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Pacific Internet Reports 34% Increase in Net Revenues for 1Q 2000.

Business Editors


Strong growth due to rapid expansion in new markets

PACfusion positioned to capitalize on

Pacific Internet's commanding Asian presence

Pacific Internet Ltd. (NASDAQ: PCNTF), Asia's leading ISP and e-business portal today announced its financial results for the first quarter ended March 31, 2000.

The Group reported total revenues of US$15.2 million, a 34% increase over the same period last year. Pacific Internet also reported EBITDA of US$2.5 million for the first quarter 2000, a 26% increase over the same period last year. The strong growth is primarily attributable to Pacific Internet's rapid subscriber growth in Australia and the Philippines. The Company's subscriber base, excluding Singapore, grew by 156% over the same period last year.

Table 1: Summary of operating results
 Group 1Q00 1Q99
(in millions) US$ US$
 Net Revenues 15.2 11.7
 EBITDA 2.5 2.1
Pro-forma Net Income 1.9 1.8

Pacific Internet's pro-forma net income(1) for the first quarter 2000 was US$ 1.9 million; increased costs arising from the launch of, one of Asia's leading e-commerce portals, and the consolidation of new acquisitions limited pro-forma net income growth to an increase of 7.4% over the same period last year. Basic earnings per share for the first quarter 2000 was US$0.15 cents.

Table 2: Breakdown of subscribers by country and quarter
 1Q 2000 1Q 1999
 Dial-Up Leased Dial-Up Leased
Singapore 197,386 562 172,243 355
Hong Kong 40,656 481 32,350 270
Philippines 36,740 58 12,421 15
Australia 34,922 421 NA NA
India 2,453 0 NA NA
TOTAL 312,157 1,522 217,014 645

Mr. Ko Kheng Hwa, Pacific Internet's Chairman, said, "Our strong growth is the result of our execution of a clear and fundamentally sound business strategy, which involves strategic expansion into selected Asian markets". Mr. Ko pointed out, "While Pacific Internet was profitable for the first quarter, substantial new investments associated with our expansion strategy, particularly in India and for PACfusion, will impact our near-term bottom line. However, the Company's long-term strategies remain fundamentally sound due to the unchanged long-term growth opportunities in Asia".

Solidifying position as a pan-Asian ISP

Pacific Internet currently operates as an ISP in six countries in Asia, including India, Hong Kong, and Singapore, with plans to expand to more Asian countries within the year, including China. In February 2000, Pacific Internet announced an MOU in February 2000 with the Thakral Group, a leading distributor of consumer electronics in China, to create a joint venture which will offer management, technical, consultancy and branding services to licensed ISPs in China. According to recent estimates(2), ISP revenues in China could potentially exceed US$12 billion by the year 2010.

In India, Pacific Internet is now present in Mumbai, New Delhi, Bangalore and Chennai, with plans to expand to 25 major cities by the end of year 2001. According to a 1999 report by International Data Corporation(3), Internet subscribers in the Indian subcontinent are expected to grow from its current 1.4 million users to 5 million by the year 2003.

Mr. Nicholas Lee, Group CEO, said, "Our acquisitions during the first quarter reflect Pacific Internet's overall growth strategy in the Asia Pacific region, which leverages its rapidly growing subscriber base to further the development of its B2B and B2C portfolio through, the Group's newly launched e-business portal."

Table 3: Major acquisitions and proposed joint ventures in the first
 Quarter 2000
Acquisitions / Joint Date Business activity
Acquisition of Safe 28 April To build a regional business-to-business
and Mansfield Travel 2000 (B2B) travel vortal (vertical portal)
Group, a leading that will incorporate a complete online
regional corporate reservation system for airline tickets,
travel group. hotels, car rentals and other travel

Acquisition of 31 March The acquisition increases Pacific
Hunterlink, an 2000 Internet Australia's points of presence
Australian ISP based to Newcastle, Sydney, Melbourne, Perth,
in Newcastle. Brisbane, Wollongong, and Adelaide.

MOU to form Joint 6 Mar To provide narrowband and broadband
Venture with Thakral 2000 Internet access via cable to the Indian
Corporation, a leading subcontinent market.
distributor of consumer
electronics in China,
and, the
largest cable TV
operator in India.

MOU to form Joint 3 Feb To offer management, technical,
Venture with Thakral 2000 consultancy and branding services to
Corporation, a leading licensed ISPs in the China market. Under
distributor of consumer the terms of the MOU, the Chinese ISPs
electronics in China. will be given franchise licenses to use
 the Pacific Internet brand name and
 marketing methodology in China. The
 parties are presently negotiating with
 three Chinese ISPs operating in Shanghai,
 Beijing and Guangzhou respectively.

Acquisition of World 10 Jan To provide Internet access and related
Net & Services, a 2000 services to subscribers in Thailand.
up-and-coming ISP in Based on research conducted by The
Thailand Thailand Internet Service Providers Club
 (TISPC), the Thai Internet market is
 expected to grow by 35% every year for
 the next five years.


PACfusion continues expansion drive with acquisition of major

travel agency

On e-commerce, Mr. Lee said, "PACfusion is poised to take advantage of the huge pan-Asian consumer and corporate platform created by our rapid ISP expansion. With our acquisition of the Safe and Mansfield Travel Group, a leading corporate travel group with an annual turnover of US$69 million, we've begun to create a constellation of unique B2B e-business vortals (vertical portals) that brings traditional brick-and-mortar businesses to the Internet, with PACfusion serving as the intra-Asian gateway. This acquisition is a strategic milestone for PACfusion."

Through the first quarter of 2000, PACfusion continued to improve its content through alliances with major providers of Internet-based services, such as (web-based e-mail for user global access), T2Mail (a provider of unified internet based messaging services), Standard Chartered Bank (on-line banking products and services), (a provider of music netcasting services), GohDirect (for online financial service), Winesong (an on-line wine provider) and (online reservations services).

Commenting on the popularity of the PACfusion website, Mr. Lee said, "Our pageviews for and its associated web properties continue to grow, and a recent survey by ACNielsen confirmed's position as Singapore's most popular website. No other Singapore-based websites came close."

New telecommunication services to contribute to bottom line in

near term

With the liberalization of Singapore's telecommunication industry on April 1 2000, Pacific Internet successfully obtained a Facilities Based Operator (FBO) license. The company intends to deliver selected telecommunications services to both the corporate and consumer markets in Singapore within the next 12 months. These services, which include International Direct Dial, Leased Circuit Services and Internet Exchange Services, are expected to start contributing to Pacific Internet's bottom line in the near term.

Explained Mr. Lee, "The FBO license offers us enormous benefits, such as the ability to purchase bandwidth and connectivity directly from international consortiums that will lower our operating costs significantly, and deliver services like International Direct Dialing (IDD) quickly with little infrastructural costs. This would allow us to enter the Singapore Telecommunications market which is estimated at US$1.1 billion pa."

Referring to the Group's future plans, Mr. Ko said, "In the medium term, we intend to provide broadband access services to clients, using cable and wireless broadband technologies such as Local Multipoint Distribution Services (LMDS), which we will soon trial in several locations in Singapore's central business district. Over the longer term, Pacific Internet will also move aggressively into Wireless Application Protocol (WAP) applications that combines both voice and data services." Mr. Lee added, "With these plans, we are well on our way to completing our transition from a pure-play ISP to a total Internet access, e-commerce and related telecommunications services provider."

(1) Note on Financial Presentation Financial results are prepared in accordance with U.S generally accepted accounting principles ("US GAAP"). Pro forma financial results exclude amortization of goodwill and stock based compensation costs, and are not prepared in accordance with US GAAP.

(2) Source: Morgan Stanley Dean Witter, "The Internet Data Services Report"; Merrill Lynch, "Asia Internet Report"; Jardine Fleming, "Dataware Breaks over Asia"

(3) Source: International Data Corporation, "The Internet Environment in India, 1999"

About Pacific Internet Ltd

Pacific Internet, Asia's leading Internet Service Provider, is listed on the NASDAQ stock exchange under the ticker symbol PCNTF. Pacific Internet offers award-winning services in six countries (Singapore, Hong Kong, the Philippines, Australia, Thailand and India) including Internet access, portal sites and the ultimate web lifestyle with the "4Cs" (connection, commerce, content and community) under Pacific Internet won the "Best ISP in Asia-Pacific" award in 1999 and also the "Best ISP in Singapore" award for three consecutive years (1997, 1998, 1999).

Included in this press release are various forward-looking statements which can be identified by the use of words such as "may," "will," "should," "seeks," "expects," "anticipates," "estimates," "believes," and similar expressions. Pacific Internet has made forward-looking statements with respect to the following, among others, regional acquisition and expansion strategy; projected capital expenditures; development of services; development of additional revenue sources; development and maintenance of profitable pricing programs; and market acceptance of the Internet and technological advancement. These statements are forward-looking and reflect Pacific Internet's current expectations. They are subject to a number of risks and uncertainties, including but not limited to, changes in the economic and political environment in the countries where Pacific Internet operates, or may in the future operate, changes in technology and the Internet marketplace. In light of the many risks and uncertainties surrounding Pacific Internet and the Internet marketplace, its actual results could differ materially from those discussed in this press release.

 Pacific Internet Limited
 Unaudited Pro Forma Consolidated Statement of Operations

 Quarter ended March 31,
 1999 2000 2000
 S$'000 S$'000 US$'000
 ------------ ------------ -----------
Net revenues
 Dial-up access 14,834 14,345 8,379
 Leased line access 3,605 5,845 3,414
 Value added services 984 1,945 1,136
 Others 1,117 846 494
 ------------ ------------ -----------
 Total gross revenues 20,540 22,981 13,423
 Toll rebates (1,189) 2,990 1,746
 ------------ ------------ -----------
 Total net revenues 19,351 25,971 15,169

Operating costs and expenses
 Cost of sales 7,878 9,553 5,580
 Staff costs 5,204 8,334 4,868
 Sales & marketing 1,795 2,283 1,334
 Other general
 & administrative 2,454 2,769 1,617
 Depreciation & amortization 1,380 3,709 2,166
 Allowance for doubtful
 accounts receivable 559 143 84
 ------------ ------------ -----------
 Total operating expenses 19,270 26,791 15,649

Operating income /(loss) 81 (820) (480)

Other income/(expense)
 Interest income/(expense)
 - net 286 771 450
 Net gain /(loss) on
 foreign currency 1,791 1,326 775
 Gain /(loss) on disposal
 of fixed assets 1 13 8
 Equity in profit /(loss)
 of unconsolidated affiliates 252 (492) (287)
 Others 135 29 17
 ------------ ------------ -----------
 Total other
 income/(expenses) 2,465 1,647 963

Income before income taxes
 and minority interest 2,546 827 483
Provision for income taxes (300) (560) (327)
 ------------ ------------ -----------
 2,246 267 156

Minority interest in loss
 of consolidated subsidiaries 537 - -
 ------------ ------------ -----------

Net income 2,783 267 156
 ============ ============ ===========

Adjusted EBITDA (1) 3,388 4,257 2,487
 ============ ============ ===========

 Net income per share
 - basic $ 0.24 $ 0.02 $ 0.01
 ============ ============ ===========

 Net income per share
 - diluted (2) $ 0.23 $ 0.02 $ 0.01
 ============ ============ ===========

Stock based compensation and
 acquisition-related expenses
 (a) Deferred compensation
 expense - 1,093 638
 (b) Amortization of
 intangible assets 180 1,821 1,064
 ------------ ------------ -----------

Net income before stock based
 compensation and
 acquisition-related expenses 2,963 3,181 1,858
 ============ ============ ===========

 Net income per share before
 stock based compensation
 and acquisition related
 expenses (basic) $ 0.26 $ 0.25 $0.15
 ============ ============ ===========

 Net income per share before
 stock based compensation
 and acquisition related
 expenses (diluted) (2) $ 0.25 $ 0.23 $0.13
 ============ ============ ===========

Weighted average number
 of shares outstanding
 - basic 11,531,487 12,711,167 12,711,167
 ============ ============ ===========

Weighted average number
 of shares outstanding
 - diluted (2) 12,024,722 13,860,962 13,860,962
 ============ ============ ===========

(1) Represents earnings/(loss) before depreciation and amortization,

interest income and expense, income tax expense (benefit), equity

in profit/(loss) of unconsolidated affiliates, impairment in value

of investments, extraordinary items and minority interests.

Adjusted EBITDA is presented because the Company believes it is an acceptable financial indicator of the Company's ability to meet future debt service, capital expenditure and working capital requirements. Adjusted EBITDA is not determined in accordance with generally accepted accounting principles. It should not be considered in isolation or as an alternative to net income as an indicator of operating performance or as an alternative to cash flow as a measure of liquidity. In addition, the Company's adjusted EBITDA is not comparable to those of other companies, which may determine adjusted EBITDA differently.

(2) Includes the dilutive effect of all outstanding options under the

Company's Share Options Plans.

(3) Pro forma net income excludes the effects of stock based

compensation and acquisitions related expenses. Pro forma net

income is not determined in accordance with generally accepted

accounting principles. It may not be comparable to those of other

companies, which may determine pro forma net income differently.

(4) For your convenience, Singapore dollar amounts have been

translated into U.S dollar amounts at the exchange rate as of

March 31, 2000, which was S$1.712 to US$1.00.

If you require more information on Pacific Internet, please visit our website at, or call:
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Publication:Business Wire
Geographic Code:9SING
Date:May 16, 2000
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