China Netcom interim profit falls

China Netcom Group Corporation (Hong Kong) Limited<906>, China's leading broadband and fixed-line telecommunications operator, announces its 2007 interim results(4) yesterday, saying that it's net profit for the first half dropped 5.4%.

For the first six months ended Jun.30, net profit fell from RMB 7.1 billion to RMB 6.71 billion, with CAPEX down 16.2% to RMB 8,454 million compared with the same period of last year. Its shares also dropped from last year's RMB 1.07 per share to RMB 1.01. The company declared no dividend.

Netcom's continuing operations generated RMB 40.653 million in revenue, representing a slight increase of 0.43% over last year. However, its recurring net profit was still 4% below Morgan Stanley's earlier forecast.

Despite Netcom's soaring broadband subscribers and momentum in high-growth businesses, analysts still think the interim results disappointing.

In February, Netcom has transferred its assets in Guandong and Shanghai branches back to its parent company in a bid to improve its business.