Cable & Wireless profit hit by slump in Asia
Results One per cent increase in profits shows telecoms giant still tied to economic crisis in the Far East.
Cable & Wireless Group managed a slight increase in profit in the sixied to economic crisis in the Far East. months to 30 September despite the effects of the Asian economic crisis.
The UK telecoms conglomerate saw a one per cent rise in pre-tax profit in the interim, at #1.12 billion from #1.11 billion on the same period last year. Turnover, including its share of joint ventures, rose 11 per cent during the period to #4.3 billion.
The operator, which generated around 37 per cent of revenue from its business in Hong Kong, conceded that performance continues to be adversely affected by the Asian crisis.
Despite Cable & Wireless re-balancing away from dependence on revenues from Hong Kong, the region is still responsible for more revenue than the UK.
Richard Brown, chief executive of Cable & Wireless said: 'Earnings are being impacted by the difficult trading conditions in Hong Kong. Overall prospects for the group remain encouraging.'
The group also launched Cable & Wireless Internet Xperience, the revamped face of the ISP business it purchased from MCI.
CABLE & WIRELESS COMMUNICATIONS BOUNCES BACK
The UK regional subsidiary Cable & Wireless Communications (CWC) also achieved a profit during the first six months, helped by gains in international business.
The UK telephony, cable TV and internet access provider reported a net profit of #65 million for the six months ended 30 September, compared with a net loss of #135 million for the same period in 1997. Revenues for the period hit #1.25 billion, a climb of 14 per cent.
During the period, CWC announced Network 2000, a scheme to upgrade its entire UK network with high capacity SDH and ATM technology.
The company also announced a multimillion IT services outsourcing contract with IBM.
Graham Wallace, the operator's chief executive said: 'We are uniquely placed to profit from the growth in internet, data and advanced services.'