3’s losses narrow; break-even expected in 2007

24 Aug 2006

Hong Kong-based mobile operator Hutchison 3 Group reported narrowing losses in the first half of this year, on the back of rising subscriber numbers and revenues. Losses before interest and tax fell to HKD12 billion (USD1.54 billion) from HKD20 billion a year earlier. Revenues were up 36% year-on-year to HKD24.8 billion, and worldwide subscribers rose 16% from the end of December to 13.5 million. The company said customer growth came mainly in the post-paid segment, with the exception of Italy where pre-paid growth was also strong. Data service revenue as a percentage of ARPU rose to 28% from 25%. Looking ahead, 3 Group said it expects losses to narrow further in the second half, but has delayed a target for the 3G business to break even before interest, tax, depreciation and amortisation from this year to the first half of 2007. For the first six months of 2006, parent company Hutchison Whampoa’s net profit jumped 100% to HKD18.8 billion, compared with HKD9.42 billion a year ago after the group booked a hefty exceptional profit from selling part of its port business. The Hong Kong firm has been forced to sell various assets in recent years to cushion the negative impact of its 3G mobile business on its balance sheet.

Hong Kong, CK Hutchison