Hutchison Telecommunications (Australia) Ltd
Hutchison Telecommunications (Australia) — H1 2006 Earnings Presentation
20 slides from Hutchison Telecommunications (Australia)'s earnings presentation, Aug 23, 2006
Slide 1: ASX cover letter: Half Year Results Presentation
Hutchison Telecommunications (Australia) Limited ABN 15 003 677 227 A member of the Hutchison Telecommunications Group Building A, 207 Pacific Highway St Leonards NSW 2065 Tel: (02) 9964 4646 Fax: (02) 9964 4668 www.hutchison.com.au Companies Announcements Office Australian Stock Exchange Date 23 Au
Slide 2: Media Release: Hutchison Continues Strong 3G Growth
Hutchison Telecommunications (Australia) Limited ABN 15 003 677 227 A member of the Hutchison Telecommunications Group Building A, 207 Pacific Highway St Leonards NSW 2065 Tel: 02 9964 4646 Fax: 02 9964 4668 www.hutchison.com.au Media Release 23 August 2006 Hutchison Continues Strong 3G Growth 3G op
Slide 3: Media Release (page 2)
Hutchison Telecommunications (Australia) Limited A member of the Hutchison Telecommunications Group have also increased. During the period, 57% of 3’s customers were actively generating billable content events. “The increased use of 3’s content services is a strong endorsement of our product offerin
Slide 4: 2006 Half Year Results
Hutchison Telecommunications (Australia) Limited 2006 Half Year Results Kevin Russell Chief Executive Officer 23 August 2006
Slide 5: Highlights
Highlights • Over 1 million high margin 3G customers • Service revenue of $423.6 million, up 16% • Average non-voice revenue per customer per month in the 3G business increased from $16 to $19 • Positive EBITDA of $1.3 million for the period, a function of growth in revenue and margin and tight cost
Slide 6: Financial Highlights
Financial Highlights ($million) Half Year to Half Year to Change 30 June 06 30 June 05 Service revenue 423.6 364.4 16% EBITDA (loss) 1.3 (122.6) n/a Underlying NPAT (loss) (225.5) (305.3) 26% Impact of CDMA network (299.2) - n/a closure Reported NPAT (loss) (524.7) (305.3) -72% CAPEX (84.5) (147.9)
Slide 7: CDMA Network Closure Costs
CDMA Network Closure Costs Half Year June 2006 $m $m Upgrade costs Handset subsidy 71.5 Commissions 7.7 Other indirect expenses 18.7 97.9 Site decommissioning costs 28.0 Depreciation and amortisation Accelerated depreciation 131.6 Accelerated amortisation 41.7 173.3 Total CDMA network closure costs
Slide 8: Mobile Customer Base
Mobile Customer Base (Mobile Customers '000) 1,131 1,035 87 2G 950 3G 839 381 1,044 418 610 426 922k 654 post-paid 386 (88.3%) 532 413 224 1H04 2H04 1H05 2H05 1H06 Step change in scale for 3 5
Slide 9: Service Revenue
Service Revenue ($million) 424 394 364 64 312 129 2G 146 3G 211 147 360 265 127 218 165 84 1H04 2H04 1H05 2H05 1H06 3G market provides the growth opportunity 6
Slide 10: ARPU and Margin
ARPU and Margin $70 $69 $67 $65 $62 $48 $48 $48 ARPU $45 $45 Margin 1H04 2H04 1H05 2H05 1H06 Margins supported by strengthening contribution from non-voice services 7
Slide 11: Continued Strength in Non-voice
Continued Strength in 3 Non-voice • Non-SMS services usage continues to grow • 57% of base generating billable content events • 770,000 monthly subscription services at 30 June • 1H06 41.6m content events vs 1H05 19.6m $19 $19 SMS $16 $9 Non-SMS $13 $12 $11 $11 $9 $4 $8 $8 $10 $8 $8 $7 $5 $4 1H04 2H
Slide 12: Running Operating Expenditure
Running Operating Expenditure ($million) 391 49 354 21 321 36 33 36 50 53 Other 28 Adv & Promotion 54 Employee Benefits Expense 80 56 Net Handset Costs 42 Direct Telecommunication 176 191 161 1H05 2H05 1H06 Scalable cost base together with 2G savings being realised 9
Slide 13: Customer Acquisition Costs
3 Customer Acquisition Costs $427 $377 $265 1H05 2H05 1H06 Significant reduction in handset subsidies 10
Slide 14: CAPEX
CAPEX ($million) 307 207 195 59 2H 1H 84 148 112 2004 2005 2006 Efficiencies of W-CDMA mean greater capacity at lower cost 11
Slide 15: What to Expect in 2H06
What to Expect in 2H06 • CDMA closure now complete with more savings being realised • 100% focused on 3G growth • 3G market growth will continue to accelerate • Significant evolution of mobile broadband offering • EBITDA positive for the second half Well positioned for growth to continue 12
Slide 16: EN Hutchison
EN Hutchison Hi Telecoms
Slide 17: Chief Executive's Address (speaking notes)
Hutchison Telecommunications (Australia) Limited 2006 Half Year Results 23 August 2006 Chief Executive’s Address Slide 1 - Introduction Good afternoon everyone – welcome and thank you for joining us today. During this call I will take you through the financial results for Hutchison Telecoms for the
Slide 18: Speaking notes: NPAT loss and CDMA closure costs
The first half Reported NPAT loss of $524.7 million included $299.2 million of costs and accounting charges related to the upgrading of our 2G customer base and the closure of the 2G network. I will cover these in more detail in the next slide. These costs and charges are consistent with our estimat
Slide 19: Speaking notes: margins and non-voice
Given the executional risk of losing high margin 2G customers to competitors during the upgrade programme, and the industry trends of declining mobile margins, we are pleased with the stable margin performance in these first half results. Slide 8 – Continued Strength in 3 Non-voice In the six months
Slide 20: Speaking notes: CAPEX and 2H06 expectations
activity. With global purchasing power on our side, we are well placed to aggressively compete in this area and maximise our opportunity to gain further scale. Slide 11 – CAPEX Capital expenditure for the period of $84.5 million is well down on the CAPEX from this time a year ago and is principally
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