Hutchison Telecom 2017 profit surges sevenfold on fixed-line disposal gain

Hutchison Telecommunications Hong Kong Holdings, a unit of tycoon Li Ka-shing’s CK Hutchison Holdings, on Monday posted a sevenfold surge in net profit to HK$4.766 billion (US$609.14 billion) for 2017, thanks to a gain from the sale of its fixed-line business.

The operator of Hong Kong’s second-largest mobile network will continue to invest in preparations for the 5G (fifth generation) services this year, according to its chief executive Cliff Woo Chiu-man.

“We’ve been doing preliminary preparations for 5G network. Once the Hong Kong government rolls out operation details, we will decide our development strategy,” Woo said.

Last July, Hutchison Telecom sold its fixed-line telecoms assets to I Squared Capital for HK$14.5 billion in cash, cementing its focus on its mobile communications business. The disposal garnered a one-off gain of HK$5.614 billion and helped boost the company’s net cash to HK$9.8 billion by December 2017.

“We are in a cash rich position for expansion opportunities and 5G investment,” Woo said.

But by excluding one-off items, Hutchison Telecom’s full-year profit dropped 20 per cent on year to HK$534 million, compared with HK$682 million in 2016. The items also included a one-off after tax and non-controlling interests accelerated depreciation charges of HK$1.39 billion for certain 2G and 3G mobile telecommunications fixed assets in Hong Kong and Macau.

“This [the drop] was because we only had a nine-month contribution from the fixed-line business in 2017, compared with a full-year [contribution] in 2016,” said Suzanne Cheng Wai-sin, chief financial officer for the company.