Hong Kong conglomerate CK Hutchison’s H1 earnings were buoyed by its telecoms business in Europe, although the growth was offset by “lower contribution” from its Asia operations.
In a statement, CK Hutchison said all of its 3 Group businesses in Europe delivered “promising results and continued positive EBITDA less capex” in the six months to 30 June.
The group’s Italian joint venture Wind Tre contributed heavily to a 69 per cent year-on-year increase in active European customers to 45.2 million. Italy accounted for 60 per cent of those customers, well ahead of the UK in second place with 22 per cent.
CK Hutchison merged its 3 Italia business with VimpelCom’s (now Veon) Wind in November 2016, becoming the largest mobile operator in the country by customers.
Revenue for 3 Group Europe in H1 2017 increased 10 per cent year-on-year to HKD33.2 billion ($4.2 billion), while EBITDA for the mobile business hit HKD11.3 billion, a 33 per cent increase.
The company stated the increase in EBITDA “was primarily due to the accretive contribution from the Wind Tre joint venture”.
While the group’s telecoms operations generated gains in Europe, the picture was not as rosy in the company’s home market.
Hutchison Telecommunications Hong Kong (HTHKH) experienced an EBITDA dip of 1 per cent to HKD1.3 billion as revenue fell 6 per cent year-on-year to HKD5.1 billion. Profit attributed to shareholders decreased 10 per cent year-on-year to HKD324 million, which the company said was due to the continued reduction in mobile roaming revenue and hardware sales, as well as higher amortisation of licence fees for renewed and new licences, which began in H2 2016.
The company’s combined mobile active customer base in Hong Kong and Macau reached 3.3 million, an increase from 3.1 million in the 2016 period.
For its Hutchison Asia Telecommunications business, EBITDA fell 79 per cent to HKD256 million, on revenue of HKD3.8 billion, a 4 per cent dip.
The company said the EBITDA decline was due to “reduced margin contribution and higher operating costs in Indonesia”, after completing a major network roll out in 2016.
Revenue took a hit after its Indonesia operation was unable to “offer competitive LTE price plans” until it launched its LTE service in May 2017, while rivals had offered LTE services in the market since the beginning of the year.
Hutchison added it expects Indonesia to “report improved contributions in the second half of the year.
Vodafone Hutchison Australia, which is 50 per cent owned by the Hutchison Group, generated an operating profit of HKD27 million, a significant turnaround from an operating loss of HKD328 million in H1 2016. The growth was driven by an improved contract customer base and increased contribution from MVNO customers.
Hutchison released its results days after confirming a deal to sell its fixed business Hutchison Global Communications (HGC) to Asia Cube Global Communications in a deal worth HKD14.5 billion. The group vowed to invest the proceeds into its mobile business.