Hong Kong, August 8, 2002 - TOM.COM LIMITED ("TOM" or "the TOM Group", stock code: 8001) announced its second quarterly results for the three months ended June 30, 2002 today. During the quarter, the TOM Group recorded earnings before interest, taxation, depreciation and amortisation (EBITDA) of HK$12.5 million, signalling the success of the acquisition and integration strategy the Group has adopted over the past two years.
During the quarter, total revenue rose 57% to HK$415 million, out of which 48% was contributed by organic growth. Online revenue doubled to HK$72 million, led by a 58% growth in telecom value-added services (VAS) revenue. Offline revenue in the quarter rose 51% to HK$343 million, or 83% of total revenue, with first-time contributions from four outdoor media companies.
The EBITDA of HK$12.5 million recorded in the quarter was a HK$48 million improvement on the EBITDA loss of HK$35 million in the previous quarter. Net loss also decreased by 34% from HK$75 million to HK$50 million in the period.
Comparing overall financial performance to the same period last year, revenue for the six months ended 30 June 2002 amounted to HK$679 million, a threefold increase from HK$222 million in the corresponding period in 2001. Operating loss in the first half of 2002 was reduced by 39% from HK$119 million to HK$73 million year-on-year. Loss attributable to shareholders in the first half of 2002 was HK$125 million, down from HK$148 million in 2001. The improved financial performance was a result of an enlarged revenue base coupled with disciplined cost management.
Advertising revenue contributed to 47% of total revenue for the six months, with non-advertising revenue making up the rest. In a segment breakdown, online revenue amounted to 16% of total revenue for the first six months, while outdoor revenue made up 11%, publishing revenue 54%, and sports and entertainment revenue 19%. Geographically, Taiwan contributed 50% of total revenue in the first six months, followed by Mainland China's 44% and Hong Kong's 6%.
Segment Performance
Online
Strong performance of TOM's fee-based online services together with integration efforts in the past year contributed to the company's narrowband operations in Mainland China generating positive EBITDA within 24 months - making TOM the most cost-efficient online operator in the Mainland. Comparing with last year, online revenue for the six months ended June 30, 2002 doubled to HK$110 million while loss for this segment narrowed by 40% to HK$61 million.
At the end of June, TOM had 280,000 mobile/pay e-mail subscribers, a 65% growth quarter-on-quarter. Its SMS service attracted 2.1 million registered users sending on average 600,000 messages daily. TOM's ISP access card "TOMNET" recorded sales of 3.5 million cards to date, generating a total of HK$60 million in revenue.
Outdoor
Outdoor revenue grew 6% year-on-year. TOM made good progress in integrating its 12 outdoor subsidiaries. The development of a proprietary web-based outdoor media asset management system has been completed, with implementation scheduled for next quarter. Meanwhile, TOM Outdoor Media Group has entered into separate contracts with international advertising agencies to perform nationwide outdoor media buying. The agencies will in total commit at least RMB15 million annually. Network-wide sales are expected to optimise utilisation of inventory, with the objective of raising overall occupancy from the current 76% to over 80%.
Publishing
Publishing revenue for the six months ended 30 June 2002 increased by 17 times to HK$367 million over the corresponding period last year. Profit generated in this segment improved by HK$34 million, primarily due to the consolidation of TOM's publishing operations in Taiwan. Sharp Point and Business Weekly have successfully executed rationalisation and integration exercises during the first half of 2002, with each business unit trimming production, distribution and staff costs by up to 20%.
This quarter saw the launch of three magazines and 415 book titles. In Mainland China, TOM has reached content licensing agreements with publishers over 46 book titles and five magazine titles. Business Weekly is now directly imported into China and the import of publications into China through TOM's joint venture with China National Publications Import & Export Corp is accelerated.
Sports & Entertainment
Comparing to the corresponding period last year, sports and entertainment revenue for the six months ended 30 June 2002 increased by 65% to HK$127 million, a record high for the group. Profit from this segment increased by 40% to HK$12 million over the corresponding period last year. This was achieved on the strength of cross-media sports marketing initiatives related to the 2002 FIFA World Cup, which span print, TV and online media. The pre- and post-World Cup issues of China's Official Guide (total circulation of 1.6 million copies), to which TOM had exclusive rights, also recorded strong advertising sales.
For press enquiries:
Rachel Chan, The TOM Group
Tel: (852) 2121 7810
Fax: (852) 2127 7576
E-mail: rachelc@tomgroup.com
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