Hutchison reins in lossesJesse Hogan February 26, 2008 - 10:40AM...

Hutchison reins in losses
Jesse Hogan
February 26, 2008 - 10:40AM

The owner of the 3 Mobile network, Hutchison Telecoms, has declared its pre-tax earnings will finally be positive this year after significantly reducing its losses in 2007.

In recent trade, shares were up 3.2% to 16 cents.

Hutchison, which reports in calendar years, revealed a 25% revenue increase for the year and an $83 million improvement in operational earnings (EBITDA) to $114 million.

Its underlying net loss for the period, however, was $285 million, although that was a 65% improvement on its $759 million loss in 2006.

3's customer base rose 27% for the year to 1.59 million - 89% were higher-spending post-paid customers - but their average monthly revenue slipped 2.7% to $68.61. The company insisted a better measure of performance was the earnings margin of $52.13, which fell only 4 for the year.

Two positive statistics for 3 were that its churn - the number of customers cancelling their service - was steady at 1.1%, and the cost of acquiring customers fell 4% to $263, although that remains higher than its mobile carrier peers.

Hutchison chief executive Nigel Dews said the company's focus ''remains firmly on continuing to see 3's strong operating performance flow through to the bottom line''.

''Exiting 2008 EBIT positive is an important financial milestone,'' he said in a statement.

Investors, including Hong Kong billionaire and majority owner Li Ka-shing and Telecom New Zealand, will not be paid a dividend for the period.

Hutchison also announced the peak connection speed of the 3G network it shares with Telstra would be upgraded to 7.2 megabits per second during 2008, but said the timing would be dependent on the availability of compatible handsets and broadband datacards.