Press Releases

September 19, 2002

e-KONG Announces Interim Results

HONG KONG, September 19, 2002 - e-KONG Group Limited (HKSE: 524) ("e-KONG" or the "Company", together with its subsidiaries, the "Group"), today announced its interim results for the period ended 30 June 2002. Turnover for the period was HK$140.6 million, a 10.8% increase compared with the previous corresponding period. The ZONE telecommunications business in Hong Kong, Singapore and the United States accounted for 93% of the Group's total revenue.

Consolidated net loss attributable to shareholders for the period under review declined to HK$115.3 million from HK$537.1 million for the previous corresponding period. Non-recurring losses were HK$35.6 million compared with HK$409.2 million for the previous corresponding period. The operating loss was HK$79 million compared with HK$127.3 million for the previous corresponding period.

Revenue for this period from the ZONE business in the United States increased by 37.6% to HK$76.3 million from HK$55.5 million for the previous corresponding period. The operating loss for ZONE US was HK$56.9 million compared with HK$47.4 million for the previous corresponding period. Operating expenses for ZONE US peaked during this period. Additional cost was incurred in product development and operational set-up to meet the more demanding needs of the business segment of the US market. As most of these efforts are now completed, the operating cost is anticipated to decrease in the coming period.

Despite intense competition and difficult economic times, ZONE Hong Kong achieved positive earnings before interest, taxation, depreciation and amortisation (EBITDA) for this period. This was attained through gross margin improvements, increased operational efficiencies and a marginal revenue growth. Competitive pressures will continue to affect gross margins but as ZONE Hong Kong achieves economic scale, incremental revenue growth will not require corresponding increases in operating expenses. Looking ahead, ZONE Hong Kong will continue to concentrate on its sales and marketing, and ongoing operational cost control efforts. Minimal capital expenditure is expected for the next period.

ZONE Singapore achieved positive EBITDA on a month-on-month basis from the second quarter of this year. More than 50% of ZONE Singapore's revenue for this period was generated from its business customers as a result of increased sales and marketing initiatives targeting the business segment of the market. Improvements in call quality and a better understanding of ZONE's value-added features has helped increase penetration rate in the Singapore's corporate sector.

The general economic environment of the countries in which the Group operates is unlikely to improve for the second half of the year. Its adverse effects are reflected in the slower than expected revenue growth of the Group for this period. However, the Group's key operating subsidiaries have proven to have a competitive edge to grow its market share whilst continuing to improve their overall operating efficiencies.

We are very pleased to see that ZONE1511 in Hong Kong and Singapore, which accounted for 42% of the total ZONE revenue, are now contributing positively toward the Group's cashflow. We expect this kind of performance to continue while revenue is anticipated to increase and operating costs to remain stable for the upcoming period." said Derrick Bulawa, Chief Executive Officer of e-KONG. "ZONE US operating cost is projected to decrease while revenue is expected to grow, particularly from the enterprise and corporate markets." added Mr Bulawa.

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About e-KONG Group Limited

e-KONG Group Limited, listed on the main board of the Hong Kong Stock Exchange (HKSE:524), pioneered the concept of converging services through innovative technical solutions and unique service offerings. e-KONG develops and services turnkey operations for global industries including telecom, corporate travel and meetings, and insurance. e-KONG's flagship business ZONE is focussed on providing such unique service offerings for the Domestic Long Distance (DLD) and International Direct Dialling (IDD) markets in the US, Hong Kong and Singapore using its patented advance technology.

For further information on e-KONG Group, please visit: www.e-kong.com

Please note: The correct form for the Company name is as follows: e-KONG (Lower-case "e" followed by a hyphen and upper-case KONG.)

For more details contact:

ZONE web site addresses:
ZONE Hong Kong : www.zone1511.com
ZONE Singapore : www.zone1511.com.sg
ZONE US : www.ZoneLD.com / www.ZoneCMS.com