China Unicom Profits Down 24 Percent On Bond Issue

China Unicom has reported that its 2006 profits fell by 26 percent due to “an unrealized loss on a $1 billion convertible bond sold to South Korea’s SK Telecom Ltd. due to exchange rate changes”, reports Forbes. The loss relates to the price of the bonds compared to the price of Unicom’s shares, but the bonds weren’t exercised so the loss doesn’t affect cashflow. China Unicom’s net profit was 3.7 billion yuan (US$480 million), down from 4.9 billion yuan in January, however revenue rose 8 percent to 94.3 billion yuan ($12.2 billion) as its subscriber base expanded by 11 percent to 142.4 million. Without the loss from the bond issue China Unicom’s earnings grew 25.2 percent to 6.1 billion yuan ($792 million).

Comments have been disabled for this post