Hutchison Whampoa said its 3 Group Europe business maintained “good growth momentum” during the first half of 2012, despite deteriorating economic conditions.

However, it is seeing continued weakness at its Vodafone Hutchison Australia (VHA) joint venture, where “challenging market conditions and continuing poor public perception…led to a continuing deterioration in the operating and financial performance”.

For 3 Group Europe, the company reported EBIT of HK$1.37 billion (US$177 million), up 51 percent from HK$909 million, on revenue of HK$27.99 billion, down 0.3 percent from HK$28.07 billion.

It said that in local currencies, 3 Group Europe revenue grew by 6 percent, due to the improved mix of higher value contract customers, and its growing market share in the smartphone segment. It said that with “stringent cost control”, EBIT grew by 66 percent in local currencies.

At the end of June 2012, 3 Group had 22.23 million customers, up from 20.45 million in June 2011.

Capital expenditure increased to HK$5.45 billion, compared with HK$3.77 billion, with the company noting a network capacity and enhancement project at 3 Italy.

Looking forward, Hutchison said that benefits from further termination rate cuts in the UK and Italy, as well the reduction of handset subsidies, are expected to “favourably impact profitability” in the second half of the year.

Hutchison’s share of Vodafone Hutchison Australia was a loss before interest and taxes of HK$567 million for the period, compared with a prior-year loss of HK$142 million, on revenue of HK$7.65 billion, down 12 percent from HK$8.69 billion.

Year-on-year, VHA has seen a 3 percent decline in its customer base to around 6.8 million, including those connecting via MVNO partners.

Hutchison said that although the VHA management team is “committed to achieving improvements,” an increased loss is expected for the rest of the year.

For its other communications-related business, at Hutchison Telecommunications Hong Kong (operating in Hong Kong and Macau), it reported EBIT of HK$807 million, up 18 percent from HK$685 million, on revenue of HK$6.73 billion, up 12 percent from HK$6.02 billion.

This unit has an active mobile customer base of more than 3.6 million, and in May 2012 launched LTE services in Hong Kong.

And for its Hutchison Asia Telecommunications unit, it reported a LBIT of HK$675 million, narrowed from a prior year loss of HK$1.01 billion, on revenue of HK$1.63 billion, up 55 percent from HK$1.05 billion.

This business has a registered mobile customer base of more than 37 million, with operations in Indonesia, Vietnam and Sri Lanka. Its expansion focus is on Indonesia and Sri Lanka.