RealTime IT News

PacNet Returns To The Black

Pacific Internet Ltd., the Internet arm of government-linked SembCorp Industries Ltd., Thursday announced a surprise turnaround in its corporate performance for the third quarter.

The company further expects the turnaround to contribute to a net profit for its full financial year. The Singapore company announced net income of S$275,000 for the quarter to end September compared with a net loss of S$960,000 registered in the preceding quarter.

The company showed the improved performance on the back of a 35 percent jump in revenues to S$26 million compared with the same period a year earlier.

In a conference call, key company executives said PacNet was able to improve its ground despite "heavy competitive pressures in Asia".

Commenting on the latest performance, chairman Chan Wing Leong said in the conference call that "PacNet has managed to keep its head above water".

In the quarter, PacNet grew its subscriber base by 43 percent to 267,875 compared with the same period a year ago. Its base of leased line customers, comprising corporate users, expanded by 41 percent to 1,257.

Looking ahead, the company said it is undertaking several new initiatives to push ahead in its business. On the cards are plans to announce its e-commerce strategy next week and this will involve an investment of between S$30-50 million to turn this segment into a key business. Now, the company generates less than 1% of its revenue from this area.

PacNet also plans to expand into the Australasian region, expanding its current operations in Australia, Hong Kong and the Philippines further. It will set up an operation in India next month with offices in Mumbai and new Delhi.

There are also plans for the launch of callback services in December in Singapore with plans to extend it its overseas operations shortly after.

The company has said that its parent Sembcorp is still in talks with several parties to divest its 42 percent stake in PacNet. Sembcorp expects to reach the agreement by early 2000, said Chan, who also sits on the Sembcorp board.

Various sources report that Singapore Telecom (SingTel) and Cable & Wireless HKT are among the different parties interested in taking a stake in PacNet.