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Hutchison Telecom Announces 2008 Full Year Results
HONG KONG, March 4 /PRNewswire/ --
Key Highlights of 2008 Full Year Results:
-- Group mobile customer base grew approximately 28% to over 12 million
-- Turnover increased over 16% to approximately HK$24 billion
-- EBITDA rose approximately 17% to over HK$6.1 billion
-- Operating profit turned positive to approximately HK$4.1 billion
-- Indonesian operation surpassed all operational targets
-- Vietnamese operation to launch GSM during March 2009
Financial Results Highlights:
2007 2008 Change
HK$ HK$ %
million million
Turnover 20,401 23,725 +16.3%
Operating profit / (loss) (2,819) 4,060 --
Profit for the year 67,776 2,919 --
Profit attributable to equity holders of the
Company 66,884 1,883 --
Basic earnings per share attributable to
equity holders of the Company HK$14.01 HK$0.39 --
Hutchison Telecommunications International Limited ('Hutchison Telecom';
'the Group'; 'the Company'; HKEx: 2332; NYSE: HTX) today announced the
financial results for the full year ended 2008 and quarterly key performance
indicators for the fourth quarter of 2008. Driven by the strong growth in
total customer base and increased revenue contributions from established
operations in Hong Kong and Israel, the Group reported an increase of over
16% in total turnover to approximately HK$24 billion and an increase of 16.8%
in earnings before interest, tax, depreciation and amortisation ('EBITDA') to
HK$6,138 million. EBITDA margin for the full year 2008 trended up slightly to
25.9% while operating profit, on a like-for-like basis and after excluding
several one-off items recorded in 2008, jumped 29.1% to HK$2,092 million
reflecting the continued improvement in the fundamentals for profitable
growth.
Excluding Vietnam and Ghana, the Group registered approximately 28%
yearly growth in its total customer base in 2008, driven mainly by strong
customer acquisition in Indonesia and the continued expansion of its 3G
customer bases in Hong Kong and Israel. These, together with the sustained
revenue contribution from Hong Kong's fixed-line operation, led to a 16.3%
growth to HK$24 billion in the Group's total turnover. Although the Group
reported increased expenses incurred from network expansion in Indonesia and
GSM rollout in Vietnam in 2008, the strong revenue growth as a whole diluted
the impact bringing a 16.8% yearly increase to EBITDA. In terms of
profitability, the Group's EBITDA margin was 25.9% mainly reflecting the
impact of the suspension of revenue contribution from the Vietnamese
operation since March 2008 due to the new GSM network rollout.
Several one-off transactions occurred in 2008 taking operating profit to
HK$4,060 million compared to an operating loss of HK$2,819 million in 2007.
These one-off transactions included tower sale in Indonesia* and the disposal
of its indirect interest in Ghana. Excluding these the Group's operating
profit rose 29.1% to HK$2,092 million, reflecting the significant improvement
of operating profit from Israeli, Hong Kong and Thailand operations which
offset increased losses from Indonesia and Sri Lanka.
Profit for the year was HK$2,919 million and profit attributable to
equity holders of the Company was HK$1,883 million. The related figures for
2007 included the sale of the Company's indirect interest in CGP Investments
(Holdings) Limited.
Dennis Lui, Chief Executive Officer of Hutchison Telecom said: 'We are
pleased to have delivered a set of satisfying results in a year full of
challenges. Particularly our Indonesian operation achieved encouraging
customer growth and improved operational performance amidst intense market
competition. We expect to see this positive trend sustained in 2009 as our
network expansion continues. Our Vietnamese operation is set to launch a
nationwide GSM service this month with a network covering all major cities in
Vietnam. Together these two markets will be the key impetus for growth for
Hutchison Telecom."
"The impact of the global economic uncertainty is yet to be fully seen in
telecommunications industry. We continue to be watchful of the potential
challenges. Our operation in Israel embarked on a series of cost-management
initiatives last year to enable it to maintain its operating efficiency. We
will apply this approach across all operations to support profitable growth."
said Mr Lui.
Chris Foll, Chief Financial Officer of Hutchison Telecom said: "Excluding
Hong Kong and Macau operations, we will invest approximately HK$7 billion in
2009 with the majority going into the Indonesian and Vietnamese operations."
Review of operations
Hong Kong and Macau
The combined turnover from the Group's fixed-line and mobile businesses
in Hong Kong and Macau was HK$8,069 million, an increase of 11.9% compared to
2007. EBITDA was also up 10.7% at HK$2,742 million in 2008 with an EBITDA
margin of 34.0%.
Hong Kong and Macau mobile
-- Blended customer base increased 11.3% yearly to over 2.7 million
-- 3G customer base grew 24.2% yearly to 1,340,000
-- Turnover and EBITDA increased 12.6% and 11.8% respectively
The Group's mobile operations in Hong Kong and Macau delivered a healthy
performance in 2008 despite intense market competition. The Hong Kong
operation is the largest 3G service provider in Hong Kong in terms of
customer numbers. From this solid base and the first-mover sale of iPhone 3G
in Hong Kong and Macau since the third quarter in 2008 both operations were
able to stimulate the adoption of mobile data usage. On a yearly basis the
non-voice portion of mobile communications service revenue grew 34%,
signalling an encouraging trend for profitability growth.
Turnover increased 12.6% yearly to HK$5,376 million driven mainly by the
customer growth. EBITDA for the year was HK$1,757 million, an increase of
11.8% compared to HK$1,572 million in 2007. The EBITDA margin was comparable
to last year at 32.7%, a result of the operations' continued focus on
operational cost control. Operating profit for the year fell slightly to
HK$432 million compared to HK$447 million in 2007, mainly due to the
amortisation on capitalised customer acquisition and retention costs in the
year.
Hong Kong fixed-line
-- Turnover increased 10.6% yearly to HK$2,693 million
-- EBITDA grew 9% yearly to HK$985 million and EBITDA margin was 36.6%
Utilising its territory-wide fibre-to-the-building network, the Group's
Hong Kong fixed-line operation Hutchison Global Communications Limited
('HGC') was able to maintain healthy and profitable growth in its core
business segments including the international and carrier markets as well as
corporate and business markets. The international and carrier markets grew
year-on-year by 24.8%, fueled by the growth in demand for data and IDD
services. Leveraging its strong foothold in the data and internet businesses
for banking, finance and public sectors HGC also recorded good revenue growth
in the corporate and business segments with 11.3% yearly increase.
On top of the healthy top-line growth HGC delivered an impressive
increase in operating profit of 37.2% year-on-year to HK$332 million, largely
reflecting the growth in turnover and a slight decrease in depreciation and
amortisation charges compared to last year.
Israel
-- A record year in terms of financial and operational results with
EBITDA, cash flow and net profit grew by double digits
-- Total customer base rose to 2,898,000 with 3G base enlarged to
approximately 1 million
-- Diversification of business portfolio in order to establish the
foundation for future revenue stream and strengthen market leadership
-- Turnover growth of 18.6% assisted by favourable foreign exchange
movement
2008 was another profitable year for Partner Communications Company Ltd.
('Partner'). During the year Partner continued to attract high value
customers with approximately 84% of its annual net new subscribers coming
from the business sector. At the same time with its strong 3G focus Partner
was able to expand its 3G customer base by 50.2% to 951,000. These together
with management's continued focus on operational efficiency generated record
financial results.
During the year Partner embarked on new strategic direction by extending
into non-cellular connectivity businesses such as fixed-line services through
voice over broadband technology for the business segment, home Wi-Fi networks
and multimedia content. These are to ensure Partner stays in the forefront of
cross-platform telecommunications businesses.
Turnover growth benefited from the favourable currency exchange and
registered a 18.6% growth to HK$13,813 million. EBITDA increased 30.0% to
HK$4,895 million compared to HK$3,765 million in 2007 and the margin improved
significantly to 35.4% from 32.3% in 2007, mainly due to the increase in 3G
revenue growth and profitability. Excluding the mobile telecommunications
product business such as handsets and accessories the underlying EBITDA
margin from mobile telecommunications services was even higher at 39.4%.
Operating profit increased 35.6% to HK$2,980 million compared to HK$2,197
million in 2007.
Indonesia
-- Customer base more than doubled to 4,501,000
-- Accelerated network expansion with over 6,300 base stations on-air
The Group's Indonesian operation PT. Hutchison CP Telecommunications
('HCPT') continued to report good progress in its second year of operation
despite a very challenging environment. Total customer base grew over 120%
yearly on the back of accelerated network expansion across the country,
strong branding and an effective distribution system. HCPT ended the year
2008 with more than 6,300 base stations on-air covering over 67% of the total
population and all major cities in the country. It expects to increase the
size of its networks to over 9,000 base stations by the end of 2009. HCPT is
looking to maintain strong customer acquisition in 2009 in line with its
expanded coverage.
HCPT's turnover for the year increased 169.2% to HK$315 million on the
back of customer growth. However, as HCPT is still in the early stage of
establishing its footprint and further network expansion and increased
marketing activities are required to establish a critical mass of customers,
its loss before interest, taxation, depreciation and amortisation ('LBITDA')
for 2008 increased to HK$1,003 million from HK$475 million in 2007.
Nevertheless 2008 was a successful year for HCPT, as it seeks to become a
leading GSM operator in Indonesia. Particularly in the last quarter where
there was encouraging improvement in profitability. Through a series of
revenue improvement initiatives implemented in the beginning of the second
half, HCPT's prepaid average revenue per user ('ARPU') went up 22.2% to
IDR11,000 from the last quarter. Together with stablised minutes of use
('MOU') the average revenue per minute ('ARPM') was lifted to IDR200 compared
to IDR177 in the third quarter. Although prepaid churn appeared to have
increased to 24.3% this was mainly due to an one-off exercise at the year end
that identified and reduced inactive customers. HCPT expects to see churn
revert to levels experienced in earlier quarters.
Sri Lanka
-- Customer base stood at 887,000
-- Turnover was HK$160 million
2008 posed severe challenges to Hutchison Telecommunications Lanka
(Private) Limited ("HTLL"). Political instability, intensified market
competition and new government policy regarding prepaid customer registration
contributed to the negative growth in 2008. HTLL had during the year
tightened its policy on the recognition of prepaid customers to align with
government's new policy which resulted in a write-down of the customer base
229,000 in the third quarter. EBITDA decreased to HK$37 million in 2008
mainly due to the increase in regulatory charges and higher network costs.
Thailand
-- Customer base was up to 1.1 million
-- Turnover increased 22.5% to HK$1,192 million
-- Restored EBITDA to HK$81 million
The Group is in continued discussions with its partner in Thailand on the
future for its regional CDMA operation in Thailand. Meanwhile the business
focussed on operating in a self-sustaining financial mode, achieving customer
growth to 1.1 million by the end of 2008. Turnover increased to HK$1,192
million from HK$973 million in 2007 and EBITDA to HK$81 million from a LBITDA
of HK$14 million in 2007. Operating profit was HK$80 million in 2008 compared
to operating loss of HK$4,462 million in the year before when an impairment
charge of HK$3,854 million on non-current assets was taken.
Outlook
In 2008, the Group reported encouraging results with substantial growth
in its established businesses and good progress in network rollout in its
emerging market operations. It achieved strong growth in EBITDA and operating
profits in Hong Kong and Israel with a total 3G customer base over 2.3
million today, a network with over 67% population coverage in Indonesia and
more than 4.5 million customers, and significant progress made in preparation
for the launch of its new GSM service in Vietnam in the first quarter 2009.
Looking ahead in 2009, Hutchison Telecom expects that the businesses will
continue to perform well, subject to the uncertainties of the global economy.
The Group's Hong Kong and Israeli operations will continue to strengthen
their leadership in the 3G segment. The successful bid by the Group's Hong
Kong mobile operation in conjunction with Hong Kong Telecommunications (HKT)
Limited for Broadband Wireless Access radio spectrum in Hong Kong will allow
new and enhanced content and services to be made available to its customers
in the future. Hutchison Telecom also expects to see further synergies
generated through fixed-mobile convergence initiatives between its Hong Kong
fixed-line and mobile business in the coming years.
The Group will continue to invest in the Indonesia and Vietnam markets in
2009 and target to increase the size of networks in Indonesia to around 9,000
base stations by the end of the year and 5,000 base stations in Vietnam
within the first 12 months of the launch. As the Group's Indonesian network
footprint expands, it expects to see continued and strong growth in existing
service areas in Java and Sumatra and expanded market share in new areas in
Kalimantan and Sulawesi.
In view of the above development, Hutchison Telecom anticipates the
Group's capital expenditure in 2009, excluding Hong Kong and Macau operations
to be approximately HK$7 billion the majority of which is earmarked for
Indonesia and Vietnam.
* As part of its periodic review of company filing, the U.S. SEC has
raised some comments on the accounting treatment of HCPT's sale and
leaseback transactions for base station towers in 2008. The Company
cannot predict the outcome of this review and it is possible that an
adjustment to the Company's accounts may be required to account for the
transactions as a finance lease. Further details are in the Company's
2008 results announcement published today.
About Hutchison Telecommunications International Limited
Hutchison Telecommunications International Limited ('Hutchison Telecom'
or 'the Group') is a leading global provider of telecommunications services.
The Group currently offers mobile and fixed-line telecommunication services
in Hong Kong and Israel, and operates mobile telecommunications services in
Macau, Indonesia, Vietnam, Sri Lanka and Thailand. It was the first provider
of 3G mobile services in Hong Kong and Israel and operates brands including
"Hutch", "3" and "Orange".
Hutchison Telecom is a listed company with American Depositary Shares
quoted on the New York Stock Exchange under the ticker HTX and shares listed
on the Stock Exchange of Hong Kong under the stock code 2332. A subsidiary of
the Hong Kong-based Hutchison Whampoa Group, Hutchison Telecom is dedicated
to providing superior telecommunications services in dynamic markets. For
more information about Hutchison Telecom, see http://www.htil.com .
Cautionary Statements
This press release contains forward-looking statements. Statements that
are not historical facts, including statements about the beliefs and
expectations of Hutchison Telecommunications International Limited ('the
Company'), are forward-looking statements. These statements are based on
current plans, estimates and projections, and therefore you should not place
undue reliance on them. Forward-looking statements speak only as of the date
they are made, and the Company undertakes no obligation to update publicly
any of them in light of new information or future events. Forward-looking
statements involve inherent risks, uncertainties and assumptions. The Company
cautions you that if these risks or uncertainties ever materialise or the
assumptions prove incorrect, or if a number of important factors occur or do
not occur, the Company's actual results may differ materially from those
expressed or implied in any forward-looking statement. Additional information
as to factors that may cause actual results to differ materially from the
Company's forward-looking statements can be found in the Company's filings
with the United States Securities and Exchange Commission.
-- Tables to Follow --
Unaudited Key Performance Indicators for Fourth Quarter 2008
Customer Base Q4 2008 Q3 2008
31 December 2008 30 September 2008
Total Postpaid Prepaid Total Postpaid Prepaid
Market ('000) ('000) ('000) ('000) ('000) ('000)
Hong Kong (incl
Macau) 2,702 1,792 910 2,657 1,766 891
Indonesia 4,501 11 4,490 3,604 9 3,595
Israel 2,898 2,153 745 2,882 2,145 737
Sri Lanka 887 -- 887 958 -- 958
Thailand 1,070 413 657 1,094 420 674
Total 12,058 -- -- 11,195 -- --
Customer Base (Continued) Q2 2008 Q1 2008
30 June 2008 31 March 2008
Total Postpaid Prepaid Total Postpaid Prepaid
Market ('000) ('000) ('000) ('000) ('000) ('000)
Hong Kong (incl
Macau) 2,595 1,720 875 2,515 1,698 817
Indonesia 3,203 7 3,196 2,331 4 2,327
Israel 2,856 2,135 721 2,823 2,108 715
Sri Lanka 1,291 -- 1,291 1,289 -- 1,289
Thailand 1,117 418 699 1,071 405 666
Total 11,062 -- -- 10,029 -- --
Customer Base (Continued) Q4 2007
31 December 2007
Total Postpaid Prepaid
Market ('000) ('000) ('000)
Hong Kong (incl Macau) 2,427 1,671 756
Indonesia 2,039 3 2,036
Israel 2,860 2,068 792
Sri Lanka 1,141 -- 1,141
Thailand 978 372 606
Total 9,445 -- --
Notes:
(1) A customer is defined as a Postpaid Customer or a Prepaid Customer
who has a Subscriber Identity Module (SIM) or Universal Subscriber
Identity Module (USIM) that has access to the network for any
purpose, including voice, data or video services.
(2) Postpaid Customers are defined as those whose mobile
telecommunications service usage is paid in arrears upon receipt of
the mobile telecommunications operator's invoice and who have not
been temporarily or permanently suspended from service.
(3) Prepaid Customers are defined as customers with prepaid SIM cards or
prepaid USIM cards that have been activated but not been used up or
expired at period end. A new prepaid customer is recognised upon
making the first call or registration/activation.
(4) All numbers quoted on the basis of the total customer base of the
operation irrespective of the Company's ownership percentage.
(5) All numbers quoted as at last day of the quarter.
(6) The data for Hong Kong and Israel relate to both 2G and 3G services.
(7) The data for Ghana and Vietnam are excluded.
ARPU (1) Q4 2008 Q3 2008
31 December 2008 30 September 2008
Market Currency Blended Postpaid Prepaid Blended Postpaid Prepaid
Hong Kong
(incl Macau) HKD 148 213 19 150 213 24
Indonesia IDR('000) 11 134 11 10 134 9
Israel NIS 158 -- -- 166 -- --
Sri Lanka LKR 164 -- 164 181 -- 181
Thailand THB 381 762 142 378 763 143
ARPU (1) (Continued) Q2 2008 Q1 2008
30 June 2008 31 March 2008
Market Currency Blended Postpaid Prepaid Blended Postpaid Prepaid
Hong Kong
(incl Macau) HKD 148 210 24 149 208 24
Indonesia IDR('000) 12 108 12 14 120 14
Israel NIS 158 -- -- 155 -- --
Sri Lanka LKR 163 -- 163 193 -- 193
Thailand THB 386 784 147 405 808 157
ARPU (1) (Continued) Q4 2007
31 December 2007
Market Currency Blended Postpaid Prepaid
Hong Kong
(incl Macau) HKD 161 218 28
Indonesia IDR('000) 15 114 15
Israel NIS 157 -- --
Sri Lanka LKR 242 -- 242
Thailand THB 417 813 165
Notes:
(1) The monthly Average Revenue Per User (ARPU) is calculated as the
total Service Revenues for the month divided by the simple average
number of activated customers for the month. The monthly ARPU for the
quarter represents the average of the monthly ARPU in the quarter.
(2) Service Revenues are defined as the direct recurring service revenues
plus roaming revenues.
(3) The data for Hong Kong and Israel relate to both 2G and 3G services.
(4) The data for Ghana and Vietnam are excluded.
MOU (1) Q4 2008 Q3 2008
31 December 2008 30 September 2008
Market Blended Postpaid Prepaid Blended Postpaid Prepaid
Hong Kong (incl Macau) 447 654 38 465 679 42
Indonesia 55 225 55 56 209 56
Israel 357 -- -- 376 -- --
Sri Lanka 74 -- 74 71 -- 71
Thailand 619 1,065 339 618 1,095 328
MOU (1) (Continued) Q2 2008 Q1 2008
30 June 2008 31 March 2008
Market Blended Postpaid Prepaid Blended Postpaid Prepaid
Hong Kong (incl Macau) 462 672 42 461 655 43
Indonesia 82 117 82 94 104 94
Israel 368 -- -- 359 -- --
Sri Lanka 54 -- 54 60 -- 60
Thailand 607 1,086 319 632 1,134 324
MOU (1) (Continued) Q4 2007
31 December 2007
Market Blended Postpaid Prepaid
Hong Kong (incl Macau) 491 680 49
Indonesia 83 59 83
Israel 345 -- --
Sri Lanka 69 -- 69
Thailand 643 1,110 347
Notes:
(1) The monthly Minutes of Use (MOU) is calculated as the total minutes
carried over the network (2G total airtime usage + 3G voice and video
usage, but excluding inbound on-net minutes) for the month divided by
the simple average number of activated customer. The monthly MOU for
the quarter represents the average of the monthly MOU in the quarter.
(2) The data for Hong Kong and Israel relate to both 2G and 3G services.
(3) The data for Ghana and Vietnam are excluded.
Churn (1) Q4 2008 Q3 2008
31 December 2008 30 September 2008
Market Blended Postpaid Prepaid Blended Postpaid Prepaid
Hong Kong (incl Macau) 4.8% 1.7% 10.0% 4.3% 1.6% 9.0%
Indonesia 24.2% 4.1% 24.3% 18.1% 5.3% 18.1%
Israel 1.5% -- -- 1.3% -- --
Sri Lanka 4.4% -- 4.4% 5.0% -- 5.0%
Thailand 5.4% 3.1% 6.8% 6.5% 3.0% 8.6%
Churn (1) (Continued) Q2 2008 Q1 2008
30 June 2008 31 March 2008
Market Blended Postpaid Prepaid Blended Postpaid Prepaid
Hong Kong (incl Macau) 4.0% 1.8% 8.0% 3.5% 1.8% 6.7%
Indonesia 15.6% 7.9% 15.6% 17.6% 11.0% 17.6%
Israel 1.3% -- -- 1.7% -- --
Sri Lanka 3.8% -- 3.8% 2.9% -- 2.9%
Thailand 6.0% 2.9% 7.8% 5.8% 2.7% 7.8%
Churn (1) (Continued) Q4 2007
31 December 2007
Market Blended Postpaid Prepaid
Hong Kong (incl Macau) 3.3% 1.8% 6.2%
Indonesia 17.7% 16.3% 17.7%
Israel 1.3% -- --
Sri Lanka 2.4% -- 2.4%
Thailand 5.2% 2.8% 6.8%
Notes:
(1) The monthly churn % is calculated as the average number of
disconnections (net of reconnection and internal migration between
networks) for the month divided by the simple average number of
activated customers for the month. The monthly churn % for the
quarter represents the average of the monthly churn rates in the
quarter.
(2) The data for Hong Kong and Israel relate to both 2G and 3G services.
(3) The data for Ghana and Vietnam are excluded.
The Board wishes to remind investors that the above key performance
indicators are based on the Group's unaudited internal records. Investors
are cautioned not to unduly rely on such data.
For enquiries, please contact:
Mickey Shiu
Corporate Communications / Investor Relations
Hutchison Telecom
Work: +852-2128-3107
Mobile: +852-9092-8233
E-mail: mickeyshiu@htil.com.hk
