Hanaro Records Net Income for Two Consecutive Quarters, Well Poised to Post a Turnaround for the Year 2007Tuesday, November 6th, 2007
- Hanaro posted the record-high quarterly revenues of KRW 466.7 billion for the third consecutive quarter
- Net income jumped 252% QoQ to KRW 7.4 billion, eliminating the accumulated deficit
- hanaTV revenues doubled QoQ to KRW 15.3 billion
SEOUL, South Korea — hanarotelecom incorporated (KOSDAQ: 033630) (‘Hanaro’ or the ‘Company’), Korea’s leading integrated telecommunications company, announced on November 6, 2007 that the Company reached the breakeven point in the third quarter and poised itself to achieve a turnaround for the year 2007 as it posted record-high quarterly revenues of KRW 466.7 billion and net income of KRW 7.4 billion which eliminated most of its accumulated deficit.
Revenues rose 1.1% on the back of revenue growth in hanaTV as well as robust growth across existing business segments while marketing expenses fell 2.7% owing to less competition and the bundling effect, which led to a 27.1% increase in operating income. EBITDA increased 3.1% to reach KRW 147.9 billion.
The Company also stated that its earnings improved sharply compared with the same period of last year, posting an 8.3% increase in revenues, a 133.0% increase in operating income and an 8.9% increase in EBITDA. Net income turned positive from a net loss of KRW 17.8 billion in 3Q06.
Hanaro explained that subscriber net addition continued into the third quarter with broadband net adds of 11,000 and voice net adds of 79,000, driven by marketing strategies focused on bundled products. The service coverage of 100Mbps broadband expanded to about 12.5 million households as of the end of 3Q07 up from 4.3 million as of the end of 2006, with the number of 100Mbps broadband subscribers reaching 1.5 million as of the end of 3Q07.
The Company stressed that hanaTV revenues doubled QoQ to KRW 15.3 billion, and that it rolled out new value-added services including karaoke and launched customized advertising services after securing a sizable subscriber base of 500,000 in 3Q07. With these new services, hanaTV business is expected to grow not only in size, but also in profitability.
Hanaro added that it will increase the number of hanaTV subscribers to over 800,000 by the end of this year up from about 660,000 as of the end of October 2007 and expand its Closed User Group (CUG) service to corporate customers such as the Korean Federation of Community Credit Cooperatives and Hana Financial Group. The Company also plans to strengthen its position as a leading player in the IPTV market by concluding content agreements with all the major Hollywood movie studios within this year.
Chief Financial Officer Janice Lee said, “We accomplished a turnaround one quarter earlier than planned, laying the groundwork for solid profit generation going forward. Next year, we aim to achieve net income large enough to pay dividends, maximizing shareholder value.”