Hutchison Telecom Confirms Spin-Off Plans for Hong Kong Holdings
Published on: 3rd Mar 2009
Note -- this news article is more than a year old.
Hong Kong based Hutchison Telecom has reported a 16% rise in full year revenues to HK$24 billion (USD3.1 billion) and an increase of 16.8% in EBITDA to HK$6.14 billion (USD791 million). Net income dropped precipitously to HK$1.88 billion (USD242 million) from the extraordinary HK66.8 billion a year ago which was largely due to the one off gain from the sale of its Indian interests to Vodafone.
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. 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.
Several one-off transactions occurred in 2008 taking operating profit to HK$4.1 billion compared to an operating loss of HK$2.8 billion 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$2.1 billion, reflecting the significant improvement of operating profit from Israeli, Hong Kong and Thailand operations which offset increased losses from Indonesia and Sri Lanka.
Looking ahead, 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."
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.
The company also confirmed that it will be spinning off its Hong Kong holding company, HTHKH - which includes the landline and mobile operations in both Hong Kong and Macau. The company said in a statement that it believes that the Distribution and the Listing will unlock the value of HTHKH, a cash-generating asset of the Company and be beneficial to the Company and its shareholders as a whole.
Dennis Lui, Chief Executive Officer of Hutchison Telecom said: "We believe that the Distribution and the Listing will benefit Hutchison Telecom, HTHKH and all our shareholders. Our Hong Kong and Macau operations have been generating solid cash flow and profitability to the Group, yet their contribution and value are unrecognised. From this initiative the individual values of HTHKH and Hutchison Telecom with its remaining operations will be better recognised and reflected by their respective public market valuations. Further, the Distribution enables our shareholders to participate in the ownership of, and enjoy the returns from, two listed telecom stocks of distinctively different strategy and growth path."