Dear shareholders and friends,
On behalf of the Board of Directors of Hutchison Telecommunications (Australia) Limited, I thank you for the confidence your investment displays in our business.
2009 was an eventful year for Hutchison, with the nature of Hutchison’s business changing due to the merger of Hutchison 3G Australia Pty Ltd (H3GA) and Vodafone Australia Limited (VAL). As a result of the merger, Hutchison moved from having a 100% interest to having a 50% interest in H3GA (now renamed Vodafone Hutchison Australia (VHA)) which operates the combined ‘3’ and Vodafone businesses in Australia.
With the merger transaction complete in the first half of 2009, Hutchison now has an investment in a dynamic new challenger in the Australian telecommunications market that has the critical scale to compete more effectively.
Hutchison recognised a $17.9 million profit for the first six months of 2010, based on the performance of Vodafone Hutchison Australia (VHA). Hutchison’s share of VHA’s service revenue grew by 24.1% year-on-year to $1.071 billion, and full year operating margin was up 36% to $828.1 million.
As a result of the merger transaction, Hutchison ceased to consolidate the results of the operating entity and has started to equity account for its interest in VHA.
Hutchison has a high degree of confidence in the prospects for its investment in VHA. The merger is expected to deliver cost synergies with a net present value of more than A$2 billion and progress in realising these synergies post-merger has been ahead of expectation.
Throughout 2010 VHA’s customer numbers have continued to grow strongly and now sit at over 7.4 million customers connected on VHA networks in Australia. VHA is in a good position to continue to grow market share and profitability in 2010.
Looking ahead, Hutchison also welcomes policies concerning the National Broadband Network, the allocation of mobile spectrum and the support and promotion of the digital economy and is optimistic that it will be enabled to expand both the scope and the geographic areas of its data and communications service offerings in Australia in the coming years.
In summary, Hutchison performed well against the global economic crisis and ended 2009 in solid shape having successfully completed the merger with Vodafone. We look forward to a successful year in 2010 as integration activities continue to progress, synergies are achieved, and the exciting future for the company is firmly grounded.
Yours faithfully,
FOK Kin-ning, Canning
Chairman