SmarTone rings up HK$321m

PUBLISHED : Thursday, 24 February, 2011, 12:00am
UPDATED : Thursday, 24 February, 2011, 12:00am

SmarTone Telecommunications Holdings, which runs mobile-phone networks in Hong Kong and Macau, plans to rapidly add capacity while upgrading its infrastructure and anticipates steady growth this year.

The operator, a subsidiary of Sun Hung Kai Properties, yesterday reported a more than twofold increase in net profit for the six months to December to HK$321 million from HK$111 million a year earlier, as more subscribers signed up and monthly average revenue per user (arpu) rose.

'We saw accelerating margin expansion,' SmarTone chief executive Douglas Li said, adding that all the company's business lines grew during the period.

Li said interim net profit was greater than the full-year result in its financial year to June, when SmarTone's net profit surged to HK$294 million from HK$42 million the previous financial year. Revenue rose 52 per cent to HK$2.76 billion from HK$1.81 billion.

Earnings before interest, taxes, depreciation and amortisation - a key indicator of profitability tracked by investors and market analysts - grew 78 per cent to HK$921 million from HK$517 million. Total subscribers climbed 17 per cent to 1.44 million from 1.23 million a year earlier.

'Despite recently increasing our estimates for SmarTone that factored in bullish expectations, momentum is even better than we envisaged,' analyst Lisa Soh said in a Macquarie Equities Research report. 'This is a very strong result and lends credibility to the data growth story we believe is being played out in the Hong Kong market.'

Li said arpu increased 12 per cent to HK$241, 'driven principally by data services'. He said data revenue from subscribers with smartphones, fixed wireless services and mobile broadband, including media tablets, made up 46 per cent of total revenue.

Capital spending this year is expected to be from HK$650 million to HK$700 million.

Digital age

Data revenue from smartphones, fixed wireless services and mobile broadband drives SmarTone's earnings

The monthly average revenue per user rose 12 per cent to, in HK dollars: $241