Three Group Europe maintains stable earnings in turbulent H1 2016

Three UK store front

CK Hutchison announced its Three Group Europe mobile business is now one of the major contributors to group earnings, after the division maintained progress amid economic fluctuations in the region during the first half of 2016.

The Hong Kong-headquartered company announced Three Group Europe increased EBITDA in reported currency by 9 per cent year-on-year to HKD8.4 billion (€970 million/$1.08 billion) during the first half of 2016.

Revenue fell 1 per cent year-on-year to HKD30.1 billion during the period, which CK Hutchison said was due to depreciation in the value of the Euro.

In its earnings statement, CK Hutchison said the increase in EBITDA was mostly due to growth in its net customer service margin during the first half of the year. The figure was up 1 per cent year-on-year at HKD19.4 billion -- the bulk of which (86 per cent) was generated by contract subscribers.

Other contributing factors to the EBITDA growth include the realisation of cost synergies at Three Ireland, and effective cost management at the company’s other European mobile operations.

Three Group Europe also kept churn in check during the first half of 2016, maintaining the figure at 1.7 per cent, and revealed that data usage per active customer grew from 17.7 GB in the opening half of 2015 to 24.7 GB in the recent period.

Despite the solid performance of its European business during the period, CK Hutchison chairman Li Ka-shing warned that the UK’s recent decision to exit the European Union would pose a challenge “both for the UK and for Europe for at least the next two to three years”.

The chairman expressed confidence in CK Hutchison’s ability to navigate through the choppy waters, noting that the group’s “sizable investments in the UK and Eurozone are predominately resilient operations”. He added that the company expects its businesses in the UK and Europe will “continue to generate stable and reasonable returns”.

For more:
- see CK Hutchison’s earnings statement (PDF)

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