Hutchison reports 19% rise in net profits: beats expectations

20 Mar 2003

Hong Kong-based conglomerate Hutchison Whampoa [Hong Kong: 0013.HK], Asia’s largest investor in the European mobile sector, reported a 19% increase in net income to HKD14.28 billion (USD1.8 billion) for the twelve months to 31 December 2002 from HKD11.98 billion the previous year, beating the average figure of HKD11.2 billion predicted by analysts. Group sales rose to HKD75.2 billion from HKD61.5 billion. Hutchison’s telecommunications division reported turnover of HKD13.37 billion and EBIT of HKD818 million, increases of 17% and 14% respectively from 2001. The company said the strong performance reflected the results of its domestic fixed and mobile operations, encouraging results from its 2G mobile ventures – in particular Australia, India and Israel – and dividends received from equity investments in Vodafone and Deutsche Telekom. Subscribers to 2G cellular operations increased by 34% during the course of the year, boosting the Group’s customer total base to 6.1 million.

In Hong Kong Hutchison maintained its position as the country’s leading mobile operator with 1.7 million subscribers, a market share of 28%. Orange mobile subscribers in Australia rose by 37% to over 263,000 and the operator achieved a milestone by reporting positive earnings before EBITDA. The Group’s combined Indian operations increased their total subscriber base by 80% to over two million. EBIT decreased by 15% as EBIT growth from existing operations in Mumbai, Dehli, Kolkata and Gujarat was offset by start-up costs relating to the company’s new licensees has in the franchise areas of Andhra Pradesh, Karnataka and the city of Chennai; all launched GSM networks in June 2002. In Israel, Partner Communications said it had increased its subscriber base by 26% in 2002, to 1.8 million, in the process returning its first ever profit of USD18 million. Elsewhere, the Group’s 3G operations in the UK, Italy, Sweden, Denmark and Austria along with its CDMA 1X operation in Thailand were said to be in a ‘pre-operating investment phase in 2002 and the related pre-operating expenses of HKD1.87 billion which have been charged to the profit and loss account, have been compensated for by the release of provisions made in previous years’. Hutchison 3G UK launched its UMTS service 3 on 3 March 2003 and announced that the delivery of handsets to the UK and Italy would commence in mid-March. It has committed to delivering 700,000 handsets by May. 3G services for Sweden, Denmark and Austria are scheduled to begin later this year.

Hong Kong