Turning a dotcom bomb company from near bankruptcy into a profitable organisation may not be a story that most in the business community are familiar with. But that is what the management of e-Kong Group has achieved since it bought the telecommunications company in 2000.
This year, the group declared its third successive profit, with a record turnover of HK$795.3 million, up 13.2 per cent year-on-year. Net profit rose from HK$40.6million to HK$44.2million, up 8.8 per cent, while earnings before interest, tax, depreciation and amortisation increased 14.8 per cent to HK$65.7million.
The driver behind this transformation is experience, according to e-Kong chairman Richard Siemens. The group's management team has been in the cellular and telecoms industry for more than 30 years, with Mr Siemens actively involved in the establishment of Hutchison Telecom, Sunday, Distacom, Spice, J-Phone, AsiaSat and Britain's Orange among others.
And it was this experience that led management to see value in e-Kong and its Zone subsidiary when the rest of the investment community was reeling from the 2000 dotcom crisis.
'We looked [at e-Kong] and thought this company doesn't look too bad. If we put some effort behind it maybe we can have a profitable business. We saw it as a great company because we knew how to fix it - we've got the right guys and the experience,' Mr Siemens said.
The bulk of attention was needed in the United States where the group provided long-distance domestic, local and international services to more than 300 incumbent local exchange carriers.
This turnaround saw Zone US report a 16.7 per cent increase in turnover this year, to HK$698.9million, largely driven by ongoing efforts to expand its internet protocol-based product to application-driven domestic customers. The group also set itself up as a mobile virtual network operator in the US after entering into a deal with Verizon to resell its mobile services to incumbent local exchange carriers and corporates.
