Hutchison Telecom hit with 26pc fall in interim profit

Hutchison Telecommunications Hong Kong, the city’s second-largest wireless network operator, has seen its hopes of solid first-half earnings dashed by weaker-than-expected mobile sales.

The subsidiary of Li Ka-shing’s CK Hutchison Holdings posted a 26 per cent decline in interim net profit to HK$376 million on Tuesday, down from HK$407 million in the same period last year.

It blamed the result on a lack of popular smartphones to sell, and the continued decline in roaming revenue, according to a filing with the Hong Kong stock exchange.

Total revenue in the first six months fell 52 per cent to HK$5.32 billion from HK$11.02 billion a year earlier.

Nomura noted the company’s management had placed “a fair bit of focus on profitability in the mobile segment” during the period, since the business contributed more than 50 per cent to total service revenue.

In a filing with the Hong Kong stock exchange, Hutchison Telecom reported mobile revenue in the first half dropped 62 per cent to HK$3.47 billion, down from HK$9.24 billion in the same period last year. Net mobile customer service revenue also slipped 6 per cent to HK$1.97 billion, from HK$2.09 billion the previous year, mainly due to the decline in roaming revenue.

Earlier in the year, Hutchison Telecom management had been hopeful that increased mobile data consumption would help boost revenue this year.