3 Group reneges on breakeven forecast this year - Mobile World Live

3 Group reneges on breakeven forecast this year

20 OCT 2009

Hong Kong-based conglomerate Hutchison Whampoa has admitted that a previous forecast for its 3 Group mobile unit to breakeven (in terms of EBIT) this year is unlikely to happen. “Barring any further significant adverse market or regulatory developments, management expects LBIT [Losses Before Interest & Taxes] from the 3 Group to continue to narrow in the second half of the year,” noted Hutchison Whampoa in a statement announcing its first-half year results today. According to the Financial Times, Hutchison Whampoa chairman Li Ka-shing said he would rather be more conservative amid the economic downturn. “I think under the current environment when the economy is still uncertain, we should be cautious,” he commented. Canning Fok, managing director, added that most of the 3G units would break even on a before interest and tax basis this year, but he had “reservations” whether the Italian business (3 Italy) would be one of them.

LBIT at the 3 Group came in at HKD1.8 billion (US$232 million) for the six month period to 30 June 2009, although this was a 66 percent improvement on the HKD5.3 billion loss reported in the year-ago period. While revenues at the operation declined 18 percent to HKD26.38billion, the company booked a gain of HKD3.64 billion from merging its Australian 3G unit into a 50-50 joint venture with Vodafone. 3’s total customer base increased 25 percent over the period, standing at over 25.3 million. Of those, over 3.8 million are mobile broadband customers, a 170 percent increase from the same period last year. ARPU at the group declined 11 percent to EUR29.87 compared to full-year 2008. Yesterday, Hutchison Telecommunications International, an emerging markets operator majority-owned by Hutchison Whampoa, announced to sell its 51 percent stake in Israeli operator Partner to local handset distributor Scailex for US$1.38 billion.


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