PCCW Limited
(Incorporated in Hong Kong with limited liability)
(Stock Code: 0008)
INTERIM RESULTS ANNOUNCEMENT
FOR THE SIX MONTHS ENDED JUNE 30, 2007
The directors (“Directors”) of PCCW Limited (“PCCW” or the “Company”) are pleased to
announce the unaudited consolidated results of the Company and its subsidiaries (collectively the
“Group”) for the six months ended June 30, 2007. These interim financial statements have not been
audited, but have been reviewed by the Company’s Audit Committee and, in accordance with the
Hong Kong Standard on Review Engagements 2410 “Review of Interim Financial Information
Performed by the Independent Auditor of the Entity” issued by the Hong Kong Institute of Certified
Public Accountants, by the Company’s independent auditor, PricewaterhouseCoopers.
• Stronger growth of core business in the first half of 2007 as the Group began to reap the
benefits of its quadruple-play strategy
• Continued strong momentum for now TV - installed base up 35% to 818,000
• 3G mobile subscribers more than doubled to 119,000
• Core revenue increased by 7% to HK$9,507 million; consolidated revenue including PCPD
decreased by 18% to HK$11,607 million, reflecting lower recognition of property
development revenue
• Core EBITDA increased by 4% to HK$3,068 million; consolidated EBITDA including
PCPD decreased by 1% to HK$3,609 million
• Profit attributable to equity holders of the Company increased by 3% to HK$822 million
• Basic earnings per share of 12.16 HK cents
• Declared interim dividend of 6.5 HK cents per share
Note:
Core revenue refers to Group consolidated revenue excluding Pacific Century Premium Developments
Limited (“PCPD”), the Group’s property development and investment business; while core EBITDA refers
to Group consolidated EBITDA excluding PCPD.
1
2
MANAGEMENT REVIEW
PCCW’s core business grew more strongly during the first half of 2007 as the Group began to reap
the benefits of its quadruple-play strategy. Boosted by ground-breaking content deals and
technology innovations, Telecommunications Services (“TSS”), TV & Content, Mobile and PCCW
Solutions all achieved improved results. TSS growth was led by local data services and international
telecommunications services, while fixed-line operations remained stable.
Core revenue for the six months ended June 30, 2007 increased by 7% year-on-year to HK$9,507
million, reflecting strong double-digit revenue growth rates for TV & Content, Mobile and PCCW
Solutions, and a solid 4% year-on-year revenue growth for TSS. Consolidated revenue including
PCPD declined by 18% year-on-year to HK$11,607 million, reflecting lower revenue recognized
from property completion in the Bel-Air project.
Core EBITDA for the six months ended June 30, 2007 increased by 4% year-on-year to HK$3,068
million as the results of TV & Content and Mobile improved significantly, PCCW Solutions earned
a higher margin, and TSS maintained stable earnings. Consolidated EBITDA including PCPD
declined by 1% year-on-year to HK$3,609 million, reflecting a lower contribution from PCPD.
Profit attributable to equity holders of the Company increased by 3% year-on-year to HK$822
million, and basic earnings per share increased by 3% year-on-year to 12.16 HK cents. The board of
Directors (the “Board”) has resolved to declare an interim dividend of 6.5 HK cents per share for
the six months ended June 30, 2007.
OUTLOOK
The results for the first half of 2007 reflect the continuing growth of the telecommunications
services business, plus significant investment in the development of the Group’s growth businesses,
including TV & Content and Mobile, as part of our quadruple-play strategy. Much of the benefit
from investments in these growth businesses will come in future years, but early signs of the value
of these investments could be seen already in the first half of 2007.
The primary aim for our stabilized telecommunications services business is to increase revenue by
leveraging existing network assets. Healthy revenue growth was achieved in the first half of 2007,
and there are good prospects for further revenue improvement during the second half of 2007,
against the backdrop of a growing economy and the introduction of new value-added services. The
eye multimedia service platform, the one Communications integrated fixed/mobile solution, and
the vast expansion of our Wi-Fi hotspots in Hong Kong, all introduced during the first half of 2007,
provide potential new sources of revenue for the telecommunications services business.
The strong growth of TV & Content revenue in the first half of 2007 should continue in the second
half of the year as the new Barclays Premier League season gets under way, new revenue sources
from advertising and interactive services are further developed, and High Definition (“HD”) TV
programming is launched. The cross-platform delivery of now TV content and interactive services,
and the shift to HD, should also benefit our mobile, broadband and fixed-line businesses.
3
Our mobile business should continue to benefit in the second half of 2007 from the integration of its
marketing activities with those of the rest of the Group, the ongoing shift to 3G with its higher
levels of average revenue per user (“ARPU”) and the implementation of our integrated wireless
strategy. The growing amount of now TV content available on mobile, including the now
SPORTS channels, and the recent launch of new value-added services including PUSH eMail and
HD on mobile, should also support customer and ARPU growth.
The growth of external revenue from our traditional internal support businesses such as Teleservices,
PCCW Solutions and network subsidiary Cascade Limited (“CASCADE”) shows promise for
further development. The contact centers of Teleservices are benefiting from the growing popularity
of business process outsourcing, while our IT solutions arm, PCCW Solutions, continues to win
contracts in Hong Kong, mainland China, and elsewhere in Asia Pacific, and CASCADE is growing
its business in both Asia and the Middle East.
With all four quadruple-play delivery platforms now in place, our focus in the second half of 2007
will remain on offering a growing variety of content and interactive services across all four
platforms. We will also continue to look for ways to leverage internationally our experience and
expertise in Hong Kong. We have laid a solid foundation for the Company’s future, and are now
building a stronger business on that foundation.
4
FINANCIAL REVIEW BY SEGMENTS
For the six months ended
HK$ million
Jun 30,
2007
Jun 30,
2006
Dec 31,
2006
Better/
(Worse)
y-o-y
Revenue
1
TSS 7,706 7,405 7,969 4%
TV & Content 715 505 497 42%
Mobile 668 585 651 14%
PCCW Solutions 826 737 915 12%
Other Businesses 165 162 166 2%
Eliminations (573) (546) (672) (5)%
Total Revenue (excluding PCPD) 9,507 8,848 9,526 7%
PCPD 2,100 5,276 1,987 (60)%
Consolidated Revenue 11,607 14,124 11,513 (18)%
Cost of sales (5,199) (7,555) (5,131) 31%
Operating costs before depreciation,
amortization and restructuring costs (2,799) (2,917) (3,207) 4%
EBITDA
1, 2
TSS 3,431 3,414 3,589 1%
TV & Content (74) (155) (156) 52%
Mobile (56) (70) (116) 20%
PCCW Solutions 102 83 68 23%
Other Businesses (335) (328) (458) (2)%
Total EBITDA (excluding PCPD) 3,068 2,944 2,927 4%
PCPD 541 708 248 (24)%
Consolidated EBITDA
2
3,609 3,652 3,175 (1)%
Consolidated EBITDA Margin
2,4
31% 26% 28% 5%
Depreciation and amortization (1,610) (1,467) (1,569) (10)%
Gain/(Loss) on disposal of property, plant
and equipment, investment properties and
interests in leasehold land 11 (2) (23) N/A
Restructuring costs -- -- (6) N/A
Other gains/(losses), net 55 98 (56) (44)%
Losses on property, plant and equipment (2) -- (11) N/A
Segment results
1, 3
TSS 2,392 2,401 2,549 0%
TV & Content (150) (211) (228) 29%
Mobile (361) (292) (409) (24)%
PCCW Solutions 73 62 46 18%
Other Businesses (422) (380) (659) (11)%
Total segment results (excluding PCPD) 1,532 1,580 1,299 (3)%
PCPD 531 701 211 (24)%
Consolidated segment results
3
2,063 2,281 1,510 (10)%
5
Note 1 Certain comparative figures have been restated to conform with the business segment
presentation in the current period:
- The Group’s directories business, previously included in Other Businesses, has been
reclassified to TV & Content.
- Certain IP-based international connectivity products and services, previously included in
TSS-Other Services, have been reclassified to TSS-International Telecommunications
Services.
Note 2 EBITDA represents earnings before interest income, finance costs, income tax, depreciation,
amortization, gain/loss on disposal of property, plant and equipment, investment properties and
interests in leasehold land, net other gains/losses, losses on property, plant and equipment,
restructuring costs, impairment losses on interests in jointly controlled companies and associates
and the Group’s share of results of jointly controlled companies and associates. While EBITDA
is commonly used in the telecommunications industry worldwide as an indicator of operating
performance, leverage and liquidity, it is not presented as a measure of operating performance in
accordance with the Hong Kong Financial Reporting Standards and should not be considered as
representing net cash flows from operating activities. The computation of the Group’s EBITDA
may not be comparable to similarly titled measures of other companies.
Note 3 Segment results represent earnings before interest income, finance costs, income tax, impairment
losses on interests in jointly controlled companies and associates and the Group’s share of
results of jointly controlled companies and associates.
Note 4 Year-on-year percentage change was based on absolute percentage change.
Note 5 The market share figures for the six months ended June 30, 2007 are provisional.
Note 6 As of period end, with exception of International Direct Dial (“IDD”) minutes, which is the total
for the period.
Note 7 Gross debt refers to the principal amount of short-term borrowings and long-term liabilities. Net
debt refers to the principal amount of short-term borrowings and long-term liabilities minus cash
and cash equivalents and certain restricted cash.
Note 8 Group capital expenditure includes additions to property, plant and equipment, investment
properties and interests in leasehold land held for own use. Interests in leasehold land held for
development of HK$nil (June 30, 2006: HK$495 million) are excluded.
6
OPERATING DRIVERS
6
Jun 30,
2007
Jun 30,
2006
Dec 31,
2006
Better/ (Worse)
y-o-y h-o-h
Exchange lines in service (’000) 2,590 2,579 2,587 0% 0%
Business lines (’000) 1,183 1,176 1,180 1% 0%
Residential lines (’000) 1,407 1,403 1,407 0% 0%
Fixed line market share
4, 5
Business lines 69% 70% 69% (1)% 0%
Residential lines 66% 66% 66% 0% 0%
Total broadband access lines (’000) 1,176 998 1,117 18% 5%
(Consumer, business and wholesale customers)
Retail consumer broadband subscribers (’000) 1,005 840 952 20% 6%
Retail business broadband subscribers (’000) 104 94 99 11% 5%
Consumer narrowband subscribers (’000) 117 132 122 (11)% (4)%
Traditional data (Exit Gbps) 614 351 485 75% 27%
Retail IDD minutes (’M mins) 944 819 906 15% 4%
International Private Leased Circuit (“IPLC”) bandwidth
(Exit Mbps)
47,098 15,489 22,994 204% 105%
Mobile subscribers (’000) 957 781 921 23% 4%
3G post-paid (’000) 119 -- 55 N/A 116%
2G post-paid (’000) 462 491 516 (6)% (10)%
2G prepaid (’000) 376 290 350 30% 7%
now TV
Installed base (’000) 818 608 758 35% 8%
Paying base (’000) 560 444 501 26% 12%
7
TSS
The table below sets out the financial performance of TSS for the six months ended June 30, 2007
and June 30, 2006:
For the six months ended
HK$ million
Jun 30,
2007
Jun 30,
2006
Dec 31,
2006
Better/
(Worse)
y-o-y
Local Telephony Services 2,343 2,352 2,336 0%
Local Data Services 2,214 2,092 2,159 6%
International Telecommunications Services
1
1,591 1,394 1,497 14%
Other Services
1
1,558 1,567 1,977 (1)%
－－－－－－ －－－
TSS Revenue 7,706 7,405 7,969 4%
Cost of sales (2,466) (2,065) (2,219) (19)%
Operating costs before depreciation and amortization (1,809) (1,926) (2,161) 6%
－－－－－－ －－－
TSS EBITDA
2
3,431 3,414 3,589 1%
======= ======= =======
TSS EBITDA Margin
2,4
45% 46% 45% (1)%
======= ======= =======
TSS returned to growth in the first half of 2007. Revenue for the six months ended June 30, 2007
increased by 4% year-on-year to HK$7,706 million. International telecommunications and local
data services revenues grew at a healthy pace while local telephony and other services revenues
remained stable. EBITDA remained stable at HK$3,431 million.
Local Telephony Services. Local telephony services revenue for the six months ended June 30,
2007 continued to be stable at HK$2,343 million.
The number of direct exchange lines operated by the Group held steady at 2,590,000 during the first
half of 2007, as PCCW strategically managed net fixed-line gain and maintained a stable market
share of approximately 66% for residential lines and 69% for business lines, in an environment of
modest growth in the Hong Kong fixed-line market. ARPU also remained stable during the period.
Local Data Services. Local data services revenue for the six months ended June 30, 2007 increased
by 6% year-on-year to HK$2,214 million, reflecting improvements in both broadband network and
local data revenue.
Strong growth of broadband network revenue was led by a double-digit rise in revenue from retail
consumer and business broadband services, while revenue from retail narrowband and wholesale
broadband declined. The pricing for consumer broadband Internet access products and services
stabilized during the course of the period.
8
NETVIGATOR maintained its market leadership in broadband access while the total broadband
access lines increased by 18% year-on-year to 1,176,000 at the end of June 2007. The strong rise
was supported by the growth momentum of now TV, and by rising demand for the Group’s
Internet value-added services. The photo and video file-sharing service, snaap!, was launched on
the Group’s quadruple-play platforms during the period.
Local data revenue grew at a healthy pace as customer demand for bandwidth grew on increasing
deployment of high bandwidth applications. This has resulted in a 75% year-on-year jump in
bandwidth sold, which more than offset the impact from price compression.
International Telecommunications Services
1
. International Telecommunications Services revenue
for the six months ended June 30, 2007 increased by 14% year-on-year to HK$1,591 million. The
revenue increase was led by growth in wholesale business for both traditional and IP-based
international connectivity services, e.g. the Asia Pacific and the Middle East. Strong traffic growth
more than offset the impact from lower prices during the period. IPLC bandwidth grew strongly by
105% during the six-month period to 47,098 Mbps. Retail IDD minutes increased by 15% year-on-
year to 944 million minutes. Though retail IDD prices declined further during the period, downward
pressure is easing.
Other Services
1
. Other services revenue for the six months ended June 30, 2007 decreased
marginally by 1% year-on-year to HK$1,558 million. Revenue from CASCADE during the period
was lower compared to a year ago primarily due to the timing of contract completions. This more
than offset higher revenues from computer and customer premise equipment sales and growth of the
Teleservices (i.e. contact centers) business.
TV & Content
For the six months ended
HK$ million
Jun 30,
2007
Jun 30,
2006
Dec 31,
2006
Better/
(Worse)
y-o-y
TV & Content Revenue
1
715 505 497 42%
TV & Content EBITDA
1, 2
(74) (155) (156) 52%
Revenue from TV & Content surged 42% year-on-year to HK$715 million for the six months ended
June 30, 2007. now TV’s strong growth momentum contributed to more than halving the
segment’s EBITDA loss to HK$74 million.
At the end of June 2007, now TV installed services hit 818,000, up by 35% from a year earlier.
The paying base reached 560,000 while ARPU climbed a further 19% from December 2006 to
HK$166 per month.
The strong improvement in ARPU during the first half of 2007 was in part due to the popular
demand for the Mega Sports Pack which had a promotional retail price of HK$178 prior to August
2007 and is currently retailing at HK$218. Further, more customers are subscribing to higher value
mini-packs and super value plans, which also helped to increase ARPU.
9
The Mega Sports Pack, launched in March 2007, offers the strongest line-up of major international
sporting events in Hong Kong. The Pack features premier football competitions including the
Barclays Premier League beginning in August 2007, the UEFA Champions League, the FA Cup, the
Italian Serie A, and Japan’s J-League. Other sporting events also featured include the National
Basketball Association, the National Hockey League, Major League Baseball, Formula 1 Grand
Prix, Wimbledon tennis, and major volleyball and snooker tournaments.
As part of our quadruple-play strategy, the now SPORTS channels were also launched on PCCW
mobile, now.com.hk and the new eye multimedia service platform. For example, the Barclays
Premier League live matches can be viewed on all four quadruple-play platforms beginning in
August 2007.
now TV’s content line-up continued to grow in variety reaching 143 local and international
channels at the end of June 2007, including 71 exclusive world-class movie, sports, news and
general entertainment channels.
During the first half of 2007, the Group’s directories business was integrated with the now TV
advertising and now shop merchandising and transaction units. The integrated Advertising and
Interactive Services operation explores and develops new revenue opportunities from interactive
advertising, merchandising and a variety of transaction-based services. One such initiative was the
recent launch of the Hang Seng TV Securities Trading Service, the first such service in Hong Kong,
allowing personal e-banking customers with securities accounts to trade local securities on two
now TV channels.
now.com.hk continued to bring high-quality value-added services exclusively to PCCW’s
broadband customers. At the end of June 2007, 238,000 NETVIGATOR customers subscribed to
the service, an increase of 4% from December 2006. During the first half of 2007, MOOV, the
largest digital music service in Hong Kong, strengthened its music library to over 100,000 songs
and music videos. MOOV’s popularity contributed to an increase in the ARPU of now.com.hk
during the period. The MOOV service is now available on the NETVIGATOR broadband, PCCW
mobile and eye multimedia service platforms.
Mobile
For the six months ended
HK$ million
Jun 30,
2007
Jun 30,
2006
Dec 31,
2006
Better/
(Worse)
y-o-y
Mobile Revenue 668 585 651 14%
Mobile EBITDA
2
(56) (70) (116) 20%
Revenue from Mobile increased by 14% year-on-year to HK$668 million for the six months ended
June 30, 2007, reflecting contribution from a growing 3G subscriber base with a higher ARPU.
Mobile EBITDA loss narrowed by 20% year-on-year to HK$56 million in the first half of 2007.
10
The Group continued to enhance its mobile network quality and coverage, with around 1,500 cell
sites for 3G and a similar number for 2G in place at the end of June 2007. Leveraging on the
Group’s overall large customer base and extensive distribution channels, total mobile subscribers
increased by 23% year-on-year to 957,000 at the end of June 2007. Our 3G subscriber base more
than doubled from 55,000 at the end of December 2006 to 119,000 at the end of June 2007. The
total 2G subscriber base increased by 7% year-on-year though the number of 2G post-paid
subscribers decreased primarily as a result of our efforts to improve customer quality and ARPU.
The ARPU of our 3G service increased by 14% from the end of December 2006 to HK$229 at the
end of June 2007 due to increasing uptake of value-added services. This, together with a growing
contribution from an increasingly larger 3G subscriber base, have resulted in an improvement in
Mobile’s blended (2G and 3G) post-paid ARPU, which increased by 7% from the end of December
2006 to HK$158 at the end of June 2007.
Efforts to expand 3G ARPU and increase the appeal of mobile value-added services to a wider
customer base continued in earnest. In addition to snaap!, PCCW mobile further enriched the
customer experience through the launch in April 2007 of “now SPORTS on mobile”, featuring
exclusive premier sports content and world-class live sporting events. The total number of sports,
general entertainment and news channels offered by “now on mobile” and “now SPORTS on
mobile” reached 20 in August 2007. PUSH eMail and the one Communications integrated
fixed/mobile solution were also launched, targeting the commercial market.
PCCW Solutions
For the six months ended
HK$ million
Jun 30,
2007
Jun 30,
2006
Dec 31,
2006
Better/
(Worse)
y-o-y
PCCW Solutions Revenue 826 737 915 12%
PCCW Solutions EBITDA
2
102 83 68 23%
PCCW Solutions revenue for the six months ended June 30, 2007 increased by 12% year-on-year to
HK$826 million. EBITDA increased by 23% year-on-year to HK$102 million.
During the first half of 2007, PCCW Solutions was awarded significant contracts that strengthen its
recurring revenue base. Major contracts awarded include a 7-year data center and related services
contract from one of the major healthcare organizations in Hong Kong, and a 10-year contract from
the Hong Kong Police Force for the design, installation, and maintenance of the Versatile Maritime
Policing Response System. Sino Land Company Limited also placed a contract for the design,
supply and installation of an LED video wall and Display Control System for CityWall - Vision
City in Tsuen Wan.
PCCW Solutions continued to expand its services beyond Hong Kong. It was awarded an
application development-outsourcing contract from MTR Corporation Limited to develop and
deploy a Maintenance Management Information System for its railway projects in mainland China;
and a contract from a renowned luxury brand for the provision of Point of Sales/Customer Relations
Management Solutions for two of its cosmetic brands across the Asia Pacific region.
11
In recognition of the unit’s superior outsourcing services, two IT Outsourcing Awards were
conferred on PCCW Solutions, one by the 21
st
Century Business Herald, a major China business
newspaper, and the other by Computerworld Hong Kong magazine. These accolades reinforce the
reputation of PCCW Solutions as the leading IT outsourcing provider in the Greater China region.
PCPD
PCPD revenue for the six months ended June 30, 2007 decreased by 60% year-on-year to HK$2,100
million, reflecting lower revenue recognized from property completion in the Bel-Air project. In the
first half of 2007, EBITDA declined by 24% year-on-year to HK$541 million.
The luxury residential market continued to demonstrate strong growth, which was evidenced by
PCPD’s sales success following the launch of Bel-Air No.8 in March 2007. The telephone exchange
redevelopment project at Wo Fung Street, west of Central, Hong Kong continued to make progress,
and pre-sales are expected by the end of 2007. In mainland China, development work for the
prestigious residential project at Pacific Century Place in the Chaoyang District, Beijing
commenced in the first half of 2007, and the project is expected to complete in 2009.
For more information about the performance of PCPD, please refer to its 2007 interim results
released on August 29, 2007.
Other Businesses
Other Businesses primarily includes the Group’s telecommunications business in Taiwan, its
wireless broadband business in the United Kingdom, and all corporate support functions. Revenue
from Other Businesses increased by 2% year-on-year to HK$165 million for the six months ended
June 30, 2007.
Eliminations
Eliminations were HK$573 million for the six months ended June 30, 2007. Eliminations primarily
relate to internal charges for telecommunications services consumed, IT support and computer
system network charges, customer support services and rental among the Group’s business units.
COSTS
Cost of Sales
For the six months ended
HK$ million
Jun 30,
2007
Jun 30,
2006
Dec 31,
2006
Better/
(Worse)
y-o-y
The Group (excluding PCPD) 3,787 3,131 3,478 (21)%
PCPD 1,412 4,424 1,653 68%
－－－－－－－－ －－－－
Group Consolidated Total 5,199 7,555 5,131 31%
========= ========= =========
12
The Group’s consolidated total cost of sales for the six months ended June 30, 2007 declined by
31% year-on-year to HK$5,199 million, due primarily to a 68% decline in PCPD’s cost of sales to
HK$1,412 million on lower recognition of sales of Bel-Air residential units. The Group’s cost of
sales excluding PCPD increased by 21% year-on-year to HK$3,787 million, reflecting a higher cost
of sales for TSS that was in line with its revenue growth, and higher content and customer
acquisition costs for the TV & Content and Mobile businesses.
General and Administrative Expenses
For the six months ended
HK$ million
Jun 30,
2007
Jun 30,
2006
Dec 31,
2006
Better/
(Worse)
y-o-y
Staff costs 1,342 1,444 1,545 7%
Rent, rates and utilities 469 437 439 (7)%
Other operating costs 988 1,036 1,223 5%
－－－－－－－－ －－－－
Total operating costs before depreciation, amortization and
restructuring costs
2,799 2,917 3,207 4%
Depreciation and amortization 1,610 1,467 1,569 (10)%
(Gain)/Loss on disposal of property, plant and equipment,
investment properties and interests in leasehold land (11) 2 23 N/A
Restructuring costs –– 6N/A
－－－－－－－－ －－－－
General and administrative expenses 4,398 4,386 4,805 0%
========= ========= =========
General and administrative expenses for the six months ended June 30, 2007 remained stable at
HK$4,398 million. Total operating costs before depreciation, amortization and restructuring costs
declined by 4% year-on-year to HK$2,799 million primarily due to greater efficiency from fully
integrating the mobile operations into the Group. However, higher costs were incurred for TV &
Content as business activities increased during the period.
Depreciation and amortization increased by 10% year-on-year to HK$1,610 million, reflecting the
depreciation of the 3G mobile network.
EBITDA
2
Core EBITDA for the six months ended June 30, 2007 increased by 4% year-on-year to HK$3,068
million, as TSS EBITDA increased by 1% to HK$3,431 million, PCCW Solutions EBITDA
increased by 23% to HK$102 million, and the EBITDA losses of TV & Content and Mobile were
greatly reduced. The significant improvement in the TV & Content and Mobile results reflected
progress in moving beyond the early stage of the business life cycle, while the PCCW Solutions
EBITDA increase was due to improved margins of contracts completed and worked-on during the
period.
Consolidated EBITDA including PCPD decreased by 1% year-on-year to HK$3,609 million, due
primarily to a 24% year-on-year decline in PCPD EBITDA to HK$541 million on lower recognition
of Bel-Air sales.
13
Consolidated EBITDA margin improved by 5 percentage points to 31% in the first half of 2007
from 26% in the first half of 2006, as the PCPD margin improved. Core EBITDA margin and TSS
EBITDA margin remained relatively stable at 32% and 45%, respectively.
Other Gains, Net
Net other gains decreased to HK$55 million for the six months ended June 30, 2007 from HK$98
million in the first half of 2006. The net gains for the first half of 2007 primarily included net
realized gains on derivative financial instruments. The net gains in the first half of 2006 primarily
included a write back of a provision for loss on legal claims, which was partially offset by net
realized and unrealized losses on derivative financial instruments.
Segment Results
3
Core segment results, which exclude PCPD, were 3% lower than the corresponding period a year
ago at HK$1,532 million, as higher depreciation and amortization charges and lower net other gains
offset a 4% year-on-year rise in core EBITDA, as mentioned above.
Consolidated segment results including PCPD declined by 10% year-on-year to HK$2,063 million
due primarily to the 24% year-on-year reduction in the PCPD segment result to HK$531 million and
the 3% reduction in core segment results.
Interest Income and Finance Costs
Finance costs decreased by 9% year-on-year to HK$846 million for the six months ended June 30,
2007 due to the repayment of the US$450 million guaranteed convertible bonds and the US$456
million guaranteed notes in January 2007. Interest income decreased by 24% year-on-year to
HK$236 million. Net finance cost remained stable during the period. Average cost of debt for the
six months ended June 30, 2007 improved to 6% and average debt maturity was approximately 5
years.
Share of Results of Jointly Controlled Companies and Associates
Share of net losses of jointly controlled companies and associates was HK$1 million for the six
months ended June 30, 2007 (June 30, 2006: a profit of HK$18 million), which was mainly due to
the share of losses from 網通寬帶網絡有限責任公司, a jointly controlled company, in the first half
of 2007. The share of results of associates for the first half of 2006 primarily included the share of
profits from Great Eastern Telecommunications Limited.
Taxation
Taxation expenses for the six months ended June 30, 2007 decreased by 38% year-on-year to
HK$377 million and the Group’s effective tax rate for the six months ended June 30, 2007 was 26%
(June 30, 2006: 36%). The reduction of taxation expenses and effective tax rate was mainly due to
the recognition of deferred tax assets for tax losses and a reduction of the corporate income tax rate
in the People’s Republic of China (see Note 6 of the Financial Statements for details). This rate is
higher than the statutory tax rate of 17.5%, mainly due to the fact that losses of some companies
cannot be offset against profits of other companies for Hong Kong tax purposes and the
disallowance of financing costs relating to the financing of non-income-producing assets. Excluding
these factors, the Group would have an effective tax rate around the statutory tax rate of 17.5%.
14
Minority Interests
Minority interests of HK$253 million primarily represented the net profit attributable to the
minority shareholders of PCPD.
Profit Attributable to Equity Holders of the Company
Profit attributable to equity holders of the Company for the six months ended June 30, 2007
increased by 3% from the corresponding period a year ago to HK$822 million (June 30, 2006:
HK$796 million).
LIQUIDITY AND CAPITAL RESOURCES
Net cash generated from operating activities for the six months ended June 30, 2007 increased to
HK$1,899 million (June 30, 2006: HK$1,497 million) primarily due to lower tax paid and higher
receipts from the Cyberport project during the period.
The Group’s gross debt
7
totaled HK$27,775 million as at June 30, 2007 (December 31, 2006:
HK$28,977 million). Cash and cash equivalents decreased to HK$4,538 million (December 31,
2006: HK$4,951 million). The Group’s net debt
7
was HK$21,765 million as at June 30, 2007
compared to HK$19,725 million as at December 31, 2006. The increase in net debt was mainly due
to the payment of the 2006 final dividend and investments made during the period.
The Group continued to prudently manage its debt profile. On January 24, 2007, the Group
exercised an option under the US$456 million 7.88% guaranteed notes due 2013 and redeemed the
notes in full. On January 29, 2007, the Group further redeemed in full the US$450 million 1%
guaranteed convertible bonds upon maturity.
As at June 30, 2007, the Group had a total of HK$16,724 million in committed banking facilities
available for liquidity and debt retirement, of which HK$4,550 million remained undrawn.
The Cyberport project continued to generate surplus proceeds from the sale of Bel-Air units. Net
surplus proceeds distributed to the Group over the course of the Cyberport project have totaled
HK$4,624 million, including HK$992 million received in the first half of 2007.
The Group's gross debt
7
to total assets improved to 56% as at June 30, 2007.
Credit Ratings of PCCW-HKT Telephone Limited
In July 2007, subsequent to a review of the Group’s strategy and the performance of its core
business, all three rating agencies revised the rating outlook on PCCW-HKT Telephone Limited
(“HKTC”), an indirect wholly-owned subsidiary of the Company, and affirmed their investment
grade ratings assigned to HKTC as follows:
• Moody’s Investors Service revised the outlook to positive from stable and affirmed the rating at
Baa2;
• Standard & Poor’s Ratings Services revised the outlook to positive from stable and affirmed the
rating at BBB; and
• Fitch Ratings revised the outlook to stable from negative and affirmed the rating at BBB+.
15
CAPITAL EXPENDITURE
8
Group capital expenditure for the six months ended June 30, 2007 decreased to HK$1,036 million
(June 30, 2006: HK$1,070 million). The majority of capital expenditure was spent on meeting the
demand for new products and services, such as now TV, broadband network expansion, mobile
network enhancement and new initiatives, including the next generation fixed-line services.
PCCW has made significant investments in its fixed-line and mobile networks in previous years.
These include the upgrade and expansion of network coverage, and the building of a platform for
broadband and fast developing IP initiatives. PCCW will continue to invest prudently, using
assessment criteria including internal rate of return, net present value and payback period.
HEDGING
Market risk arises from foreign currency and interest rate exposure related to cash investments and
borrowings. As a matter of policy, the Group continues to manage the market risk directly relating
to its operations and financing and does not undertake any speculative derivative trading activities.
The Finance and Management Committee, a sub-committee of the Executive Committee of the
Board, determines appropriate risk management activities with the aim of prudently managing the
market risk associated with transactions undertaken in the normal course of the Group's business.
All treasury risk management activities are carried out in accordance with the policies and
guidelines approved by the Finance and Management Committee and the Executive Committee,
which are reviewed on a regular basis.
In the normal course of business, the Group enters into forward contracts and other derivative
contracts in order to limit its exposure to adverse fluctuations in foreign currency exchange rates
and interest rates. These instruments are executed with creditworthy financial institutions, and all
contracts are denominated in currencies of major industrial countries. As at June 30, 2007, all cross
currency swap contracts were designated as cash flow hedges for the Group’s foreign currency
denominated long-term liabilities.
CHARGE ON ASSETS
As at June 30, 2007, certain assets of the Group with an aggregate carrying value of HK$1,454
million (December 31, 2006: HK$119 million) were pledged to secure loans and banking facilities
of the Group.
CONTINGENT LIABILITIES
HK$ million As at Jun 30, As at Dec 31,
2007 2006
(Unaudited) (Audited)
Performance guarantee 616 611
Others 102 29
718 640
16
a. HKTC is in dispute with Hong Kong’s Inland Revenue Department (the “IRD”) regarding
the deductibility of certain finance expenses. The IRD had raised assessments for part of the
disputed finance expenses for the years of assessment 2000/01 to 2005/06 on April 21, 2005,
February 3, 2006 and February 5, 2007. HKTC had lodged objections to the assessments and
requested to hold over the tax assessed through the purchase of Tax Reserve Certificates.
Based on the information available to the Group to date, HKTC has made a provision based
on the best estimate of the amount that may ultimately be required to settle the dispute. The
unprovided tax expense as at June 30, 2007 in respect of the subject dispute was
approximately HK$220 million. The Directors consider that the impact of any unprovided
amounts which may materialize is immaterial.
b. The Group is subject to certain corporate guarantee obligations to guarantee performance of
its wholly-owned subsidiaries in the normal course of their businesses. The amount of
liabilities arising from such obligations, if any, cannot be ascertained but the Directors are of
the opinion that any resulting liability would not materially affect the financial position of the
Group.
HUMAN RESOURCES
As at June 30, 2007, the Group had approximately 15,354 employees (June 30, 2006: 14,453).
About three quarters of these employees work in Hong Kong and the others are based outside of
Hong Kong, primarily in mainland China. The Company has established incentive bonus schemes
designed to motivate and reward employees at all levels to achieve the Company’s business
performance targets. Payment of bonuses is generally based on achievement of EBITDA
2
and net
profit after tax target for the Group as a whole, and revenue and EBITDA
2
targets for the
Company’s individual businesses. The Company also operates a discretionary employee share
option scheme and two share award schemes to motivate employee performance to enhance
shareholders’ value.
INTERIM DIVIDEND
The Board has resolved to declare an interim dividend of 6.5 HK cents (June 30, 2006: 6.5 HK cents)
per share for the six months ended June 30, 2007 to shareholders of the Company whose names
appear on the Register of Members of the Company on September 27, 2007, payable on or around
October 8, 2007.
CLOSURE OF REGISTER OF MEMBERS
For the purpose of determining shareholders’ entitlements to the interim dividend, the Register of
Members will be closed from September 24, 2007 to September 27, 2007 (both days inclusive),
during which period no transfer of shares of the Company will be effected. In order to qualify for
the interim dividend of 6.5 HK cents per share, all transfers, accompanied by the relevant share
certificates, should be lodged with the Company’s Registrars, Computershare Hong Kong Investor
Services Limited, Transfer Office, Shops 1712-1716, 17th Floor, Hopewell Centre, 183 Queen’s
Road East, Wan Chai, Hong Kong, for registration no later than 4:30 p.m. on September 21, 2007.
Dividend warrants will be dispatched to shareholders of the Company on or around October 8, 2007.
PURCHASE, SALE OR REDEMPTION OF LISTED SECURITIES
During the six months ended June 30, 2007, neither the Company nor its subsidiaries purchased,
sold or redeemed any of its listed securities.
17
AUDIT COMMITTEE
The Company’s Audit Committee has reviewed the accounting policies adopted by the Group and
the unaudited interim financial statements of the Group for the six months ended June 30, 2007.
Such interim financial statements have not been audited but have been reviewed by the Company’s
auditor.
COMPLIANCE WITH THE CODE ON CORPORATE GOVERNANCE PRACTICES
The Company is committed to maintaining a high standard of corporate governance and strives for a
transparent, responsible and value-driven management focused on enhancing the value of the
Company to its shareholders. The corporate governance principles of the Company place emphasis
on upholding a high standard of ethics and integrity in all aspects of its business, and on ensuring
that affairs are conducted in accordance with applicable laws and regulations.
The Company has applied the principles and complied with all the code provisions of the Code on
Corporate Governance Practices contained in Appendix 14 of the Rules Governing the Listing of
Securities on
PUBLICATION OF RESULTS ANNOUNCEMENT AND INTERIM REPORT
This announcement is published on the websites of the Company (www.pccw.com) and Hong Kong
Exchanges and Clearing Limited (www.hkex.com.hk). The 2007 interim report will be dispatched
to shareholders of the Company and available on the above websites in due course.
By Order of the Board
PCCW Limited
Philana WY Poon
Group General Counsel and Company Secretary
Hong Kong, August 29, 2007
18
CONSOLIDATED INCOME STATEMENT
For the six months ended June 30, 2007
In HK$ million (except for earnings per share) Note 2007 2006
(Unaudited) (Unaudited)
Turnover 3 11,607 14,124
Cost of sales (5,199) (7,555)
General and administrative expenses (4,398) (4,386)
Other gains, net 4 55 98
Losses on property, plant and equipment (2) –
Interest income 236 312
Finance costs (846) (928)
Share of results of jointly controlled companies (8) –
Share of results of associates 7 18
Profit before taxation 5 1,452 1,683
Income tax 6 (377) (609)
Profit for the period 3 1,075 1,074
Attributable to:
Equity holders of the Company 822 796
Minority interests 253 278
Profit for the period 1,075 1,074
Interim dividend declared after the interim period 7(a) 440 438
Earnings per share 8
Basic 12.16 cents 11.83 cents
Diluted 11.96 cents 11.79 cents
19
CONSOLIDATED BALANCE SHEET
As at June 30, 2007
As at As at
In HK$ million June 30, December 31,
Note 2007 2006
(Unaudited) (Audited)
ASSETS AND LIABILITIES
Non-current assets
Property, plant and equipment 16,107 16,497
Investment properties 3,761 3,639
Interests in leasehold land 627 1,140
Properties under development 808 2,039
Goodwill 3,140 3,140
Intangible assets 1,387 1,349
Interest in jointly controlled companies 320 10
Interest in associates 640 637
Held-to-maturity investments 7 12
Available-for-sale financial assets 615 496
Amounts due from related companies 12 16
Net lease payments receivable 114 203
Deferred tax assets 208 174
Other non-current assets 445 359
28,191 29,711
Current assets
Properties under development 6,795 1,231
Properties for sale 97 290
Sales proceeds held in stakeholders’ accounts 3,472 3,472
Restricted cash 1,907 5,128
Prepayments, deposits and other current assets 1,747 1,361
Inventories 617 544
Amounts due from related companies 26 44
Derivative financial instruments 82 –
Financial assets at fair value through profit or loss 41 50
Accounts receivable, net 9 2,432 2,580
Tax recoverable – 64
Cash and cash equivalents 4,538 4,951
21,754 19,715
20
CONSOLIDATED BALANCE SHEET (CONTINUED)
As at June 30, 2007
As at As at
In HK$ million June 30, December 31,
Note 2007 2006
(Unaudited) (Audited)
Current liabilities
Short-term borrowings (12,174) (13,995)
Derivative financial instruments (20) (555)
Accounts payable 10 (1,005) (1,022)
Accruals, other payables and deferred income (3,974) (4,989)
Provisions (1,463) (1,914)
Mobile carrier licence fee liabilities (63) (58)
Amounts due to related companies (607) (886)
Gross amount due to customers for contract work – (7)
Advances from customers (2,479) (1,437)
Taxation (398) (794)
(22,183) (25,657)
Net current liabilities (429) (5,942)
Total assets less current liabilities 27,762 23,769
Non-current liabilities
Long-term liabilities (15,523) (15,438)
Amounts due to minority shareholders of subsidiaries (11) (11)
Deferred tax liabilities (2,047) (2,179)
Deferred income (1,084) (1,015)
Defined benefit liability (10) (11)
Provisions (4,581) (1,591)
Mobile carrier licence fee liabilities (567) (539)
Other long-term liabilities (46) (86)
(23,869) (20,870)
Net assets 3,893 2,899
CAPITAL AND RESERVES
Share capital 1,693 1,688
Deficit (535) (1,258)
Equity attributable to equity holders of the
Company 1,158 430
Minority interests 2,735 2,469
Total equity 3,893 2,899
21
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS
For the six months ended June 30, 2007
1. BASIS OF PREPARATION
The unaudited condensed consolidated financial statements of PCCW Limited (the
“Company”) and its subsidiaries (collectively the “Group”) have been prepared in
accordance with Hong Kong Accounting Standard (“HKAS”) 34 “Interim Financial
Reporting” issued by the Hong Kong Institute of Certified Public Accountants (“HKICPA”).
The unaudited condensed consolidated financial statements have been reviewed by the
Company’s Audit Committee and, in accordance with Hong Kong Standard on Review
Engagements 2410 “Review of Interim Financial Information Performed by the Independent
Auditor of the Entity” issued by the HKICPA, by the Company’s auditor.
The preparation of the unaudited condensed consolidated financial statements in conformity
with HKAS 34 requires management to make judgments, estimates and assumptions that
affect the application of policies and reported amounts of assets and liabilities, income and
expenses on a year to date basis. Actual results may differ from these estimates.
The accounting policies and methods of computation used in preparing these unaudited
condensed consolidated financial statements are consistent with those followed in preparing
the Group’s annual financial statements for the year ended December 31, 2006, except for
the adoption of the following new and revised Hong Kong Financial Reporting Standards,
HKASs and Interpretations (“Int”) (collectively “new HKFRSs”) which are effective for
accounting periods beginning on or after January 1, 2007:
- HK(IFRIC)-Int 8 Scope of HKFRS 2
- HK(IFRIC)-Int 9 Reassessment of Embedded Derivatives
- HK(IFRIC)-Int 10 Interim Financial Reporting and Impairment
The adoption of these new HKFRSs has no material effect on the Group’s results and
financial position for the current or prior periods.
22
2. MATERIAL TRANSACTIONS
a. On March 2, 2006, PCCW IMS China Development Company Limited (“PCCW IMS
China”), an indirect wholly-owned subsidiary of the Company, as purchaser, initially
entered into a sale and purchase agreement with China Network Communications
Group Corporation (“China Netcom”), a state-owned enterprise established under the
laws of the People’s Republic of China (the “PRC”), and 中國網絡通信（控股）有限
公司, a state-owned enterprise established u nder the laws of the PRC and a wholly-
owned subsidiary of China Netcom, together as vendors, and 網通寬帶網絡有限責任
公司 (“CNCBB”), a limited liability company established under the laws of the PRC
and a subsidiary of China Netcom, as the target company, whereby PCCW IMS China
agreed to acquire from the vendors an aggregate of 50% of the registered capital of
CNCBB after the completion of CNCBB’s group reorganization at a consideration of
RMB318 million, which was funded by internal resources of the Company and was
paid according to an agreed payment schedule. On December 21, 2006, PCCW IMS
China transferred all of its rights of and interests in the above sale and purchase
agreement to PCCW Teleservices (Hong Kong) Limited (“PCCW Teleservices”), an
indirect wholly-owned subsidiary of the Company. The transaction was completed,
and on January 11, 2007, PCCW Teleservices became a shareholder of CNCBB.
b. On January 24, 2007, PCCW Capital No. 3 Limited, an indirect wholly-owned
subsidiary of the Company, redeemed in full the US$456 million 7.88% guaranteed
notes due 2013.
c. On January 29, 2007, PCCW Capital No. 2 Limited, an indirect wholly-owned
subsidiary of the Company, redeemed in full the US$450 million 1% guaranteed
convertible bonds due 2007 upon its scheduled maturity in cash, which was equivalent
to 119.383% of the principal amount, plus accrued interest as at January 29, 2007, and
not by conversion into ordinary shares of the Company.
23
3. SEGMENT INFORMATION
An analysis of turnover and contribution to the Group’s results by business segment is set out
below:
For the six months ended June 30, 2007
(In HK$ million)
Telecommunications
Services
(“TSS”)
(Unaudited)
TV &
Content
(Unaudited)
Mobile
(Unaudited)
PCCW
Solutions
(Unaudited)
Pacific
Century
Premium
Developments
Limited
(“PCPD”)
(Unaudited)
Other
Businesses
(Unaudited)
Eliminations
(Unaudited)
Consolidated
(Unaudited)
TURNOVER 7,706 715 668 826 2,100 165 (573) 11,607
RESULTS
Segment results 2,392 (150) (361) 73 531 (422) – 2,063
Interest income 236
Finance costs (846)
Share of results of
jointly controlled
companies and
associates (1) – – – – – – (1)
Profit before taxation 1,452
Income tax (377)
Profit for the period 1,075
For the six months ended June 30, 2006
(In HK$ million)
TSS
(Unaudited)
TV &
Content
(Unaudited)
Mobile
(Unaudited)
PCCW
Solutions
(Unaudited)
PCPD
(Unaudited)
Other
Businesses
(Unaudited)
Eliminations
(Unaudited)
Consolidated
(Unaudited)
TURNOVER 7,405 505 585 737 5,276 162 (546) 14,124
RESULTS
Segment results 2,401 (211) (292) 62 701 (380) – 2,281
Interest income 312
Finance costs (928)
Share of results of
associates 18 – – – – – – 18
Profit before taxation 1,683
Income tax (609)
Profit for the period 1,074
24
3. SEGMENT INFORMATION (CONTINUED)
Certain comparative figures have been restated to conform with the business segment
presentation in the current period since the Group’s directories business, previously included in
Other Businesses, has been reclassified to TV & Content.
4. OTHER GAINS, NET
In HK$ million Six months ended
June 30, June 30,
2007 2006
(Unaudited) (Unaudited)
Net realized (losses)/gains on disposals of available-for-
sale financial assets and financial assets at fair value
through profit or loss (21) 15
Net unrealized gains/(losses) on financial assets at fair
value through profit or loss 3 (5)
Net realized and unrealized fair value gains/(losses) on
derivative financial instruments 69 (19)
Dividend income – 2
Write back of provision for loss on legal claims – 105
Unclaimed dividend payable by a subsidiary written back 2 –
Others –
55 98
5. PROFIT BEFORE TAXATION
Profit before taxation is stated after crediting and charging the following:
In HK$ million Six months ended
June 30, June 30,
2007 2006
(Unaudited) (Unaudited)
Crediting:
Revenue from properties sold 1,939 5,123
Gain on disposal of property, plant and equipment,
investment properties and interests in leasehold land 11 –
Charging:
Cost of sales, excluding properties sold 3,833 3,172
Cost of properties sold 1,366 4,383
Depreciation of property, plant and equipment 1,432 1,350
Amortization of intangible assets 165 104
Amortization of land lease premium 13 13
Loss on disposal of property, plant and equipment,
investment properties and interests in leasehold land – 2
Finance costs on borrowings 813 900
Staff costs 1,342 1,444
25
6. INCOME TAX
In HK$ million Six months ended
June 30, June 30,
2007 2006
(Unaudited) (Unaudited)
Current income tax:
Hong Kong profits tax 534 699
Overseas tax 21 (26)
Recovery of deferred taxation (178) (64)
377 609
Hong Kong profits tax has been provided at the rate of 17.5% (2006: 17.5%) on the estimated
assessable profits for the period. Overseas taxation has been calculated on the estimated
assessable profits for the period at the rates prevailing in the respective jurisdictions.
On March 16, 2007, the National People’s Congress of the PRC approved the Corporate
Income Tax Law (the “new CIT Law”). The new CIT Law reduces the corporate income tax
rate applicable to the Group’s operations in the PRC from 33% to 25% with effect from
January 1, 2008. Accordingly, the deferred tax liabilities for the Group’s operations in the
PRC as at June 30, 2007 is provided at the rate of 25% on the temporary differences between
the carrying amounts of assets and liabilities for financial reporting purposes and the tax
bases. The effect on the change in corporate income tax rate applicable to the Group’s
operations in the PRC was recognized in the income statement for the current period.
7. DIVIDENDS
a. Dividend attributable to the interim period
In HK$ million Six months ended
June 30, June 30,
2007 2006
(Unaudited) (Unaudited)
Interim dividend declared after the interim period of 6.5
HK cents (2006: 6.5 HK cents) per ordinary share 440 438
At a meeting held on August 29, 2007, the directors declared an interim dividend of 6.5 HK
cents per share for the year ending December 31, 2007. This interim dividend is not reflected
as a dividend payable in these unaudited condensed consolidated financial statements, but
will be reflected as an appropriation of retained earnings for the year ending December 31,
2007.
26
7. DIVIDENDS (CONTINUED)
b. Dividend attributable to the previous financial year, approved and paid during the
interim period
In HK$ million Six months ended
June 30, June 30,
2007 2006
(Unaudited) (Unaudited)
Final dividend in respect of the previous financial year
approved and paid during the following interim period,
of 12 HK cents (2006: 12 HK cents) per ordinary share 813 808
8. EARNINGS PER SHARE
The calculations of basic and diluted earnings per share are based on the following data:
Six months ended
June 30, June 30,
2007 2006
(Unaudited) (Unaudited)
Earnings (in HK$ million)
Earnings for the purposes of basic and diluted earnings
per share 822 796
Number of shares
Weighted average number of ordinary shares for the
purpose of basic earnings per share 6,758,086,867 6,730,527,364
Effect of deemed issue of shares under the Company’s
share option scheme for nil consideration 111,466,808 20,738,311
Effect of awards of vested shares under the Company’s
share award schemes 3,731,974 –
Weighted average number of ordinary shares for the
purpose of diluted earnings per share 6,873,285,649 6,751,265,675
The US$450 million 1% guaranteed convertible bonds due 2007 outstanding as at June 30,
2006 had an anti-dilutive effect on the basic earnings per share for the six months ended June
30, 2006.
27
9. ACCOUNTS RECEIVABLE, NET
An aging analysis of accounts receivable is set out below:
As at As at
June 30, December 31,
In HK$ million 2007 2006
(Unaudited) (Audited)
0 – 30 days 1,687 1,759
31 – 60 days 314 370
61 – 90 days 152 143
91 – 120 days 110 111
Over 120 days 462 463
2,725 2,846
Less: Impairment loss for doubtful debts (293) (266)
2,432 2,580
Accounts receivable in respect of properties sold is payable by the purchasers pursuant to the
terms of the sales contracts. Other accounts receivable has a normal credit period ranging up
to 30 days from the date of invoice unless there is a separate mutual agreement on extension
of the credit period. Credit evaluations are performed on all customers requiring credit over a
certain amount. Debtors who have overdue payable are requested to settle all outstanding
balances before any further credit is granted.
10. ACCOUNTS PAYABLE
An aging analysis of accounts payable is set out below:
As at As at
June 30, December 31,
In HK$ million 2007 2006
(Unaudited) (Audited)
0 – 30 days 624 598
31 – 60 days 41 90
61 – 90 days 30 16
91 – 120 days 125 54
Over 120 days 185 264
1,005 1,022
28
The Directors as at the date of this announcement are as follows:
Executive Directors:
Li Tzar Kai, Richard (Chairman); Alexander Anthony Arena (Group Managing Director);
Peter Anthony Allen; Chung Cho Yee, Mico; Lee Chi Hong, Robert
Non-Executive Directors:
Sir David Ford, KBE, LVO; Zhang Chunjiang; Zuo Xunsheng (Deputy Chairman); Li Fushen
Independent Non-Executive Directors:
Prof Chang Hsin-kang; Dr The Hon Sir Li Kwok Po, David, GBS, OBE, JP; Sir Roger Lobo, CBE, LLD, JP;
Aman Mehta; The Hon Raymond George Hardenbergh Seitz
Forward-Looking Statements
This announcement contains certain forward-looking statements. The words “believe”, “intend”,
“expect”, “anticipate”, “project”, “estimate”, “predict”, “is confident”, “has confidence” and similar
expressions are intended to identify forward-looking statements. These statements are not historical
facts or guarantees of future performance. Actual results could differ materially from those
expressed, implied or forecasted in such forward-looking statements. Such forward-looking
statements are based on the current beliefs, assumptions, expectations, estimates and projections of
the directors and management of PCCW about the business, the industry and the market in which
PCCW operates, and are subject to risks, uncertainties and other factors that could significantly
affect expected results.
Interim Results Announcement for the Six Months Ended June 30, 2007 |
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