Pointer Telocation reports Q1 loss
Shares of Hong Kong-based City Telecom Ltd. (Nasdaq: CTEL) are rising following news that the telecommunications company returned to profitability in the first half of fiscal 2007.
Profits attributable to shareholders for the six months ended Feb. 28 were HK$18.2 million, compared with a net loss of HK$55.2 million in the first half of fiscal 2006, City Telecom reported before the opening bell. Basic earnings per share were HK$0.03, compared with a basic loss of HK$0.09 per share. Analyst estimates were not available.
“After two challenging years, I am very pleased to announce that we finally turned from loss to profit,” Chairman Ricky Wong said. “Trends on different aspects of our business, such as the number of subscribers, have all reported significant growth or improvements this year.”
City Telecom’s total subscription base as of Feb. 28 increased by 25,000, or 4%, to 641,000 from 616,000 as of Aug. 31, 2006. The company also announced that it increased value added services and raised broadband prices.
Looking ahead, City Telecom said that it expects its premium pricing strategy will enhance return on investment. Without giving a specific date, the company now projects it will be able to reach 2 million residential homes in Hong Kong, up from 1.3 million currently. In the commercial market, City Telecom said it aims to reach 1,800 buildings from 750 at the moment.
Accordingly, the company said it plans to spend HK$150 million in the fiscal year 2007 and an additional HK$175 million in fiscal year 2008 to expand its network coverage and increase the number of its subscribers.
At 1:40 p.m. ET shares were up $0.54, or 14%, to $4.50. The 52-week high is $7.10, established on Jan. 11. The 52-week low of $1.27 was set on Oct. 26, 2006.
