In its filing to the Stock Exchange of Thailand yesterday, Shin Corp reported a net profit of Bt3.41 billion, down from Bt8.62 billion in 2005, due mainly to the weak performance of its subsidiaries.

Net results from investments in 2006 declined to Bt4.538 billion, from Bt8.723 billion in 2005.

An analyst said that besides business competition, Shin's problem stemmed from its ongoing conflict with the government, which will cloud its share performance.

The government is investigating the telecom concessions of Shin Corp's subsidiaries from the cellular flagship Advanced Information Service (AIS) to satellite firm Shin Satellite (ShinSat) to see whether their contract amendments comply with the law.

Moreover, Kularb Kaew - part of Temasek Holdings in the Shin Corp takeover deal - is being investigated to ascertain whether it acted as a nominee for Temasek in buying Shin Corp.

"And it's hard to speculate when and how all this will end," the analyst said.

Shin Corp's share price closed at Bt27 yesterday, down from Bt27.50, while AIS closed at Bt74 from Bt75.50 and ShinSat at Bt7.20 from Bt7.60.

iTV shares were Bt1 in morning trading yesterday, before the SET posted a "Halt" sign on trading because there is the possibility of concession withdrawal if it fails to pay fees and fines to the government. Therefore, the SET temporarily halted share trading until iTV clarifies or discloses relevant information to the bourse.

The share of Shin's net earnings contributed by AIS dropped by 13.41 per cent, primarily due to a decrease of revenue resulting from intense competition and an increase in sales and administrative expenses.The contribution from ShinSat dropped by 99.51 per cent because of the full-year iPSTAR amortisation in 2006 compared to one-month amortisation the previous year, and an increase in marketing expenses.

iTV accounted for Bt1.026 billion of Shin's Bt5.21-billion reduction in net earnings, the broadcasting unit making a net loss of Bt1.78 billion against a net profit of Bt679 million the previous year. This was due to a decline in revenue and a rise in the concession fee.

Yesterday, iTV executive

chairman Niwatthamrong Boonsongpaisan said iTV was unable to pay the government Bt100 billion in fines and overdue concession fees by the deadline of March 6.

The government said yesterday it would revoke iTV's broadcasting concession and take control of the company if the fines are not paid by the deadline, but that employees would be retained and the company would continue to operate.

Capital OK accounted for Bt1.516 billion of Shin's overall reduction in net profit. This was largely because Shin Corp increased its stake in the unit to 99.9 per cent in October. In addition, Capital OK's net loss increased as a result of higher interest costs and allowance for doubtful accounts.

Shin owns 42.8 per cent of AIS, 41.34 per cent of ShinSat, and 52.92 per cent of iTV.

Shin Corp was founded by members of deposed prime minister Thaksin Shinawatra's family, who sold their combined majority stakes to Singapore's state-linked Temasek Holdings last year.

Shin Corp's board yesterday approved a dividend payment for 2006 of Bt2.30 per share, totalling about Bt8 billion. Since Bt1.30 per share was paid on September 14 as an interim dividend, it will pay the remaining Bt1 to shareholders on May 11.

Telecom Reporters

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