3 Group’s operating loss reduced by 82%; HTIL swings back to loss

6 Aug 2010

Hutchison Whampoa’s 3 Group division – including 3G operations in Italy, the UK, Ireland, Sweden, Denmark, Austria and Australia – increased its revenues by 13% year-on-year to HKD29.86 billion (USD 3.85 billion) in the first half of 2010. 3’s losses before interest and taxes (LBIT) were reduced to HKD998 million in the six months ended 30 June 2010, down by 82% compared to H1 2009 (if excluding a reduction in amortisation of 3 UK’s licence costs, LBIT was reduced by 56% y-o-y). The Hong Kong-owned group’s 3G mobile customer base increased by 6% from the start of the year to 26.05 million. Hutchison also reported that, including its separate domestic operations, it had 5.0 million mobile broadband subscribers under its control by 4 August 2010. 3 Group achieved EBITDA of HKD3.68 billion in the first six months of 2010, a huge jump from the HKD180 million in the comparable period last year; included in the EBITDA figure are one-time contributions from suppliers totalling approximately HKD1.01 billion, whilst the increase also reflects revenue growth and reduced operating, acquisition and customer retention costs. All country operations achieved either reduced LBIT or a turnaround to EBIT positive results in the period under review.

Hutchison Whampoa’s other international mobile division, Hutchison Telecommunications International Ltd (HTIL), with operations across Indonesia, Vietnam, Sri Lanka and Thailand, posted total revenues of HKD1.19 billion and LBIT of HKD869 million for the six-month period, a negative swing compared to the EBIT of HKD166 million for the same period of 2009. The result mainly reflects the divestment of its Israeli unit in October 2009, partially offset by one-time compensation contributions from suppliers. Excluding the EBIT contribution from Israel last year and the one-time compensation contributions in both years, recurring LBIT from ongoing operations in 1H10 increased by 39% year-on-year. At 30 June 2010 HTIL’s four units had a combined mobile customer base of 19.0 million, a 49% increase during the first half of the year, with nearly all the growth coming from Indonesia and Vietnam. Following the delisting of HTIL, including payments to non-controlling shareholders totalling HKD4.2 billion, the company became a wholly-owned subsidiary of Hutchison Whampoa on 24 May 2010.

Hutchison Telecommunications Hong Kong Holdings (HTHKH), a listed subsidiary of Hutchison Whampoa with operations in Hong Kong and Macau, posted 1H10 turnover of HKD4.28 billion and net profit attributable to shareholders of HKD361 million, a 5% and 41% increase respectively over the same period last year.

Hong Kong, CK Hutchison