India and Israel units help HTIL post profit
Hutchison Telecom earns HK$2m as subscribers surge in the two markets
Hutchison Telecommunications International Ltd (HTIL), the emerging-market telecommunications arm of Hutchison Whampoa, turned a first-half profit as earnings from its India and Israel units offset losses elsewhere.
HTIL reported net profit of HK$2 million for the six months to June, compared with a restated HK$370 million loss a year earlier that included one-time charges totalling HK$474 million.
Sales increased 48 per cent to HK$15.66 billion from HK$10.59 billion.
HTIL shares yesterday closed 2.6 per cent higher at HK$13.42 after the announcement.
The Hong Kong-based company is boosting revenue in India and elsewhere amid limited growth in a saturated domestic market.
Subscribers at Indian mobile flagship Hutchison Essar doubled to 17.5 million after the company integrated operations with the three newly bought licensed regions.
The unit, which operates in 16 of the country's 23 licensed areas, reported a 46.7 per cent increase in earnings before interest, taxes, depreciation and amortisation to HK$2.32 billion.
'Overall, the result was better than expected. HTIL is one of the only two GSM (global system for mobile communications) operators in India and it is well managed,' CLSA analyst Francis Cheung said.
The country, with a 1.1 billion population, has a mobile penetration rate still below 10 per cent.
HTIL, which owns 67 per cent of Hutchison Essar, yesterday said recent legal proceedings against Indian partner Essar Group, which holds 33 per cent, could delay plans to list the unit until next year.
'It's not surprising that the [delayed closing] of the BPL Mumbai acquisition would delay our plans for listing Hutchison Essar,' HTIL chief executive Dennis Lui Pok-man said. 'We would be quite time-pressed to launch an IPO this year.'
The unit is valued by some analysts at US$8.8 billion.
Earlier this month, Essar Group ended an agreement to sell its BPL Mumbai to Hutchison Essar, which had paid HK$2.7 billion for the operation and its 1.3 million subscribers. Essar cited lack of regulatory approval for killing the deal. Mr Lui yesterday said approval had been given by India's Department of Telecommunications.
HTIL's majority-owned Israeli mobile subsidiary, Partner Communications, contributed operating profit of HK$779 million after subscriber numbers grew 7.3 per cent to 2.59 million. Revenue rose 5 per cent to contribute sales of HK$4.6 billion to the group.
The Hong Kong and Macau mobile operations turned an operating profit of HK$200 million, the first since the group launched third-generation services in Hong Kong in 2004. The operations still make a net loss on financing costs. On average, HTIL's Hong Kong users spent HK$152 on their mobile bills every month, HK$2 less than a year ago.
India contributed 45 per cent of the group's revenue, Israel 29 per cent and Hong Kong 20 per cent.
For the remaining four months, chief financial officer Tim Pennington said the group would spend up to HK$10.5 billion in India and introduce networks in Indonesia and Vietnam this year.