NEWS!! PACNET REPORTS 67% GROWTH IN FY NET INCOME
Feb 10, 2004 (AsiaPulse via COMTEX) -- (Corrects date in dateline.)
(Full text of this release can be found at www.asianetnews.net)
SINGAPORE, Feb. 10 /XFNHK-AsiaNet/ --
* Fourth-Quarter 2003 (Year-on-year): Revenues up 9.8 per cent, Net income up more than 300 per cent, Broadband revenue increases 50 per cent.
* Full-Year 2003: Revenue rises 6.7 per cent to US$98.6 million, Net income up 67 per cent, Broadband revenue increases 61 per cent.
Pacific Internet Limited, or PacNet (Nasdaq: PCNTF), today announced its financial results for the fourth-quarter and full-year ended December 31, 2003, posting its eighth consecutive quarter of profit, with full-year revenues rising 6.7 per cent and net income growing 67 per cent from 2002. PacNet is Asia's largest telco-independent Internet Communications Service Provider by geographic reach with direct presence in Singapore, Hong Kong, the Philippines, Australia, India, Thailand and Malaysia.
Highlights of Full-Year 2003 Results
* Revenues grew to US$98.6 million, a 6.7 per cent increase over 2002.
* Broadband revenues grew to US$39.4 million, a 60.7 per cent increase over 2002.
* Net income grew to US$2.8 million, a 67 per cent increase over 2002.
* Net income before stock-based compensation cost and cumulative effect adjustment pertaining to asset retirement obligation charge grew to US$4.4 million, more than doubled compared with US$1.9 million in 2002.
* Cash and cash equivalents grew to US$24.7 million from US$20.7 million one year ago, despite the repayment of loans from shareholders and bank amounting to US$6.2 million.
Highlights of Fourth-Quarter 2003 Results
* Revenues grew to US$25.8 million, a 9.8 per cent increase over the same quarter of 2002.
* Broadband revenues grew to US$11.2 million, a 49.7 per cent increase over the same quarter of 2002.
* Net income grew to US$1.9 million, compared with US$0.5 million, in the fourth quarter of 2002, a nearly four-times increase.
* Net income before stock-based compensation cost and cumulative effect adjustment pertaining to asset retirement obligation charge grew to US$2.2 million, compared with US$0.8 million in the third quarter of 2003.
Ko Kheng Hwa, Chairman of PacNet, said, "PacNet continued to deliver higher revenue and net income in 2003, achieving eight consecutive quarters of net profits. We have also exceeded our net income targets from the third quarter of 2003, growing it by almost four-times. Moving forward, PacNet will continue to leverage its broadband customer base and corporate clients that were built up over the years to extend and strengthen its regional presence."
* The subscriber base for Malaysia is relatively small and hence grouped together with Singapore for presentation purpose.
* The subscriber base in Thailand and India is relatively small and hence combined for presentation purpose.
Full-year revenues grew 6.7 per cent to US$98.6 million, up from US$92.4 million a year ago. Revenues in the fourth quarter grew 9.8 per cent over the same quarter of 2002 to US$25.8 million.
Full-year broadband revenue grew 60.7 per cent to US$39.4 million, making it the largest revenue contributor at 40.0 per cent of the group's total revenue. Broadband revenue in the fourth quarter grew 49.7 per cent over the same quarter last year to US$11.2 million, and grew 8.2 per cent over the previous quarter.
With the expected migration to broadband access, dial-up revenues continued on a downtrend. For the full-year of 2003, dial-up revenues declined 18.2 per cent from 2002. However, quarter-to-quarter comparison showed that the decline in dial-up revenues has slowed to 3.6 per cent from the third quarter of 2003. In terms of subscriber base, a 3.0 per cent increase was registered over the previous quarter, largely due to the increase in the pre-paid subscriber base in the Philippines. This increase in the Philippines is offset by the declines in Singapore and Australia where dial-up subscribers continue to migrate to broadband access. The average revenue per user, or ARPU, of pre-paid subscribers is normally lower than that of post-paid subscribers.
The declining trend observed in leased line revenues in the past quarters had also stabilized to about US$3.4 million in both the third and fourth quarter of 2003. On a full-year basis, the decline in leased line revenues was 9.9 per cent from year-ago level.
Revenues from value added services for the year grew significantly by 20.7 per cent from 2002, driven primarily by the antivirus service launched in Singapore in July 2003. Commission revenues in the travel business for the year decreased 24.7 per cent from a year ago due to the SARS outbreak in the first half of 2003. There was healthy recovery in the second half of the year with quarterly revenues almost back to pre-SARS level.
Operating Costs and Expenses
For the full-year, there was an increase in cost of sales attributed to a shift in revenue mix from the higher yield dial-up and leased line to lower yield broadband products. This resulted in a reduction in gross margins from 58.8 per cent in 2002 to 55.9 per cent in 2003. However, compared with the third quarter of 2003, there was an improvement in the gross margin to 58.0 per cent in the fourth quarter from 54.1 per cent, contributed largely by bandwidth cost savings and the increase in revenue from higher margin value-added services in Singapore.
Staff costs for the full-year 2003 increased 9.2 per cent, largely due to annual salary revision and higher stock-based compensation costs registered in 2003 for the variable accounted options issued in 2001. Excluding the impact of the stock-based compensation cost, as a percentage of revenues, staff costs would have been 27.8 per cent in the fourth quarter of 2003 versus 28.3 per cent the same quarter one year ago. Staff productivity (revenue per staff per quarter) improved from US$22,000 in the fourth quarter of last year to US$25,000 this year.
Sales and marketing expenses for the year increased 7.5 per cent in 2003 over that in 2002 as the Group increased its marketing efforts, particularly in Australia, to capitalize on this growth market. As a percentage of total revenues, sales and marketing expenses were maintained at 3.6 per cent at 2003.
Other general and administrative expenses were lower by 11.2 per cent in 2003 from 2002 as part of the ongoing effort to reduce back-office expenses across the Group.
Full-year net income was US$2.8 million, or 21 US cents per diluted share. From Table 1, net income before the two non-cash charges was US$2.2 million in the fourth-quarter of 2003, representing almost three times that in the third-quarter. On a full-year basis, net income before the non-cash charges was US$4.4 million in 2003, up from US$1.9 million in 2002.
The unconsolidated affiliates in India and Thailand also continued to improve on their operating results. The full-year loss from the unconsolidated affiliates has significantly narrowed from US$1.0 million in 2002 to US$0.1 million in 2003. Besides better performance by these unconsolidated affiliates, the Group registered a net gain on foreign currency in 2003, compared with a net loss registered in 2002.
Investors - Khoo Seok Teng,
Asian Media - Mervin Wang,
US Media - Mark Kollar,
SOURCE: Pacific Internet Limited