For immediate release
Hong Kong, March 15, 2002 -- TOM.COM LIMITED ("TOM") today announced its annual results for the 12 months ended December 31, 2001. During the year, total revenue rose sevenfold to HK$627 million, from HK$89 million in the previous year, exceeding market expectations. This reinforced TOM's dominant position as Greater China's media and telecommunications company.
Online revenue for the 12 months grew 1.6 times to HK$144 million, amounting to about 23% of total revenue. The increase was due to full-year contributions from 163.net and Shawei.com and the successful launch of Internet-access card, TOMNET.
Functional integration of the online operations has completed, reducing website development and advertising and promotion expenses by almost 50%. The online segment is believed to have the most competitive cost structure among leading portals in Greater China.
Offline revenue increased by 13 times to HK$483 million during the year. Offline revenue was strengthened with first-time revenue contributions from the print and outdoor operations, namely Fench Media, Yazhou Zhoukan, Maya Cultural, PC Home and
Throughout the year, the company executed parallel acquisition, consolidation, rationalisation and integration strategies to secure significant positions in key media sectors. Despite the company's significant growth in offline businesses, operating expenses (excluding cost of sales) for the year dipped by 2% to HK$487 million. This signified that a leaner cost structure was in place to support a larger revenue base compared to the previous year.
As a result of the significantly broadened revenue base and reduced online expenses in 2001, operating loss for the year narrowed to HK$231 million, or a 40% improvement from HK$383 million in the previous year.
Loss attributable to shareholders for the year was halved to HK$636 million, from the restated HK$1,265 million in the previous year. A once-for-all provision of HK$331 and HK$829 million was made to write off goodwill and fixed assets of online investments, in 2001 and 2000 respectively. If the provisions were stripped out, the loss attributable to shareholders would be reduced to HK$305 million, a 30% improvement.
In line with TOM's geographical focus, revenue generated in Mainland China represented 66% of total revenue, while operations in Taiwan and Hong Kong contributed 19% and 15%, respectively.
A HK$850 million shareholders' loan was secured in December 2001, which, in addition to cash reserves, increased liquidity available at year-end to over HK$900 million.
TOM is one of the top five portals in Mainland China, with daily pageviews of 80 million and registered users reaching 15 million. In 2001, major initiatives were made in diversifying sources of revenues to include online advertising, online subscriptions and paid services. At the end of December, the number of online advertisers increased by almost 70% over the previous year to over 300. The mobile pay e-mail service, with which users can access their e-mails via mobile phones, attracted 60,000 users in the four months in 2001. In the fourth quarter, TOM processed on average 200,000 short messages (SMS) daily from 350,000 registered users. In the area of telecom value-added services, over 900,000 TOMNET access cards were sold in the six months since the service was launched in mid-2001, positioning TOM as an Internet-access portal.
Through the acquisition of four of Taiwan's largest publishing groups, TOM now controls 40% of the consumer magazine market and one third of the book market in Taiwan. With the print media management in place and a joint venture with a China National Publications Import and Export Corporation unit secured, TOM is at an advantageous position to enter the Mainland Chinese print media market.
By the end of 2001, TOM announced five outdoor media acquisitions, each acquired company is a leader in its respective city, adding cash-generative assets to TOM's nationwide outdoor network. The network currently includes eight companies after the New Star acquisition in February 2002, with quality outdoor media assets in China's key economic cities.
In sports marketing, a joint venture with China Sports Industry has further reinforced TOM's position as China's No.1 sports marketing company. TOM is prepared to capture opportunities in the run-up to the 2008 Beijing Olympics.
Chief Executive Officer and Executive Director Sing Wang said, "In 2002, TOM will continue to target selective acquisition activities, particularly in the print and outdoor media sectors. The momentum of revenue growth will be sustained in 2002, helping TOM to achieve cash flow break-even."
For press enquiries:
Rachel Chan, TOM.COM LIMITED
Tel: (852) 2121 7810
Fax: (852) 2127 7576
Email: rachelc@hk.tom.com
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