By Mark Lee, Bloomberg
Hong Kong: Hutchison Telecommunications International Ltd, a mobile-phone operator controlled by billionaire Li Ka-shing, reported its first annual profit since listing in 2004 as sales rose in India and Israel.
Net income last year was HK$201 million (Rs112 crore), or 4 HK cents per share, compared with a loss of HK$768 million, or 17 HK cents per share, in 2005, the company said today on its Web site. Sales rose 37% to HK$33.38 billion. Hutchison Telecom was expected to report profit of HK$525.6 million, according to the average of nine estimates compiled by Bloomberg.
Hutchison Telecom’s $11.1 billion sale of its stake in Hutchison Essar last month will raise funds for expansion elsewhere in Asia even as the Hong Kong-based company loses its most profitable unit. The wireless carrier started operating in Vietnam in January, and next month will begin services in Indonesia, two of Asia’s fastest-growing economies.
“There may be higher start-up losses in Vietnam and Indonesia, set against higher earnings from India and Israel,” Tucker Grinnan, head of regional telecommunications research at HSBC Holdings Plc, said before the earnings announcement. “Hutchison Telecom’s earnings will be volatile as the start-up operations will not be expected to break-even for at least a couple of years.”
Hutchison Telecom said it expects to complete the sale of its 67% stake in Hutchison Essar Ltd to Vodafone in the second quarter. Hutchison Telecom gained 12.7 million users in 2006 for a total of 29.6 million at the end of the year, driven mainly by Hutchison Essar, which added 11.9 million subscribers to bring its year-end total to 23.3 million.
HT Mobile, Hutchison Telecom’s Vietnam unit, said it started services on 15 January. PT Hutchison CP Telecommunications, an Indonesian mobile operator in which Hutchison Telecom owns 60%, will start service at the end of this month.