Earnings reports
image

Hong Kong company reporting season

HKT unveils Hong Kong’s fastest 4G service as interim earnings rise

Operator is building a 5G-ready infrastructure with roll-out of new mobile base stations and 1-gigabit per second 4G service

PUBLISHED : Wednesday, 09 August, 2017, 8:49pm
UPDATED : Wednesday, 09 August, 2017, 10:59pm

HKT Trust and its operating arm HKT, the largest telecommunications network operator in Hong Kong, reported a modest gain in first-half earnings amid stiff market competition and the subdued local economy.

In addition, senior management announced at a press briefing on Wednesday that HKT has ramped up its preparations for the 5G era by rolling out a new 1-gigabit per second service, representing the fastest 4G mobile network in the city.

Alex Arena, group managing director at HKT, said the results showed “the strength and resilience of our whole team” in the face of intense competitive headwinds in both the mobile and fixed-line broadband markets.

HKT posted a 3 per cent increase in interim net profit to US$306 million, up from US$297 million in the same period last year, largely on the back of an 11 per cent year-on-year decrease in operating expenses and recurring cost synergies from the integration of the former CSL New World Mobility.

The telecommunications subsidiary of tycoon Richard Li Tzar-kai’s PCCW group, HKT completed its US$2.4 billion takeover of larger mobile rival CSL in May 2014.

HKT unleashes more ultra-fast fibre-optic connections for Hong Kong households

Earnings before interest, tax, depreciation and amortisation – representing net cash flows from the company’s businesses – advanced 2 per cent to US$765 million in the six months ended June 30 from US$752 million a year ago.

Total revenue declined 5 per cent to about US$2 billion, compared with US$2.1 billion a year earlier, due to the absence of “marquee” smartphones to sell in the first half, according to HKT group chief financial officer Susanna Hui hon-hing.

That missed the market consensus of 5 per cent year-on-year growth to HK$17.2 billion (US$2.2 billion) from a Bloomberg survey of analysts’ estimates.

Adjusted funds flow, which is the measure by which the cash distribution of HKT’s shareholders is based, rose 4 per cent in the first half to US$273 million from US$263 million the previous year.

HKT also reported that its combined wholesale, business and consumer fixed-line broadband access lines totalled 1.57 million as of June 30, up from 1.56 million at the end of December.

HKT’s total mobile post-paid subscribers grew 2 per cent year-on-year to 3.2 million at the end of June. The company said its prepaid customer numbers have declined, as it cut its focus on certain low-margin prepaid segments.

Hui said HKT’s interim mobile results “outpaced all competitors”, despite no popular smartphone. She said anticipation was high for Apple’s 10th anniversary iPhone, which will be released in the second half of this year.

Arena said HKT is “building a 5G-ready” infrastructure”, with new, easy-to-upgrade base stations and 1Gbps 4G service at “selected high-traffic locations”. Future 5G networks will offer 20Gbps peak data download rates for each cell site.