Hutchison Whampoa Beats Expectations, Still Goes For 3G
Hong Kong-based Hutchison Whampoa announced first half net profit of HK$5.95bn
(US$700m), down 17% from a year earlier, when its results included a HK$1.9bn
one-off gain. The results were much better than expected: five analysts polled
earlier in the week banks estimated that Hutchison would make between HK$4.3
billion and HK$5.1 billion. Li Ka-shing, chairman of Hutchison, insisted that plans announced this week
by Dutch carrier Royal KPN to pull out of their UK 3G mobile joint venture would
have no impact on the business. Hutchison said it was deeply disappointed by
KPN's decision, about which there had been discussion, but the company remained
on track to meet its target of launching the UK 3G service in October. "We
are going to launch 3G at full speed," said Mr Li. KPN wrote off 1.2bn euros on its 15% stake in the venture; Hutchison holds
65% Japan's NTT DoCoMo holds 20%. Hutchison said KPN's writedown did not reflect
an appropriate valuation of the business as a going concern under its management,
and said it would keep a purchase of KPN's stake as an open option. Canning Fok, Hutchison managing director, said the withdrawal of other 3G operators
from the market was good for the company. "If you ask me I would say it’s
better to have fewer players in the business," Mr Fok said. “In terms
of KPN I think their problem is well-known. I think most of you know what financial
position they’re in," Mr Fok said. .
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