China Netcom has announced its annual results for the year ending December 31, 2004. Consolidated revenue reached CNY64,922 million and net profit reached CNY 9,248 million, representing an increase of CNY5,024 million and CNY20,359 million, respectively, over the previous year.

The company's unaudited US pro forma EBITDA (excluding upfront connection fees) reached CNY30,379 million, an increase of CNY 3,932 million over 2003. After excluding the effects of reorganization costs and a revaluation of deficits, unaudited consolidated pro forma net profit increased by CNY1,687 million or 34.2% over 2003.

According to the unaudited US pro forma financials, operating expenses accounted for 79.7% of total revenue, representing a decrease of 2.4% over the previous year. Of this, the ratio of network operation and support expenses and staff costs to revenue dropped by 3.6% and 0.7% against the previous year.

The company's Board of Directors has proposed a dividend of HK$0.037 per share (equivalent to US$0.095 per ADS), representing a payout ratio of 37.5% for the year.


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