Hutchison sees 2016 revenues dip

Hutchison sees 2016 revenues dip

But EBITDA takes a 12.2 per cent increase

Hutchison Telecommunications Australia (ASX:HTA), the company which has a 50 per cent stake in Vodafone Hutchison Australia (VHA), has revealed its 2016 financial results, for the full year period ending 31 December 2016.

In a statement on the ASX, the company recorded a dip in revenues – its total revenue amounted to $1.67 billion, a decline of 8.4 per cent from the $1.82 billion it recorded the same time last year.

Its gross service revenue was $1.41 billion, down 9.9 per cent from the $1.57 billion it brought in the previous corresponding period, and its net service revenue totaled to $1.18 billion, down 14.1 per cent from $1.37 billion from last year.

However, the company’s earnings before interest, tax, depreciation and amortisation (EBITDA) was recorded at $456.1 million, an increase of 12.2 per cent from $406.4 million in 2015.

As a result, HTA reported a $63.5 million loss for the year, as compared to a loss of $182.9 million in the prior year. In addition, the share of net loss of VHA improved 63.7 per cent from $187.5 million last year to $68 million in 2016.

The year marks the first VHA has been cash flow positive since 2010.

The financial and operating metrics listed represent the 50 per cent share of VHA.

Hutchison Telecommunications Australia chairman, Fok Kin Ning, said in 2016, VHA achieved “continuity of growth”, despite competition for mobile customers intensifying in the Australian telecommunications sector.

He added that this was in both in terms of the products on offer and on the public policy and regulatory front.

“With strong support from HTAL and its joint shareholder, Vodafone Group, VHA has continued to achieve solid growth through its strategic focus on a strong network, products, and customer service,” he said.

In terms of its customer base, VHA added 125,000 customers in 2016. Its total network customers was up 2.3 per cent to 5.56 million, which the company attributes to the 3.2 per cent lift in postpaid customers and 21.4 per cent growth in Mobile Virtual Network Operator customers.

Its prepaid handset revenues also grew year-on-year, despite what the company called a “slight decline” in the prepaid customer base.

This also includes the company’s acquisition of Lebara’s Australian mobile business assets, which Kin Ning said will “grow this business further”.

VHA also highlighted its commitment to expand and upgrade its network. 2016 saw the company adding 111 new sites and performing more than 2,200 upgrades across the country. Its network expansion plan includes more than 100 new sites to be built in regional areas by the end of this year, through VHA investment and the Australian Government’s Mobile Black Spot program.

VHA is also continuing preparations for the launch of 5G, in collaboration with two of its technology partners.

Some of its other aspirations for 2017 include launching fixed broadband services via the NBN, focusing its attention to tis enterprise customer base, a five-year program to virtualise its core and IP networks, the delivery of a voice-over Wi-Fi product, and bringing increased competition and choice to regional Australia.

This is in light of Australian Competition and Consumer Commission (ACCC) giving telecommunications providers, consumers and lobby groups, a month to state their case for or against domestic mobile roaming, with VHA saying that it is “Australia’s greatest opportunity” for choice.

“VHA is well-positioned to continue its growth in 2017. The strength of the VHA business is based on its network, customer propositions, and customer service delivery, and it will continue to build on the momentum in these areas of recent years,” Kin Ning added.

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Tags ASXVodafone Hutchinson Australia (VHA)Hutchison Telecommunications Australia


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