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3 Group’s EBITDA jumps 15% in H1

31 Jul 2014

Hutchison Whampoa’s 3 Group has reported that its registered 3G mobile customer base in Europe increased by 1% during the first six months of 2014 and totalled over 26.9 million customers as at 30 June, of which approximately 22.6 million were termed ‘active’ (a 2% increase during the period). 3 Group reported total six-month revenue of HKD31.063 billion (USD4.008 billion), a 3% increase over the same period last year. EBITDA and EBIT grew by 15% and 23% to HKD6.504 billion and HKD2.282 billion respectively. 3 Group continued to achieve positive EBITDA-minus-CAPEX for the semester, reflecting ‘well-disciplined operating and capital expenditure profile.’

All of 3 Group’s subsidiaries, in the UK, Italy, Sweden, Denmark, Austria and Ireland, achieved net active subscriber growth in H1 2014, with 3 Sweden posting the highest percentage growth, at 5%. Sweden also achieved the highest ARPU increase in local currency in the six-month period, of 3%, whilst 3 UK was the only other unit to raise ARPU (+1%), whereas the other sister companies reported ARPU declines: 3 Italia (-7%), 3 Denmark (-4%), 3 Austria (-6%), and Ireland (-1%). ARPU for the group as a whole averaged a 2% decline.

3 UK experienced another period of strong underlying results, reporting EBITDA and EBIT growth of 23% and 43% to GBP232 million (USD393 million) and GBP123 million respectively in 1H14. In contrast, the increasingly competitive environment in Italy continued to add pressure to 3 Italia’s revenue growth and resulted in higher total subscriber acquisition costs; together with the increased operating costs to support an enlarged network, 3 Italia reported a 46% lower EBITDA at EUR72 million and an EBIT loss of EUR71 million for the first half of 2014.

Following the end of the reporting period, on 15 July 2014 the group completed the acquisition of O2 Ireland for EUR780 million (USD1.045 billion) with an additional deferred payment of EUR70 million payable upon achievement of certain agreed financial targets.

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