Hutchison Telecom Announces 2008 Full Year Results

March 4, 2009
    HONG KONG, March 4 /PRNewswire-Asia-FirstCall/ --

    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

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
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
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

    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.

    -- 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

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

    -- 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

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.

    -- 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
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.


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          --          --


    (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


    (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


    (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%


    (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

SOURCE Hutchison Telecommunications International Limited

Source: newswire

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