Hong Kong-listed China Netcom Group Corp<906><CN>, the second largest fixed-line telecommunications operator in China, said its net profit in the first half of this year was RMB 5.9 billion, up 11.9% a year earlier, helped by change in corporate tax rate and gains on non-cash transactions.

Excluding the impact of non-cash transactions, net profit would be RMB 5.4 billion, an increase of 3.2% year-on-year, while earnings per share were RMB 0.12, up 97.6% from a year earlier, the Beijing-based company said in a statement to the Hong Kong Stock Exchange.

For the six months ended Jun. 30, 2008, Netcom generated revenue of RMB 40.62 billion (excluding upfront connection fees), representing a decrease of 0.15% over the same period of last year.

According to the statement, revenue from innovation businesses was RMB 16.48 billion, up 26.2% year-on-year. This growth was mainly attributable to the rapid expansion of broadband service.

As of Jun 30, 2008, the broadband service realized revenue of RMB 8.86 billion in the first half of this year, a year-on-year increase of 38.8%, which accounted for 21.8% of total revenues.

In June, China Unicom<600050><762><CHU> and China Netcom jointly announced that each share of Netcome would be exchanged for 1.51 Unicom shares in a proposed merger.

Source:China Knowledge