Hong Kong's Hutchison Whampoa expects 3G losses to narrow further this yr UPDATE |
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Thu, 22 Mar 2007 11:01
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HONG KONG (XFN-ASIA) - Hutchison Whampoa Ltd said it expects losses in its third-generation (3G) mobile services business to narrow further this year on the back of growth in subscribers and increased revenue.Hutchison's 3 Group recorded 20 bln hkd in loss before interest and taxes last year, narrowing from a 38.54 bln loss posted in 2005.Chairman Li Ka-shing told a media briefing following the company's 2006 results announcement that he is 'confident' that the 3G business will narrow its losses further this year.'I am confident in our 3G business and the growth of Hutchison this year.. I am also very satisfied with Hutchison's performance in the past,' Li said.He reiterated that Hutchison is on track to achieving positive earnings before interest and taxes (EBIT) for the 3G business by 2008.He added that the 3G business will be able to achieve positive monthly EBITDA (earnings before interest, taxes, depreciation and amortization) by the first half of this year after deducting customer acquisition costs.Li reiterated that Hutchison has no plans to sell its unit 3UK in the near term.Managing director Canning Fok added that 3UK achieved EBITDA break-even in the first two months of this year.Li, meanwhile, declined to give a timetable for a spin-off of the Italy and UK 3G units.Separately, the chairman said that Hutchison is 'unlikely' to sell or spin-off any port, hotel or retail assets. He added that he also has no plans to sell Canadian unit Husky Energy this year.'We never sell our assets to cover the 3G losses. Disposal of any assets will depend on the valuation of the asset and whether or not the offer is attractive,' Li told reporters.He noted that there is no point in selling Husky Energy as the company is doing well.Li said he does not expect oil prices to see a sharp decline this year.Commenting on the ports business, Li said the business is growing organically and that the company will keep expanding the operations.In another topic, Li said that Hutchison's debt is expected to be reduced by a third this year.He did not specify which debt will be reduced and how the company intends to go about it.Based on the company's consolidated balance statement for 2006, Hutchison has current bank borrowings and other debts of 22 bln hkd while trade and other payables amount to 66.5 bln hkd.(1 usd = 7.8 hkd)roby.lau@xfn.comrl/rc
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