Earnings: Hutchison 2006 Profit Grows 40 Percent On Lower 3G Losses

Hutchison Whampoa posted a net profit of HK$20.03 billion (US$2.56 billion) for 2006, up from HK$14.34 billion (US$1.8 billion) in 2005, reports Telecom Asia, an increase of 40 percent. This was helped by improvements in the company’s 3G carrier businesses around the world, which saw its loss before interest and tax fall to HK$20 billion (US$2.56 billion) from HK$36.28 billion (US$4.6 billion) in 2005. For 2006 the 3 Group saw total revenues increase 35 percent to HK$50.668 billion (US$6.49 billion). Hutchison said it has 14.7 million 3G subscribers globally (in the UK, Italy, Australia, Austria, Hong Kong and Sweden), an increase of 30 percent. It expects its 3G business to achieve sustainable break even status by 2008.
From the earnings report (PDF) there are some other pertinent figures:
–The average revenue per user on a trailing 12-month average active customer base for the group was 45.63 euros (US$60.71) for 2006, an 8 percent increase over 2005. About 79 percent of the customer base was active. 3 plans to increase promotional discounts on its plans to attract customers. In 2006 the amount of the discounts averaged less than 4 percent of ARPU, but the group expects that to increase this year.
–The portion of ARPU from non-voice services grew to 30 percent of ARPU, rising from 10.47 euros in 2005 to 13.70 euros (US$18.22) this year.
–Average monthly churn was 2.9 percent for 2006, although in the first half it was 3.2 percent and in the second half it was 2.6 percent, which shows a good trend.
–The 3 Group’s weighted average customer acquisition cost, on a 12-month trailing basis, continued to trend downwards from 293 euros in 2005 and 262 euros at 30 June to 250 euros (US$333) for 2006.
–Italy had over half the 3 Groups customers with 7.190 million (1.145 million 3G customers are with HTIL in Israel and Hong Kong rather than 3 Group).
3 Italia signed up over 400,000 customers to its DVB-H service last year.
–3’s operations in UK and Ireland had the highest ARPU of the group … 46.57 pounds/ HK$670/ US$86.

Earnings Report PDF

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