3 Group sees strong 2012, but Australia weighs on Hutchison numbers

3 Group sees strong 2012, but Australia weighs on Hutchison numbers

26 MAR 2013
Li Ka-Shing, Hutchinson Whampoa

Hutchison Whampoa announced solid results from its various mobile businesses in 2012, although its troubled Vodafone Hutchison Australia joint venture remained the exception to the rule.

The company said its 3 Group Europe had benefited from “success in gaining leading positions in the smartphone and mobile data segments, which are continuing to drive increased demand for data services at unprecedented rates”.

However, its long-troubled Vodafone Hutchison Australia (VHA) business has seen contrasting fortunes, with Hutchison taking a charge of HKD1.8 billion ($232 million) related to its share of VHA’s operating losses and its share of network closure and restructuring costs.

From the second half of 2012, VHA is in the process of a “shareholder-sponsored restructuring”, under the leadership of Vodafone Group, in line with the terms of the shareholders’ agreement.

Boosted by smartphones and mobile data adoption, EBIT at 3 Group Europe was HKD3.15 billion, a 101.6 per cent jump from HKD1.57 billion. Revenue grew 3.2 per cent, to HKD58.71 billion.

The group’s registered 3G customer base in Europe increased by 9 per cent during the year, and currently stands at more than 23.5 million customers.

The company said that it operating “remain focused on the acquisition of high margin customers and also the upsell of the existing customer base to higher margin service offerings”.

It also said that “strict cost and spending disciplines with a view to achieving maximum operational leverage remains a priority”.

It was also noted that “further progress in the transition to a non-subsidised handset model in its customer base, together with gradual stabilisation of European mobile termination regimes, are expected to further improve the division’s contributions to the Group’s overall results going forward”.

Hutchison Telecommunications Australia (HTAL), the unit through which Hutchison owns its VHA stake, saw a loss of AUD393.5 million during the year, compared with AUD168 million in the prior-year period.  It was impacted by a 6 per cent decline in its customer base, “as brand perception remains poor”.

HTAL previously said that customer service revenue had decreased by 16.8 per cent year-on-year to AUD1.7 billion.

It noted that while continued losses are anticipated in 2013, the restructuring plan currently being executed by VHA’s management is expected to “stabilise the declining customer base and streamline its operating cost structure”.

EBIT at Hutchison Telecommunications Hong Kong (operating in Hong Kong and Macau) was HKD1.76 billion, up 22.4 percent from HKD1.44 billion, on revenue of HKD15.54 billion, up 15.9 percent from HKD13.41 billion.

This unit has more than 3.7 million active mobile customers, with its fixed line operations also continuing to grow. It said that last year’s launch of LTE services in Hong Kong means that it will “continue to lead in providing ultra high speed data services in mobility”.

The company saw an EBIT loss of HKD846 million at Hutchison Asia Telecommunications, down from a prior-year loss of HKD1.18 billion, on revenue of HKD4.45 billion, up 90.9 per cent from HKD2.33 billion.

It said that in 2013, it “expects to continue the growth momentum in its customer base”, which has increased “noticeably” from the second half of 2012. This unit has a mobile customer base of more than 40.3 million subscribers, with operations in Indonesia, Vietnam and Sri Lanka.

Revenue from data services has increased by 79 per cent year-on-year.

It will also expand its network speed and coverage to meet increasing demand, particularly in Indonesia.


Steve Costello

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