Hutchison Telecommunications (Australia) Ltd. (HTA.AU) said Tuesday that it swung to a first half net profit of A$552.0 million, boosted by the sale of its "3" business into a new mobile phone joint venture with Vodafone Australia.

In a statement, the group said it recorded a A$587.3 million profit on the sale, which was completed in early June. Excluding the proceeds of the sale, the group's loss for the half ended June 30 narrowed to A$35.3 million from a net loss of A$85.4 million a year earlier.

Hutchison Australia and Vodafone agreed to merge their mobile phone units into a new entity - Vodafone Hutchison Australia - giving them more power to take on Australia's mobile phone market leader Telstra Corp. and Singapore Telecommunications Ltd.'s Optus unit.

"We are making good progress with all integration work to create the new Vodafone Hutchison Australia business," Hutchison Telecoms Australia Chief Executive Nigel Dews said.

"More importantly, the merger gives VHA the scale to compete more effectively in the Australian market," he said.

Revenue for the six months rose 19.4% to A$912.5 million from a year earlier, which included one month's contributions from the new joint venture.

The combined group had a total of 6.3 million mobile phone subscribers at the end of June, with 55% of those on a postpaid basis. It had 926,000 mobile broadband subscribers.

Average revenue per user was down 7.8% on year at A$62.62, and subscriber acquisition costs were also down 15% on year at A$193. However, the group said tough competition and increased customer take-up of Apple's more expensive iPhone is likely to increase the cost of getting new subscribers in the second half of the year.

Hutchison Telecom Australia, which is majority owned by Hong Kong conglomerate Hutchison Whampoa Ltd., didn't declare an interim dividend.

The group said it was free cash flow positive in the first half, and it expects VHA to remain cash flow positive in its first full year excluding one off costs associated with the merger.

-By Lyndal McFarland, Dow Jones Newswires; 61-3-9292-2093; lyndal.mcfarland@dowjones.com
Hutchison Telecommunicat... (ASX:HTA)
Historical Stock Chart
From Apr 2024 to May 2024 Click Here for more Hutchison Telecommunicat... Charts.
Hutchison Telecommunicat... (ASX:HTA)
Historical Stock Chart
From May 2023 to May 2024 Click Here for more Hutchison Telecommunicat... Charts.