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SUNDAY Communications Limited

SUNDAY Communications Limited. 2003 Interim Results Announcement 10 September. Good News. Interim Results. 10 September, 2003. Business Overview. Presenter Bruce Hicks Group Managing Director. SUNDAY Overview. Net profit of HK$13 million Successful launch of segmentation initiatives

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SUNDAY Communications Limited

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  1. SUNDAY Communications Limited 2003 Interim Results Announcement 10 September

  2. Good News Interim Results 10 September, 2003

  3. Business Overview Presenter Bruce Hicks Group Managing Director

  4. SUNDAY Overview • Net profit of HK$13 million • Successful launch of segmentation initiatives • Further debt reduction

  5. SUNDAY Profitability • HK$13 million net profit • EBITDA up 57% to HK$160 million • Difficult environment

  6. Profitability - Revenues • Revenues stable, with mobile services revenue down 2% to HK$582 million • Subscriber numbers rose to 650,000

  7. Profitability – Efficiency • Benefit of changes in 2002, including China operation • Raised efficiency • Operating costs (ex depreciation) down 19% or HK$74 million

  8. Profitability - Quality • Customers demand quality • Raised quality standards in: • Coverage • Pre-sales service • Customer care • SUNDAY competes on quality

  9. The New Marketplace • Market maturity / saturation • Little growth in numbers • Value comes from creativity and segmentation

  10. SUNDAY and Creativity • Integrated approach • Leader in location-based data services: • Family Watch • SARS updates • Responding creatively to price pressure: • Unlimited GPRS • Rollover airtime • All-Star Pack

  11. SUNDAY and Segmentation • Requires organisational change • Segmenting by : • Demographics • Geography • Usage • Two services launched in Q2: • U Decide youth plan • Pinoy service • 3G will accelerate this trend

  12. Prospects – 2H • Improving macro environment • Drive profitability through: • Efficiency and quality • Creative data services • Market segmentation • Examine China opportunities

  13. Prospects – 3G • Critical to survival in changing mobile world • SUNDAY has: • Strategy • License • Now planning systems for: • Network • IT • Service delivery • In positive discussions on: • Technology • Financing

  14. Conclusion SUNDAY is: • Profitable • Competitive • Poised for growth

  15. Financial Overview Presenter Janet Fung Group Director, Finance

  16. Consolidated Profit & Loss StatementHalf Year Ended 30 June 2003

  17. Net Profit • Turned from net loss to net profit of $13 million • Improved by $79 million YoY, and $64 million HoH • Achieving net profit on a month-to-month basis despite the outbreak of SARS and price war ( HK$ million )

  18. EBITDA After Restructuring Costs • Improved by $58 million (57%) YoY & $48 million (43%) HoH ( HK$ million )

  19. -7% Mobile Services 5% Mobile Services Turnover • slight drop in mobile services revenue due to the outbreak of SARS and price war • Increase in handset sales for new MMS phones

  20. -6% Mobile Services 6% Mobile Services Gross Profit • Slight drop in mobile services gross profit • Stable mobile services gross margin at 82%

  21. Excluding prepaid-inactivated, 5,855k, penetration rate reached 87% in June 2003 4% 6% 7% 25% 1% -1% Total growth rate Prepaid-activated growth rate Postpaid growth rate Hong Kong Mobile Market 6,480 6,219 5,827

  22. 8% 6% 25% 26% 0% -1% Subscriber Numbers • Total subscribers including MVNO - 662,000 650,000 603,000 570,000 Total growth rate Prepaid growth rate Postpaid growth rate

  23. Gross Churn – PostpaidAs a % of Opening Subscriber Numbers

  24. Postpaid ARPU - Net Of Discounts & Incentives • Data was around 5% of ARPU in 1H 2003

  25. Consistently Improving Operating Efficiency * Excludes one-off restructuring cost

  26. -21% -6 -6 -4% -5 -16% -12 -18% -38% -45 YoY increase / (reduction) Operating Expenses • Reduction of $74 million (19%) YoY, $60 million (16%) HoH 29 (7%) 23 (7%) 31 (8%) 26 (8%) 148 (38%) 142 (45%) 54 (17%) 66 (17%) 118 (30%) 73 (23%)

  27. Headcount - Hong Kong and Shenzhen 976 801 791 720 683

  28. Consolidated Balance Sheet

  29. Cash and Credit Facilities

  30. Consolidated Cash Flow Half Year Ended 30 June 2003

  31. Fixed Assets Additions

  32. SUNDAY Communications Limited 2003 Interim Results Announcement 10 September

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