New World reports on fixed telecoms, CSL mobile results

17 Mar 2010

Hong Kong-based conglomerate New World Development (NWD), which includes wholly owned fixed line and broadband unit New World Telecom (NWT), has reported that profit attributed to its telecommunications division reached HKD71.0 million (USD9.1 million) in the six months ended 31 December 2009, compared to a loss of HKD49.4 million in the same period a year ago. The telecoms unit accounted for a small part of the firm’s reported 48.4% increase in total segment results to HKD3.69 billion. In its fiscal 2010 first-half report the company said that NWT has recently modernised its networks to create new revenue streams and drive business growth for the coming years. The network upgrades ‘will improve NWT’s time-to-market by responding faster to dynamically changing business needs.’

NWD also owns a 23.6% share in Hong Kong cellco CSL New World Mobility, whilst Australia’s Telstra owns the other 76.4%. In the first half of FY2010, according to NWD’s report, CSL New World Mobility recorded revenue of HKD2.514 billion, down 15.5% year-on-year in Hong Kong currency terms. The decrease was mainly driven by the decline in handset sales and voice revenue, offsetting 3.0% growth in mobile data revenues. Despite the improvement in EBITDA margin on sales revenue, CSL’s EBITDA dropped to HKD751 million, down 4.8% year-on-year, largely due to the decline in high margin international roaming. With the completion of the cellco’s HSPA-based ‘Next G’ network and the corresponding decommissioning and accelerated depreciation of the legacy network, the company’s depreciation and amortisation expense during the first half of FY2010 decreased substantially. Interim EBIT was turned to a gain of HKD453 million from a loss of HKD245 million in the first half of FY2009.