Losses narrow for Australia's Hutch Telecom


Li Ka-Shing's Hutchison Whampoa owns 58 percent of Hutchison Telecoms

By Ravi Hiranand
CNN Hong Kong

SYDNEY, Australia (CNN) -- Australian mobile carrier Hutchison Telecommunications on Monday announced net losses of A$72.67 million ($39.2 million) for the first half ending June 30th.

The loss was 20.2 percent less than the corresponding period last year and in line with analyst expectations.

Orange, the company's mobile brand, also posted negative earnings before interest, tax, depreciation and amortization (EBITDA), but again the loss narrowed and the company was confident that it would continue to do so through the year.

"Once again we have markedly reduced our 2G EBITDA loss; and we remain on track to achieve our full-year target of being EBITDA positive in the fourth quarter," said Kevin Russell, CEO of Hutchison Telecommunications.

3G concerns

Orange is Australia's fourth-largest mobile carrier, but will be the first to roll out 3G services in the country after rivals scaled back plans, fearing a lack of demand.

The company's parent, Hong Kong conglomerate Hutchison Whampoa, plans to launch 3G networks in the United Kingdom, Italy and Hong Kong in October, with the Australian launch in Sydney, Melbourne and Brisbane initially planned for early 2003.

The peak funding requirement to roll out their 3G network is A$3 billion ($1.62 billion), A$1 billion of which the company has already raised through a rights issue and equity from partner Telecom Corp of New Zealand.

The company said it would look at debt market funding options next year to raise the remaining two-thirds.

"The remaining requirement of up to A$2 billion, we will look at funding options from the debt market, probably in 2003," said Russell.

Revenues sharply down

Hutchison's revenues for the first half were A$114.2 million ($61.6 million), a dramatic drop of 46.5 percent year-on-year -- but that was due to the company selling its mobile resale division back to Optus. (full story)

The division contributed A$149.5 million to the company's revenue in the first half last year but only A$2.9 million for the same period this year, while revenue for the half from Orange was A$93.9 million ($50.7 million), up 13.1 percent year-on-year.

Orange's subscriber base swelled 24.7 percent in the period.

Shares in the company were up one Australian cent to 33.5 cents on a generally flat day that saw shares on the Australian Stock Exchange in Sydney fall 0.1 percent to close at 3103.8. (full story)