For Immediate Release
e-KONG Announces 2011 Interim Results
Recorded HK$54.2 million six-month profit
ZONE US Merger with ANPI completed
HIGHLIGHTS
· The ZONE/ANPI Transaction in the United States was completed on 15 April 2011
· Profit attributable to the shareholders of the Company for the first half of 2011 amounted to HK$54.2 million, primarily attributable to the gain arising from the ZONE/ANPI Transaction
· Net asset values improved to HK$265.1 million (including cash and cash equivalents of HK$125.2 million)
·
ZONE
Hong Kong was awarded ISO 9001:2008 accreditation
HONG KONG, 18 August 2011 -- e-KONG Group Limited (“the Company” or “e-KONG”), a company listed on the main board of the Hong Kong Stock Exchange (SEHK: 524), today announced its interim results of the Company and its subsidiaries (“the Group”) for the period ended 30 June 2011.
During the period under review, the Group successfully completed the ZONE/ANPI Transaction between its US operating subsidiary Zone Telecom, Inc. (“ZONE Telecom”) and Associated Network Partners, Inc. (“ANPI”) on 15 April 2011 whereby ZONE Telecom and ANPI’s respective holding companies became equal partners in a newly established company called ANZ Communications LLC (“ANZ”). Following completion of the ZONE/ANPI Transaction, ZONE Telecom operations ceased to be a subsidiary of the Group and its interests in ANZ, thereafter, are accounted for by the proportionate consolidation method. Accordingly, the results for the first half of 2011 represent 3½ months (between 1 January to 15 April 2011) of the disposed US subsidiary Zone Telecom, LLC and 2½ months (between 16 April to 30 June 2011) of the proportionately accounted results of ANZ. As a result of the ZONE/ANPI Transaction, the Group recognised a gain on disposal of the US subsidiary of HK$81.2 million.
The Group’s turnover from Continuing Operations increased by 320.0% to HK$158.1 million in the first half of 2011 when compared to HK$37.7 million for the prior period. This significant increase is mainly due to the inclusion of 2½ months of the proportionate accounted results for ANZ in the results for the first half of 2011. The profit attributable to equity holders of the Company for the period under review was HK$54.2 million compared to HK$2.1 million for the prior period. The Group’s net asset value improved by 25.0% from HK$212.0 million as at 31 December 2010 to HK$265.1 million as at 30 June of 2011.
The integration process of ANZ’s operations since the completion of the ZONE/ANPI Transaction has been progressing well with significant synergistic benefits having already been realised during the period under review. Key areas targeted to achieve better operating results included reduction in combined operating costs, improvements in margins through efficient utilisation of a combined network infrastructure and the elimination of outsourced billing expenses by bringing this function in-house. In addition to the operational synergy gains, ANZ is capitalising on some opportunities to increase revenue by cross-selling and bundling products and services of ZONE Telecom and ANPI to the combined customer base.
“The ANZ board members, comprising three members nominated by ANPI shareholders and three members nominated by the Group, are very pleased with the merger completion and are equally excited about the future prospects of ANZ. We are currently working together to formulate mid to long-term strategic plans which we believe when appropriately executed will substantially increase ANZ’s value and deliver significant returns to its shareholders.” said Mr. Richard Siemens, Chairman of e-KONG.
For the period under review, ZONE Asia recorded total turnover of HK$38.4 million, a 1.9% increase as compared to HK$37.7 million for the corresponding prior period. The revenue derived from ZONE Asia’s core IDD business during the period continued to decline but was offset mainly by the revenue contribution from the newly established telecom infrastructure division of ZONE Hong Kong operations. Following the appointment of ZONE Hong Kong as a main distributor of products and services from TE Connectivity (NYSE : TEL) to the carrier market segment in Hong Kong and Macau, ZONE has been providing high-end fibre connectivity products to major telecom operators in these regions that have been actively expanding their fibre backbone networks in support of their forthcoming 4G Long Term Evolution (LTE) and Fibre-to-the-home (FTTH) roll-outs. Revenue and margin contributions from this business segment are expected to grow further as these telecom operators increase their network capacity to meet end-user’s growing demand for high-speed broadband connectivity.
During the period under review, ZONE Hong Kong was awarded ISO 9001:2008 accreditation, demonstrating its commitment to provide best-in-class products and services to its customers. This accreditation also facilitates ZONE’s expansion into businesses that demand such high quality assurance standards as it continues to work with telecommunication service providers and equipment vendors, in both cases as their outsourced partner as well as collaborating amongst them to vie for multi-vendor projects in Hong Kong. ZONE Hong Kong is also reinforcing its presence in the telecom solution market on the Internet, resulting in additional revenue contributions from customers outside Hong Kong.
ZONE Singapore continues its efforts to become a full-service telecom provider. In the second half of 2011, in tandem with the progress of Singapore’s Next Generation National Broadband Network (NGNBN), ZONE’s broadband-related services footprint is expected to reach more than 60% of Singapore geographically. ZONE’s services using this network will include IDD voice, VoIP SIP Trunk, full-featured conference call solutions and broadband connectivity targeted at the corporate users as well as government projects and tenders.
Relevant Marketing Group (RMI), the re-branded entity that holds the Group’s insurance-related assets, made further progress to introduce innovative non-traditional mass distribution of insurance products to the Asian region. In the first half of 2011, RMI successfully delivered a relevant suite of insurance products to several notable Hong Kong brands. For example, several white-labeled insurance portals were launched, partnering with Quam Group, an integrated financial services group (www.q-insure.com), and AsiaXPAT.com, the largest expatriate community website in Asia (www.asiaxpress.asia). In addition, RMI continues to upgrade its insurance products delivery and fulfillment platform to ensure its scalability, robustness and flexibility to handle mass retail distribution of insurance products through both conventional as well as virtual retailers. Through this enhanced platform and in conjunction with established insurance companies, RMI is expected to launch in the second half of 2011 a number of new insurance products tailored to specific partners, each with large communities of end-users.
Looking ahead to the second half of 2011, ANZ in the United States will continue its efforts to realise and monetise the synergistic benefits arising from the operating efficiencies and improvements in operating margins derived from the ZONE/ANPI Transaction, while expanding its revenue base by introducing new products and services to the combined customer base. In the meantime, ANZ’s board will progress its planning process to crystallise its long-term strategic plans for execution. In Asia, the Group will continue to broaden its revenue base particularly through expanding its telecom infrastructure product distribution business in Hong Kong, growing the data-related segment of its ZONE business in Singapore, and delivering on the revenue contribution from some of RMI’s mass insurance distribution initiatives. The Group will also continue, and even accelerate its efforts, to pursue other M&A and business collaboration opportunities in the pipeline to further improve shareholders’ returns.
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Note: The full text of the Group’s 2011 Interim Results announcement can be accessed through the e-KONG’s corporate website at www.e-kong.com/investors/announcements.htm
About e-KONG Group Limited
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e-Kong Group Limited (“e-KONG”), is listed on the main board of the Hong Kong Stock Exchange (SEHK:524) which also maintains a sponsored Level 1 ADR programme through The Bank of New York Mellon (Ticker Symbol: EKONY) currently has a portfolio of business interests in the telecommunications and information technology sector and is actively seeking opportunities to expand and diversify into other business sectors.
The Company is committed to enhancing shareholders’ value through investing and building long-term sustainable businesses while maintaining the highest standard of corporate governance. While the Group continues to focus on growing its core business, it is also pursuing other business opportunities that are complementary to its existing businesses or have potential capabilities in offering significant return on investment. |
For further information on e-KONG, please visit: www.e-kong.com
Telecom Unit:
ANZ Communications LLC www.zonetelecom.com www.anpisolutions.com
ZONE Hong Kong www.zonetel.com
ZONE Singapore www.zone1511.com.sg
Others:
Relevant Marketing Group (RMI) www.rmigroupasia.com
Relevant Marketing (HK) Limited www.speedinsure.com
For more details, please contact:
Investor Relations Team
Tel: 852 2801 7188
Fax: 852 2801 7238
e-mail: investor@e-kong.net