HTIL marches back to black

9 May 2007

Hutchison Telecommunications International Limited (HTIL) has reported that it swung to a first-quarter net profit on rising subscriber numbers, particularly in India. The company has this week completed the sale of its Indian business, previously its biggest revenue contributor, but said it expects interest on the proceeds from the transaction to help maintain profitability. The Hong Kong listed firm said net profit for the three months ending 31 March was HKD220 million (USD28.1 million), compared with a net loss of HKD24 million a year earlier, as its total number of mobile subscribers rose 56% year-on-year to 33 million, up from 21.1 million at end-March 2006. HTIL, a 49.8%-owned unit of Hutchison Whampoa, operates mobile networks in Hong Kong, India, Thailand, Israel, Macau, Sri Lanka, Indonesia, Vietnam and Ghana, including 3G services in Israel and Hong Kong. It also has fixed line operations in Hong Kong. Subscribers to Hutchison Essar in India rose 72% year-on-year to 26.4 million at the end of the first quarter. Excluding India, HTIL’s total customer base grew to 6.6 million during the period, up from approximately 6.3 million at the end of the previous quarter and 5.7 million at the same date the year before. The Group’s operations in Sri Lanka and Ghana more than doubled their respective customer base year-on-year, whilst both Hong Kong and Israeli operations reported continued growth in their 3G customer base to over 818,000 and 333,000 respectively at the end of March 2007. The company launched operations in Vietnam and Indonesia in the first quarter, and noted in a statement that developments in both countries are in accordance with its business plan and budget, and that it is satisfied with performance so far. HTIL claims it can break even in EBITDA terms in both markets in two years.

Having now sold its 67% stake in Hutchison Essar to UK based Vodafone Group for USD11.1 billion, HTIL has said it will return USD4.18 billion to shareholders in a special dividend. Chief Executive Dennis Lui said the company also plans to use the proceeds from the sale to invest in new markets, but declined to say what countries it is looking at.