HANA Hanarotelecom Incorporated ADS (MM)

- Full-year revenues increased significantly by 19.3% year-on-year SEOUL, South Korea, Feb. 14 /PRNewswire-FirstCall/ -- hanarotelecom incorporated (KOSDAQ: 033630) (NASDAQ:HANA) ("Hanaro" or the "Company"), Korea's leading integrated telecommunications company providing a broad range of broadband Internet and voice services, announced on February 14, 2007 that the Company posted revenues of KRW 1,723.3 billion, operating profit of KRW 30.8 billion and net loss of KRW 86.0 billion for the year 2006. (Refer to Table 1 - 2006 Financial Highlights) The Company explained that full-year revenues rose 19.3% year-on-year on the back of the revenue growth in broadband, voice, corporate business, etc. While operating profit fell 42.1% from 2005 due to an increase in operating and marketing expenses driven by fierce competition in the broadband market, net loss decreased 58.8% owing to the one-time expenses incurred from the integration with Thrunet, etc. in 2005. In terms of earnings for the fourth quarter of 2006, the Company stated that revenues rose slightly to KRW 431.3 billion whereas operating loss and net loss stood at KRW 3.3 billion and KRW 45.9 billion, respectively, due to an increase in subscriber acquisition costs, the expansion of call centers and a seasonal hike in maintenance expenses. The Company places priority on increasing the number of subscribers to hanaSet, a service bundle of broadband, voice and hanaTV that offers up to 20% discount on service fees. Its strategy is to promote the acquisition of new subscribers by offering deeper discounts compared to single products and to focus on up-selling targeting existing subscribers in order to increase customer-level ARPU and strengthen customer retention. In particular, the Company will dramatically increase revenues in 2007 through new growth engines such as hanaTV and corporate business. With the cumulative number of hanaTV subscribers reaching 300,000 as of the end of January 2007, Hanaro plans to achieve revenues of KRW 70 ~ 80 billion and 1 million subscribers by the end of 2007. On the corporate business side, the Company aims to achieve revenues of KRW 440 billion in 2007, up 18% compared to the previous year, by strengthening existing businesses such as corporate voice and IDC and advancing into NI/solution businesses. The cumulative number of optical LAN subscribers reached 900,000 as of the end of 2006, accounting for 40% of the 100Mbps market. Mainly through upgrading Hanaro's own HFC networks to 100Mbps networks, the Company is planning to expand the total 100Mbps coverage to 12.6 million households by the end of 2007 from the current optical LAN coverage of 4.3 million households. Mr. Byung-Moo Park, Representative Director & CEO, said, "By providing competitive customer services, we will lay the foundation for stable growth for existing businesses this year. In addition, we will focus on fostering new growth engines such as hanaTV and corporate business so that we will be able to achieve sustained profits." "To this end, we will maximize corporate efficiency through continuous innovation as well as selective and focused investment," he added. Meanwhile, Hanaro stated that the upward trend in subscriber net adds is strengthening with 20,000 subscribers in broadband and 28,000 subscribers in voice for January 2007, backed by the success of hanaSet, the bundled service the Company launched in January 2007 for the first time in Korea. Table 1 - 2006 Financial Highlights (Unit: KRW billion) 2006 2005 Change (y-y) Revenues 1,723.3 1,444.4 19.3 % Operating Profit 30.8 53.2 -42.1 % Net Income -86.0 -208.8 loss decreased EBITDA 535.5 506.0 5.8 % Table 2 - 4Q 2006 Financial Highlights (Unit: KRW billion) Change Change 4Q 2006 3Q 2006 (q-q) 4Q 2005 (y-y) Revenues 431.3 430.9 0.1 % 370.9 16.3 % Operating Profit -3.3 10.6 turned 26.3 turned negative negative Net Income -45.9 -17.8 loss -164.3 loss increased decreased EBITDA 124.1 135.8 -8.6 % 141.6 -12.4 % Contacts: hanarotelecom incorporated Investor Relations 822-6266-4524 / 4473 - or - Taylor Rafferty, New York Reema Parikh 1-212-889-4350 Taylor Rafferty, London Faisal Kanth 44-20-7614-2900 DATASOURCE: hanarotelecom incorporated CONTACT: Investor Relations: 1-822-6266-4524 or 1-822-6266-4473, ; or Reema Parikh of Taylor Rafferty, New York, +1-212-889-4350, or Faisal Kanth of Taylor Rafferty, London, +44-20-7614-2900, , both for hanarotelecom incorporated

Copyright