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Hutchison Telecom Reports Record Profit for 2006

编辑:AG集&# 日期:2018-10-03


Mobile Customer Base Surges 75% to 30 Million

HONG KONG, March 20 /Xinhua-PRNewswire-FirstCall/ --

Key Highlights:

-- Record profit for the year of 大发HK$1,576 million from a loss in 2005

-- Mobile customer base grew 75% to 30 million worldwide

-- Turnover increased 37% to HK$33.4 billion

-- EBITDA surges 56% to HK$10.1 billion

-- Profit attributable to equity holders turns positive to

HK$201 million

-- Proposed sale of India interests at significant premium

Financial highlights:

2005 2006

HK$ HK$ Change

million million %

Continuing operations:

Turnover 24,356 33,378 +37%

Operating profit before disposal of

investments and others 2,083 5,001 +140%

Profit before taxation 636 2,402 +278%

Profit/(loss) for the year (150) 1,576 --

Profit/(loss) attributable to equity

holders of the Company: (768) 201 --

Earnings/(loss) per share HK$(0.17) HK$0.04 --

Hutchison Telecommunications International Limited ("Hutchison Telecom", the "Company" or the "Group"; SEHK: 2332; NYSE: HTX) is pleased to announce record profit of HK$1,576 million for the full year ended 31 December 2006, backed by strong operating results from India and Israel, a return to operating profit in the mobile business in Hong Kong and the first positive EBITDA in Thailand. In line with the increase in profit, the Group recorded a profit attributable to equity holders of HK$201 million.

Turnover increased by 37% in 2006 to HK$33,378 million, driven by a 75% increase in the Group's customer base, which stood at just under 30 million at the end of 2006.

Earnings before Interest, Taxation, Depreciation and Amortisation ("EBITDA") increased 56% to HK$10,077 million and EBITDA margin increased to 30.2% compared to margins of 26.5% in 2005. Excluding its start-up operations all of the Group's businesses recorded an increase in EBITDA with particularly strong contributions from India and Israel, as well as increased EBITDA from the mobile operations in Hong Kong and the first positive EBITDA recorded by the operations in Thailand. These increases were partially offset by the start-up losses in Vietnam and Indonesia.

Profit before taxation from continuing operations increased 278% to HK$2,402 million despite increased interest charges resulting from higher levels of debt incurred to finance increased investment and several acquisitions that were completed during the year.

Basic earnings per share were HK$0.04 for 2006, compared with a loss of HK$0.17 per share in the previous year. The Company did not declare any dividends for the year ended 31 December 2006.

Dennis Lui, Chief Executive Officer of Hutchison Telecom said: "2006 was a year of tremendous achievement for Hutchison Telecom. The work we began in 2005 formed the base for our excellent results, including record profits and our first annual profit attributable to shareholders."

"We work every day to build value in the dynamic markets in which we operate and are confident that we will further improve our businesses and profitability in 2007," Mr Lui said.

On 12 February 2007, the Group announced the proposed sale of its entire interest in Hutchison Essar Limited ("Hutchison Essar") in India to Vodafone for a consideration of US$11,080 million. The Board of Directors has since proposed to declare a special dividend of HK$6.75 per share on completion of the sale.

"We built one of the most successful, respected and valuable businesses serving India's growing telecom market and we were able to lock-in that value for shareholders and achieve a substantial return on the Group's investment at a significant premium. We currently expect the transaction to close during the second quarter of 2007 which will leave us as one of the best capitalised telecom companies in the region" Mr Lui said.

Operations review

India

-- Customer base surges to approximately 23.3 million - 104%

year-on-year growth

-- Turnover increases 55% to HK$15,455 million

-- EBITDA rises 51% to HK$4,900 million

2006 was a landmark year for the Group's Indian operation Hutchison Essar. The company reported excellent results despite continued competition in the market and some downward pressure on pricing. Its number of licences grew from 13 "circles" ("Hutch 13") to 22 out of India's 23 circles in 2006. The remaining pending licence, for the circle of Madhya Pradesh, was obtained in early 2007.

The company registered record growth in its customer base of 104% to 23.3 million, driven by aggressive network expansion together with the introduction of attractive product plans in prepaid and the acquisition of Hutchison Essar Cellular Limited (formerly BPL Mobile Cellular Limited) ("HECL").

The surge in customer base drove the increase in turnover to HK$15,455 million, a 55% year on year increase. EBITDA was HK$4,900 million in 2006 and the EBITDA margin was 31.7%.

Operating profit before disposal of investments and others was HK$3,628 million in 2006, an increase of 49%.

Capital expenditure was HK$7,016 million. The underlying Hutch 13 capital expenditure was in line with our expectations but overall capital expenditure ended up being lower than originally forecast primarily because of lower capital expenditure in HECL and delays in the receipt licences.

Hong Kong and Macau

Combined turnover from the Group's fixed and mobile businesses in Hong Kong and Macau was HK$6,605 million in 2006. EBITDA was HK$2,223 million in 2006 and the EBITDA margin was 33.7%.

Hong Kong and Macau mobile

-- Customer base of 2.1 million

-- Turnover increases 9% to HK$4,199 million

-- EBITDA increases 75% to HK$1,349 million

-- Over 800,000 3G customers as at 20 March, 2007

Despite intense competition in Hong Kong during 2006, turnover increased 9% to HK$4,199 million in driven primarily by healthy growth in ARPU from 3G contract customers. The businesses also recorded a 75% increase in EBITDA and an improvement in EBITDA margin from 20% in 2005 to 32.1% in 2006. As a result of the strong operating performance, operating profit increased to HK$247 million from a loss of HK$420 million in 2005.

By the end of 2006, the mobile customer base in Hong Kong and Macau stood at 2.1 million, an increase of 9% compared with 2005. The Group's Hong Kong mobile business continues to report excellent growth in its 3G customer base which is now over 800,000.

Hong Kong fixed line

-- Turnover increases 9% year-on-year to HK$2,406 million

-- EBITDA increases to HK$874 million

The market for fixed line services in Hong Kong showed improvement in 2006 as some of the wholesale and retail prices began to firm against a backdrop of continued volume growth.

The increase in turnover was driven primarily by international and local data services and residential broadband services. EBITDA was HK$874 million in 2006 compared with HK$696 million in 2005, which represented a strong improvement in the EBITDA margin to 36.3% compared with 31.6% in 2005. As a result, operating profit increased over threefold to HK$259 million in 2006.

Israel

-- Customer base of 2.7 million

-- Turnover increases 12% to HK$9,796 million

-- EBITDA increases 18% to HK$ 3,179 million

Partner Communications Company Limited ("Partner") recorded excellent results for the year, with the company again achieving record profitability. The company reported healthy growth in its customer base, most coming from the business sector. The share of 3G customers in its base also increased to more than 10%, providing important revenue streams to support future growth.

Partner's turnover increased to HK$9,796 million, a 12% increase compared to total pro forma turnover of HK$8,750 million in 2005, backed by growth in service revenue resulting from higher minutes of use. EBITDA in 2006 increased to HK$3,179 million and EBITDA margin improved to 32.5% in 2006 from 30.0% in 2005.

As a result of this stronger operating performance, operating profit before disposal of investments and others increased to HK$1,708 million in 2006 compared with HK$832 million in 2005. This represented 34% of the Group's operating profit before disposal of investments and others.

Vietnam

During the fourth quarter 2006 the Group's Vietnamese operation HT Mobile opened three exclusive flagship shops and added major dealer shops in key cities, laying the foundation to provide customers with dependable wireless voice service with flexible calling plans, as well as advanced high-speed multi-media data services available on a wide range of handsets. The Company subsequently launched commercial services in January 2007.

Entering Vietnam marks a significant step forward for Hutchison Telecom and its vision of delivering growth through investment in attractive telecom markets. Vietnam is one of the most vibrant and high growth economies in the region. Leveraging on Hutchison Telecom's experience and resources in global procurement, content development and technology deployment, HT Mobile is well positioned to succeed.

Indonesia

The Group's strategic investment to enter the Indonesia market, one of the most exciting growth markets in the region, is set to launch both 2G and 3G service on 30 March, 2007. With a sizeable population of approximately 245 million, wireless penetration levels below average for the region and an opportunity that fits the Group's investment criteria of offering nationwide spectrum with a migration path to the advanced data services offered by 3G the Group views Indonesia as one of the key growth markets in Asia.

Efforts have been made to contain start-up losses through implementation of a very tight operating cost structure with a majority of cross-functional business elements outsourced to leading global service providers. Cost structures have been aligned to grow with future revenue growth.

The Group is confident that Indonesia will be one of its principal growth markets in the years to come.

Thailand

-- Customer base of 728,000

-- Turnover of HK$1,017 million

-- First positive EBITDA of HK$57 million

Considerable work occurred to streamline the operations and re-orient the business in Thailand to better address the market. Management's efforts to improve operational efficiency over the last year resulted in the business reporting its first positive EBITDA and an EBITDA margin of 5.6% for the year.

Turnover was HK$1,017 million in 2006, a slight decrease owing to extremely aggressive competition in the market and an increase in the ratio of prepaid customers compared with postpaid customers. Despite the difficult operating environment, the business strategy is firmly set on managing the profitability of the customer base. This strategy enabled it to experience less of a decline in ARPU than other competitors in Thailand.

Others

-- Turnover of HK$505 million

-- LBITDA of HK$282 million

"Others" for 2006 comprised Sri Lanka, Ghana, Indonesia, Vietnam and Corporate, as well as the non-telecommunications businesses of Vanda IT Solutions & Systems Management Limited ("VISS") in Hong Kong, the People's Republic of China, Malaysia and Singapore up to the date of disposal in July 2006 when the Group disposed of its 100% interest in VISS.

Turnover in 2006 was HK$505 million, and LBITDA was HK$282 million. The losses were mainly attributable to the inclusion of operating expenses incurred by the start-up operations in Vietnam and Indonesia and operating losses from Ghana and Corporate office expenses. The losses were offset by improved EBITDA from Sri Lanka, which performed very well more than doubling its customer base to nearly 600,000 in 2006.

Outlook

In a short period, Hutchison Telecom has established an enviable track record for creating shareholder value. This reflects the solid foundations and excellent management in the Group.

2007 will be a transition year for the Group. Hutchison Telecom expects to complete the sale of its interests in India in the second quarter of 2007 which will leave the Group exceptionally well capitalised and able to take advantage of opportunities as they arise. Building on our successful track record, Hutchison Telecom's strategy of becoming a leading telecom operator in dynamic markets will drive the business. The Group will seek opportunities in emerging telecoms markets that it believes can create long-term value for its shareholders. With its existing group of businesses, Hutchison Telecom retains an attractive balance between businesses that offer excellent cash generation and those that offer attractive growth prospects. The Group has high expectations for our businesses in Indonesia, Vietnam and Sri Lanka, whilst its established operations in Israel and Hong Kong provide improving cash flow and profitability to support these start-ups through their early stages.

2007 will be a year of continued investment for the Group's early stage operations to strengthen their position and take advantage of the opportunities in these markets provide. Hutchison Telecom anticipates investing on the order of HK$6 billion to HK$7 billion in capital expenditure to expand its operations. The Group plans to invest in aggregate HK$3 billion to HK$4 billion in Indonesia and up to HK$1 billion in Vietnam during 2007. The balance of the investment is planned for the 3G network in Israel and maintenance expenditure across the rest of our businesses.

Notes to editors:

About Hutchison Telecommunications International Limited

Hutchison Telecommunications International Limited (Hutchison Telecom or the Group) is a leading global provider of telecommunication services.

The Group currently offers mobile and fixed-line telecommunication services in Hong Kong and operates or is rolling out mobile services in Macau, India, Israel, Thailand, Sri Lanka, Vietnam, Ghana and Indonesia. It was the first provider of 3G mobile services in Hong Kong and operates brands including "Hutch", "3", orange (TM) and "HT Mobile".

Hutchison Telecom is a listed company with American Depositary Shares quoted on the New York Stock Exchange under the ticker HTX and shares listed on the Stock Exchange of Hong Kong under the stock code 2332.

A member of the Hong Kong-based Hutchison Whampoa Group, Hutchison Telecom is dedicated to providing superior telecommunications services in markets with high growth potential. For more information about Hutchison Telecom, see http://www.htil.com .

Disclaimer:

Non-GAAP Measures

While non-GAAP (generally accepted accounting principles) measures such as EBITDA and LBITDA are often used by companies as an indicator of operating performance, they are not expressly permitted measures under GAAP in Hong Kong and may not be comparable to similarly titled measures for other companies. Accordingly, such non-GAAP measures should not be considered as an alternative to operating income as an indicator of the operating performance of the Group or as an alternative to cash flows from operating activities as a measure of liquidity. The use of non-GAAP measures is provided solely to enhance the overall understanding of the Group's current financial performance. Additionally because the Group has historically reported certain non-GAAP results to investors, the Group considers the inclusion of non GAAP measures provides consistency in our financial reporting.

Forward-looking statements:

This press release contains forward-looking statements. Statements that are not historical facts, including statements about the Company's beliefs and expectations, are forward-looking statements. These statements are based on current plans, estimates and projections, and therefore you should not place undue reliance on them. Forward-looking statements speak only as of the date they are made, and the Company undertakes no obligation to update publicly any of them in light of new information or future events. Forward-looking statements involve inherent risks, uncertainties and assumptions. The Company cautions you that if these risks or uncertainties ever materialise or the assumptions prove incorrect, or if a number of important factors occur or do not occur, the Company's actual results may differ materially from those expressed or implied in any forward-looking statement. Additional information as to factors that may cause actual results to differ materially from the Company's forward-looking statements can be found in the Company's filings with the United States Securities and Exchange Commission.

SELECTED UNAUDITED KEY PERFORMANCE INDICATORS

Customer Base Q4 2006 Q3 2006

31 December 2006 30 September 2006

Total Postpaid Prepaid Total Postpaid Prepaid

Country ('000) ('000) ('000) ('000) ('000) ('000)

Hong Kong

(incl Macau) 2,139 1,513 626 2,088 1,475 613

India 23,306 3,346 19,960 20,357 3,238 17,119

Israel 2,669 1,888 781 2,626 1,854 772

Thailand 728 311 417 737 318 419

Others 759 -- -- 661 -- --

Total 29,601 -- -- 26,469 -- --

Customer Base Q2 2006 Q1 2006

30 June 2006 31 March 2006

Total Postpaid Prepaid Total Postpaid Prepaid

Country ('000) ('000) ('000) ('000) ('000) ('000)

Hong Kong

(incl Macau) 2,065 1,431 634 2,009 1,398 611

India 17,544 3,024 14,520 15,361 2,899 12,462

Israel 2,585 1,817 768 2,560 1,798 762

Thailand 738 329 409 747 346 401

Others 537 -- -- 425 -- --

Total 23,469 -- -- 21,102 -- --

Customer Base Q4 2005

31 December 2005

Total Postpaid Prepaid

Country ('000) ('000) ('000)

Hong Kong

(incl Macau) 1,971 1,365 606

India 11,413 2,535 8,878

Israel 2,529 1,775 754

Thailand 732 345 387

Others 296 -- --

Total 16,941 -- --

Notes:

(1) A customer is defined as a Postpaid Customer or a Prepaid Customer

who has a Subscriber Identity Module (SIM) or Universal Subscriber

Identity Module (USIM)that has access to the network for any

purpose, including voice, data or video services.

(2) Postpaid Customers are defined as those whose mobile

telecommunications service usage is paid in arrears upon receipt of

the mobile telecommunications operator's invoice and who have not

been temporarily or permanently suspended from service.

(3) Prepaid Customers are defined as customers with prepaid SIM cards or

prepaid USIM cards that have been activated but not been used up or

expired at period end.

A new prepaid customer is recognised upon making the first call or

registration/activation.

(4) All numbers quoted on the basis of the total customer base of the

operation irrespective of the Company's ownership percentage.

(5) All numbers quoted as at last day of the quarter.

(6) The data for Hong Kong and Israel relate to both 2G and 3G services.

(7) Others is currently comprised of Ghana and Sri Lanka.

ARPU(Note 1) Q4 2006 Q3 2006

31 December 2006 30 September 2006

Country Currency Blended Postpaid Prepaid Blended Postpaid Prepaid

Hong Kong

(incl Macau) HKD 156 208 29 151 204 28

India INR 414 1,114 290 420 1,065 293

Israel NIS 158 -- -- 164 -- --

Thailand THB 538 913 252 545 923 251

Others USD 4.94 -- -- 5.27 -- --

ARPU(Note 1) Q2 2006 Q1 2006

30 June 2006 31 March 2006

Country Currency Blended Postpaid Prepaid Blended Postpaid Prepaid

Hong Kong HKD 152 206 28 147 199 28

(incl Macau)

India INR 433 1,116 283 454 1,118 285

Israel NIS 158 -- -- 152 -- --

Thailand THB 582 961 265 643 1,000 332

Others USD 5.65 -- -- 5.91 -- --

ARPU(Note 1) Q4 2005

31 December 2005

Country Currency Blended Postpaid Prepaid

Hong Kong HKD 153 204 34

(incl Macau)

India INR 511 1,155 310

Israel NIS 148 -- --

Thailand THB 627 969 321

Others USD 6.25 -- --

Notes:

(1) Average Revenue Per User (ARPU) is calculated as the total Service

Revenues for the period divided by the weighted average number of

activated customers for the period.

(2) Service Revenues are defined as the direct recurring service revenues

plus roaming revenues.

(3) The data for Hong Kong and Israel relate to both 2G and 3G services.

(4) Others is currently comprised of Ghana and Sri Lanka.

MOU (Note 1) Q4 2006 Q3 2006

31 December 2006 30 September 2006

Country Blended Postpaid Prepaid Blended Postpaid Prepaid

Hong Kong

(incl Macau) 489 671 49 474 659 48

India 429 887 347 406 839 319

Israel 316 -- -- 322 -- --

Thailand 754 1,050 530 731 973 543

Others 118 -- -- 120 -- --

MOU (Note 1) Q2 2006 Q1 2006

30 June 2006 31 March 2006

Country Blended Postpaid Prepaid Blended Postpaid Prepaid

Hong Kong

(incl Macau) 460 643 47 451 628 47

India 392 804 301 378 753 282

Israel 307 -- -- 301 -- --

Thailand 684 901 503 668 880 483

Others 131 -- -- 129 -- --

MOU (Note 1) Q4 2005

31 December 2005

Country Blended Postpaid Prepaid

Hong Kong

(incl Macau) 455 632 50

India 385 728 278

Israel 287 -- --

Thailand 662 861 484

Others 138 -- --

Notes:

(1) Minutes of Use (MOU) are calculated as the total minutes carried over

the network (2G total airtime usage + 3G voice and video usage,

including both inbound and outbound roaming)

for the period divided by the weighted average number of activated

customers for the period.

(2) The data for Hong Kong and Israel relate to both 2G and 3G services.

(3) Others is currently comprised of Ghana and Sri Lanka.

Churn(Note 1) Q4 2006 Q3 2006

31 December 2006 30 September 2006

Country Blended Postpaid Prepaid Blended Postpaid Prepaid

Hong Kong

(incl Macau) 4.7% 1.8% 10.1% 4.0% 1.8% 7.8%

India 4.9% 4.1% 5.0% 5.1% 4.3% 5.2%

Israel 1.3% -- -- 1.2% -- --

Thailand 7.0% 4.5% 9.0% 6.8% 4.9% 8.4%

Others 2.3% -- -- 2.1% -- --

Churn(Note 1) Q2 2006 Q1 2006

30 June 2006 31 March 2006

Country Blended Postpaid Prepaid Blended Postpaid Prepaid

Hong Kong

(incl Macau) 3.9% 2.0% 7.3% 4.5% 2.0% 8.7%

India 5.1% 5.0% 5.1% 5.2% 5.2% 5.2%

Israel 1.4% -- -- 1.4% -- --

Thailand 6.9% 5.1% 8.5% 5.4% 3.4% 7.2%

Others 2.0% -- -- 2.1% -- --

Churn(Note 1) Q4 2005

31 December 2005

Country Blended Postpaid Prepaid

Hong Kong

(incl Macau) 4.2% 2.2% 7.5%

India 5.7% 5.2% 5.8%

Israel 1.0% -- --

Thailand 6.4% 3.8% 8.8%

Others 3.9% -- --

Notes:

(1) Churn % represents the average of the monthly churn rates in the

period, which are calculated as the average number of disconnections

(net of reconnection and internal migration between networks) for

the period divided by the weighted average number of activated

customers for the period.

(2) The data for Hong Kong and Israel relate to both 2G and 3G services.

(3) "Others" is currently comprised of Ghana and Sri Lanka.

The Board wishes to remind investors that the above key performance

indicators are based on the Group's unaudited internal records.

Investors are cautioned not to unduly rely on such data.

CONSOLIDATED INCOME STATEMENT

For the year ended 31 December

2005 2006 2006

HK$ HK$ US$

millions millions millions

Continuing operations:

Turnover 24,356 33,378 4,290

Cost of inventories sold (2,331) (2,305) (296)

Staff costs (2,319) (2,666) (343)

Depreciation and amortisation (4,367) (5,076) (652)

Other operating expenses (13,256) (18,330) (2,356)

Operating profit before

disposal of investments and

others 2,083 5,001 643

Profit on disposal of

investments and others, net 71 44 6

Operating profit 2,154 5,045 649

Interest income 65 121 16

Interest and other finance

costs (1,669) (2,763) (356)

Share of results of associates 86 (1) --

Profit before taxation 636 2,402 309

Taxation (434) (826) (106)

Profit for the year from

continuing operations 202 1,576 203

Discontinued operations:

Loss from discontinued

operations (352) -- --

Profit / (loss) for the year (150) 1,576 203

Attributable to:

Equity holders of the Company:

- continuing operations (416) 201 26

- discontinued operations (352) -- --

(768) 201 26

Minority interest - continuing

operations 618 1,375 177

(150) 1,576 203

Dividends -- -- --

Earnings / (loss) per share from

continuing operations

attributable to the equity

holders of the Company:

- basic HK$(0.09) HK$0.04 US$0.01

- diluted HK$(0.09) HK$0.04 US$0.01

Earnings / (loss) per share

attributable to the equity

holders of the Company:

- basic HK$(0.17) HK$0.04 US$0.01

- diluted HK$(0.17) HK$0.04 US$0.01

CONSOLIDATED BALANCE SHEET

As at 31 December

2005 2006 2006

HK$ HK$ US$

millions millions millions

ASSETS

Current assets

Cash and cash equivalents 2,436 2,048 263

Restricted cash 1 -- --

Trade and other receivables 10,009 10,090 1,297

Stocks 688 436 56

Derivative financial assets 9 23 3

Total current assets 13,143 12,597 1,619

Non-current assets

Fixed assets 24,591 31,962 4,108

Goodwill 9,688 19,571 2,516

Other intangible assets 9,182 10,760 1,383

Other non-current assets 2,067 3,829 492

Deferred tax assets 918 997 128

Interests in associates 2 2 --

Total non-current assets 46,448 67,121 8,627

Total assets 59,591 79,718 10,246

LIABILITIES

Current liabilities

Trade and other payables 10,535 13,479 1,732

Borrowings 7,690 16,048 2,063

Current income tax liabilities 130 153 20

Derivative financial

liabilities 116 185 24

Total current liabilities 18,471 29,865 3,839

Non-current liabilities

Borrowings 19,002 23,369 3,004

Deferred tax liabilities 963 1,075 138

Other non-current liabilities 1,333 2,992 384

Total non-current liabilities 21,298 27,436 3,526

Total liabilities 39,769 57,301 7,365

EQUITY

Capital and reserves

attributable to equity

holders of the Company

Share capital 1,188 1,191 153

Reserves 14,982 15,468 1,988

16,170 16,659 2,141

Minority interest 3,652 5,758 740

Total equity 19,822 22,417 2,881

Total equity and liabilities 59,591 79,718 10,246

Net current liabilities 5,328 17,268 2,220

Total assets less current

liabilities 41,120 49,853 6,407

For further information, please contact:

Mickey Shiu

Corporate Communications

Work: +852-2128-3107

Mobile: +852-9092-8233

Email : mickeyshiu@htil.com.hk

Dan Evans

Investors Relations

Work: +1-425-709-8888

Mobile: +1-425-753-0737

Email: danevans@htil.com.hk