Dear shareholders and friends,
On behalf of the Board of Directors of Hutchison Telecommunications (Australia)
Limited (HTAL), I thank you for the confidence your investment displays in
our business.
In the six months to 30 June 2011, HTAL reported a loss of $78.2 million. HTAL accounts
for its investment in Vodafone Hutchison Australia Pty Limited (VHA) as an
equity investment, therefore revenue from VHA's ordinary activities is not included
in HTAL’s consolidated revenues from ordinary activities.
Total VHA revenue attributable to HTAL was $1,137.6 million, a decrease of 3.5 percent
year-on-year. Customer service revenue of $1,038.5 million was 3.0 percent lower,
due to the net decline in customer base, and slight reduction in average revenue
per user (ARPU).
Operating margin as a percentage of service revenue decreased from 77.3 percent
in the corresponding period last year to 74.5 percent. HTAL’s share of VHA’s operating
margin decreased from $828.1 million in the corresponding period last year to $773.5
million in the six months to 30 June 2011.
HTAL’s share of VHA EBITDA decreased 36.8 percent to $140.8 million and HTAL’s share
of capital expenditure was $162.1 million.
The merger integration of the Vodafone and 3 businesses is more than half-way through,
and the benefits of scale from combining the two businesses are now apparent in
the financial results. Merger synergies remain on track to deliver the $2 billion
net present value from cost synergies, as announced at the time of the merger. Integration
will continue in 2011 and beyond, delivering further financial benefits.
HTAL is supportive of VHA’s recovery plan, and particularly the significant investment
being made in the network. HTAL is confident that this investment, and the improvements
to customer service, will support VHA’s return to profitable growth.
HTAL is also supportive of the work underway with the National Broadband
Network (NBN), in particular the potential mutual benefits created by a significant
backhaul relationship. HTAL also welcomes the opportunity for VHA to be
amongst the first to trial NBN services and is optimistic that VHA will be in a
position to expand the scope of its communication products and services to customers
in Australia.
Yours faithfully,
FOK Kin-ning, Canning
Chairman