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29 November 2023

Hutchison revises break-even targets

By Agencies



Hutchison Whampoa, tycoon Li Ka-shing’s ports-to-telecoms flagship, has pushed back the break-even targets for its third-generation mobile telecoms business to next year, a Hong Kong newspaper reported Saturday.


Hutchison said last August it expected its 3G business to achieve positive monthly earnings before interest and taxes (EBIT) on a sustainable basis in 2008, barring unfavourable regulatory and market changes.


However, at a company dinner on Friday, Li (pictured above) forecast the breaking even on the EBIT level would only be achieved next year, the South China Morning Post said.


“Our 3G business will turn a new page in 2008, on a path to achieving positive full-year cash flow and positive EBIT in 2009,” Li was quoted as saying.


Hutchison has been the most aggressive investor in European 3G mobile telecoms, but profits have been elusive amid fierce competition. Its $25 billion (Dh91.75bn) bet on high-speed mobile phones has been a drag on its share price for several years. The company’s 3G loss before interest and taxes narrowed to HK$20bn (Dh9.41bn) in 2006 from HK$36.3bn in 2005, the newspaper said.


Looking ahead, Li sounded a note of caution.


“The global business environment could experience greater turbulence this year due to the fallout from the sub-prime mortgage crisis and the possibility of continuing weakness of real estate prices in the United States, record oil prices, rising inflation, and tightening economic measures on the mainland.”


But he believed the Hutchison’s investment across the globe are all sound and heading in positive direction, the newspaper said.


Shares in Hutchison rose 1.35 per cent to HK$90 on Friday, lagging the benchmark Hang Seng Index’s 2.4 per cent rise. (Reuters)