3 Group narrows loss and continues to eye profit - Mobile World Live

3 Group narrows loss and continues to eye profit

30 MAR 2010

Hong Kong-based conglomerate Hutchison Whampoa today reported that its 3 Group posted a narrower loss for full-year 2009 and believes the unit could turn profitable on an operating level this year. LBIT (Losses Before Interest & Taxes) at the third-generation mobile unit – which has networks in the UK and Ireland, Italy, Australia, Sweden and Denmark, and Austria – came in at HK$5.3 billion (US$683 million), a 67 percent improvement on a restated LBIT of HK$15.8 billion in 2008. The improvement was primarily due to a gain on the merger of 3 Australia (with Vodafone Australia), customer growth and cost and licences amortisation reductions. The company in August delayed its target date for achieving positive earnings before interest and tax for the operation, amid the global financial downturn, but noted the following in a statement today: “Barring any significant adverse market developments or regulatory developments the 3 Group’s results are expected to continue to improve and going forward to make a positive contribution to the Group’s EBIT results.” The group’s 3G customer base increased 29 percent during the year, to 26.8 million customers, 4.5 million of which are mobile broadband subscribers (a 75 percent year-on-year increase). Worringly, ARPU declined 15 percent to EUR28.32 and 3 Group’s total revenue (after translation to Hong Kong dollars) decreased 5 percent to HK$57.6 billion.

Hutchison Whampoa as a whole improved its bottom line last year despite deteriorating revenue by boosting its earnings through one-off asset disposals. Full-year sales fell 11.4 percent to HK$208.8 billion. However, net profit rose 12 percent to HK$14.2 billion. It earned HK$12.5 billion by selling its telecoms business in Israel and Indonesia last year, among other things.

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