciting opportunities in mainland China, the world's fastest growing telecoms market."

PCCW recorded an attributable profit of HK$1.638 billion (US$210 million), or earnings per share of HK$0.305, last year, compared with a loss of HK$6.1 billion (US$782 million) in 2003, when the Company booked large provisions for impairment in various assets, including the write-off of the REACH joint venture with Telstra.

Consolidated revenue rose to HK$22.895 billion (US$2.935 billion) from HK$22.55 billion (US$2.89 billion), with sales at Bel-Air contributing HK$5.415 billion (US$694 million).

now TV had a tremendously successful year, with 416,000 sign-ups at end-December 2004 (with 361,000 installed). As at end-December 2004, 53 percent of now TV installations were paying an average of HK$105 per month.

During 2004, content was enhanced by the exclusive Hong Kong rights to ESPN and Star Sports, the introduction of the Disney channels and increased Cantonese-language programming, including a 24-hour news channel.

"PCCW's share of the pay-TV market continues to grow. Our strategy of diversification and adding value to our broadband services is bearing fruit," Mr. So said.

While competition remained intense in the traditional fixed-line market, with revenue in the Telecommunications Services division in 2004 of HK$15.227 billion (US$1.952 billion) compared to HK$16.572 billion (US$2.125 billion) the previous year, the business has clearly begun to stabilize, helped by the introduction of the New Generation Fixed Line (NGFL) services and PCCW's Convergence products (CVG).

The demand for NGFL services, launched in July 2003, has been very strong, with 969,000 lines signed up as of December 31, 2004. The result has significantly improved customer retention rates, and effectively reduced net fixed-line loss from 359,000 to 212,000 on a year-on-year basis. Also, PCCW's new fixed carrier license, issued in January 2005, is enabling the Company to compete more effectively to win back customers.

Management has maintained strict cost controls and strengthened operating efficiencies, resulting in operating costs being reduced by 10 percent in 2004.

The Company also continued to de-leverage its balance sheet, with net debt at December 31, 2004 down 10 percent to HK$26.2 billion (US$3.359 billion) from HK$29.131 billion (US$3.735 billion) a year earlier, and average debt maturity remaining comfortable at approximately 6 years.

PCCW last year moved to unlock the value of its property assets by creating a separately listed property subsidiary, Pacific Century Premium Developments Limited (PCPD). The move allowed PCPD to focus more sharply on property business, generating positive cash flow and prospects for future sales and redevelopment projects. PCCW has a 62 percent stake in PCPD.

Mr. So concluded: "We are confident that 2005 will see further progress towards stabilizing and revitalizing our core businesses, and maximizing the new opportunities afforded by our strategic alliance with China Netcom Group."

2004 Annual Results Announcement [pdf - 116KB]

Webcast of Annual Results Announcement
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2004 Annual Results Presentation [pdf - 6.5MB]

About PCCW

PCCW Limited (SEHK: 0008, ADR-NYSE: PCW) is the largest communications provider in Hong Kong and one of Asia's leading IT&T players. Hong Kong's image as a center of technology excellence continues to be enhanced by PCCW's innovation, especially in new generation fixed-line telephony, broadband, IT, wireless and delivery of home entertainment. Internationally, PCCW provides cutting-edge technical services to network operators, and enables organizations to bring their business to Asia and take Asian business to the rest of the world. The Company's English name was changed in 2002 from "Pacific Century CyberWorks Limited" to "PCCW Limited".

To learn more about PCCW, go to

Video interviews with Jack So, Deputy Chairman and Group Managing Director, and Alex Arena, Group Chief Financial Officer, are available from 19.30 HKT / 11.30 BST on March 30, 2005 on and, also available in audio and text.

For media inquiries, please call:
Joan Wagner
Corporate Communications
Tel: (852) 2514-8883
For investor inquiries, please call:
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Investor Relations
Tel: (852) 2514-5084