SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16 OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE MONTH OF SEPTEMBER 2008
HUTCHISON TELECOMMUNICATIONS
INTERNATIONAL LIMITED
(Translation of Registrants Name into English)
20/F, Hutchison Telecom Tower
99 Cheung Fai Road
Tsing Yi
Hong Kong
(Address of Registrants Principal Executive Offices)
(Indicate by check mark whether the registrant
files or will file annual reports under cover Form 20-F or Form 40-F.)
Form 20-F
x
Form 40-F
¨
(Indicate by check
mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934).
Yes
¨
No
x
If Yes is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): 82-
EXHIBITS
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Exhibit
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Description
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1.1
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2008 Interim Report
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SIGNATURE
Pursuant to the requirements of the
Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Date: September 11, 2008
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HUTCHISON TELECOMMUNICATIONS INTERNATIONAL LIMITED
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By:
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/s/ Christopher Foll
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Christopher Foll
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Chief Financial Officer
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Hutchison Telecommunications International Limited
Corporate Information
Board of Directors
Chairman
FOK Kin-ning, Canning,
BA, DFM, CA (Aus)
Executive Directors
LUI Dennis Pok Man,
BSc
Chief Executive Officer
Tim Lincoln PENNINGTON,
BA
Chief Financial Officer
CHAN Ting Yu,
LLB, BA, PCLL
(also Alternate to Lui Dennis Pok Man)
WONG King Fai,
Peter,
MSc, FHKIE
Non-executive Directors
CHOW WOO Mo Fong, Susan,
BSc
(also Alternate to Fok Kin-ning, Canning and Frank John Sixt)
Frank John SIXT,
MA, LLL
Independent Non-executive
Directors
KWAN Kai Cheong,
BA, CA (Aus)
John W STANTON,
BA, MBA
Kevin WESTLEY,
BA, FCA
Alternate Directors
WOO Chiu Man, Cliff,
BSc
Chief Technology Officer
(Alternate to Tim Lincoln Pennington)
MA Lai Chee, Gerald,
BCom, MA
(Alternate to Wong King Fai, Peter)
Audit Committee
Kevin WESTLEY (Chairman)
KWAN Kai Cheong
John W STANTON
Remuneration Committee
FOK Kin-ning, Canning (Chairman)
KWAN Kai Cheong
Kevin WESTLEY
Company Secretary
Edith SHIH,
BSE,
MA, MA, EdM, Solicitor, FCS, FCIS
Qualified Accountant
LEE Chi Hung, Nicky,
BA, CPA (HK)
Auditor
PricewaterhouseCoopers
Principal Bankers
The
Hongkong and Shanghai Banking Corporation Limited
Standard Chartered Bank (Hong Kong) Limited
Notes:
(1)
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Mr Tim Lincoln Pennington has tendered his resignation as an Executive Director with effect from 20 August 2008 and as Chief Financial Officer of the Company with effect
from 1 September 2008;
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(2)
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Mr Christopher John Foll will succeed Mr Pennington and be appointed as an Executive Director with effect from 20 August 2008 and as Chief Financial Officer of the Company
with effect from 1 September 2008; and
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(3)
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Mr Woo Chiu Man, Cliff, who will cease automatically to act as Alternate Director to Mr Pennington with effect from 20 August 2008, will be appointed as Alternate Director
to Mr Foll with effect from 20 August 2008.
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Contents
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2
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Hutchison Telecommunications International Limited 2008 Interim Report
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Operational Highlights
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Customer base increased 10.3% quarter-on-quarter to 11.1 million
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Turnover increased 22.0% to HK$11,760 million
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EBITDA up 14.7% to HK$3,223 million
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Operating profit at HK$2,281 million, including one-time gains of HK$1,463 million
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Profit attributable to equity holders of the Company at HK$1,165 million
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Earnings per share attributable to equity holders of the Company at HK$0.24
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Hutchison Telecommunications International Limited 2008 Interim Report
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3
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Chairmans Statement
The Group once again delivered a strong underlying performance for the first six months of 2008. Our customer base increased 67.9% year on year to 11.1 million and turnover increased 22.0% to approximately
HK$11.8 billion compared to the same period last year. Profit from continuing operations attributable to equity holders of the Company was HK$1,165 million including one time items, compared to HK$57 million in the same period last year.
Our mobile operations in Hong Kong and Israel, fuelled by strong 3G customer growth, again performed well in the first half of 2008 despite intense competition and
high penetration in these two markets. Both businesses not only maintained the customer growth momentum but also delivered double digit Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA) growth and strong free cash
flow in the first half of the year. We are delighted to see Hong Kong and Israel harvesting the results of our investments in telecommunications technology, infrastructure and customers over the years. Equally our fixed-line business in Hong Kong
also continued its encouraging performance with a 19% operating profit growth compared to the same period last year, reflecting success in the carrier and international business as well as the corporate and business sectors.
On 25 July 2008 the Group completed the acquisition of NEC Corporations 5% interest in our 2G and 3G businesses in Hong Kong and Macau. Our decision to
increase our stake in these businesses from 70.9% to 75.9% reconfirms our confidence in their long term value and potential.
In Indonesia we have seen
good sales momentum since launch of service in the first half of 2007. During the period we undertook a number of strategic actions to accelerate our network rollout. We have entered into an agreement for the sale and lease back of tower sites
announced in March 2008 and extended our relationships with vendors. We expect further challenges ahead of us but believe we have laid a solid foundation to capture the potential of this market. Vietnam remains a market of tremendous growth
potential and we have made good progress on the conversion from CDMA to GSM technology and towards the targeted re-launch of mobile services at the end of this year.
Our business in Thailand recorded EBITDA that covered its capital expenditure. However, the development set out in the non-binding Memorandum of Understanding that we signed with CAT Telecom Public Company Limited in
November 2007 has not progressed. We also encountered some setbacks in our business in Sri Lanka which were compounded by the continued economic turmoil and tightened security situation. However, we remain committed to the market and continue the
aggressive network expansion started in 2007.
Finally we completed the sale of our indirect interests in Ghana on 11 July 2008 and will record a gain on
disposal of approximately HK$295 million in the second half of 2008.
The Company did not declare any dividends for the six months ended 30 June 2008.
Our 2008 dividend policy for a minimum payout of 30% of the Groups profit attributable to equity holders of the Company adjusted for foreign exchange gains or losses, abnormal items and acquisitions or disposals remains unchanged.
Group Review
The Groups unaudited profit from continuing
operations attributable to equity holders of the Company in the first six months of 2008 was HK$1,165 million compared to HK$57 million in the same period last year. The basic earnings per share from continuing operations in the first six months of
2008 were HK$0.24 compared with HK$0.01 in the same period last year.
Financial Results for the Six Months Ended 30 June 2008
Turnover of the Group increased 22.0 % to HK$11,760 million in the first six months of 2008, compared to HK$9,639 million in the same period last
year, driven primarily by growth in our customer base which increased 67.9% year-on-year to 11.1 million. The appreciation of the New Israeli Shekel (NIS) against the Hong Kong Dollar has once again favoured a higher reported group
turnover in Hong Kong Dollar terms.
All of the Groups businesses recorded increased turnover with particularly strong growth from Israel, Hong Kong
fixed-line and Thailand. Turnover from Israel represented 59.4% of the Groups total turnover whilst Hong Kong and Macau accounted for 31.9% (of which mobile operations accounted for 20.4% and fixed-line operations 11.5%), Thailand 5.3%,
Indonesia 1.3% and Others 2.1%.
In the first half of 2008 the Group increased its EBITDA by 14.7% to HK$3,223 million, compared to HK$2,810
million in the same period last year. Growth in EBITDA was particularly strong in Israel, Hong Kong mobile and Hong Kong fixed-line, largely as a result of revenue growth. As a percentage to turnover, EBITDA was 27.4% in the first six months of
2008, a drop of 1.8% compared to 29.2% in the same period last year, reflecting higher network expansion expenses from our Indonesian, Vietnamese and Sri Lankan operations.
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Hutchison Telecommunications International Limited 2008 Interim Report
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Chairmans Statement
Depreciation and amortisation increased 21.4% to HK$2,406 million, compared to HK$1,982 million in the same period last year, reflecting capital expenditure incurred in prior periods for network expansion offset by the decrease in Thailand
as a result of the impairment charges on non-current assets taken last year. In the first half of 2008, we also accelerated depreciation on certain network assets in Vietnam and Israel totaling HK$305 million.
Operating profit for the first half of 2008 increased 174% to HK$2,281 million. This significant increase in operating profit was partly due to one-time gains of
HK$1,463 million arising from the first tranche of the tower sale in Indonesia and also compensation from a key supplier to our business in Indonesia recognised as other income. This compensation is in the form of credit vouchers received upon PT.
Hutchison CP Telecommunications (HCPT) waiving certain contractual obligations of the network supplier in Indonesia. Excluding these one-time gains and the accelerated depreciation charges, like-for-like operating profit would have been
HK$1,123 million, compared to HK$832 million in the same period last year, where improved operating profits from Israel, Hong Kong and Thailand were offset by higher start up losses from Indonesia, Vietnam and Sri Lanka.
In the first six months of 2008, the Group recorded a net interest income of HK$116 million compared to a net interest expense of HK$169 million in the same period last
year. The interest income earned during the period was HK$632 million, primarily from the Groups treasury operations which manage the retained cash balance of approximately HK$35.2 billion, broadly achieving a return in line with London US
Dollar Interbank rate.
Taxation charges in the first half of 2008 increased to HK$434 million, compared to HK$322 million in the same period last year, up
34.8% partly due to higher profit recorded by Israel resulting in increased current taxation, withholding tax charge on intra-group dividends received and the Groups fixed-line operations recognising a deferred tax charge.
The Group recorded a profit from continuing operations of HK$1,963 million in the first six months of 2008 compared to HK$341 million in the same period last year.
Excluding the one-time adjustments, profit for the period would have been HK$805 million. Profit from continuing operations attributable to shareholders was HK$1,165 million, compared to HK$57 million in the first half of 2007.
Operations Review
Indonesia
In the first half of 2008, we completed a few major initiatives to solidify our start-up position and to position the business to capture the growth potential. These
included entering into an agreement to sell 3,692 towers to PT. Profesional Telekomunikasi Indonesia (Protelindo) to release up to US$500 million (approximately HK$3,882 million) of capital to support our future network expansion. In
addition we extended our network supply agreement with Nokia Siemens Networks and entered into new contracts with ZTE Corporation to support our accelerated network rollout plan in Sulawesi and Kalimantan. At the end of June 2008 more than 4,000
base stations were on air and we are well on our way to achieving our target of 6,000 base stations by year end.
Financial Results for the
Six Months Ended 30 June 2008
Turnover in the first half of 2008 was HK$150 million, an increase of 28.2% from HK$117 million in the
second half of last year. In the first half the revenue increased at slower rate than expected mainly due to the intensified competition and the reduction in the interconnection charges which triggered price reductions in the market. Loss Before
Interest, Tax, Depreciation and Amortisation (LBITDA) increased to HK$348 million from HK$138 million in the first half of 2007 and HK$337 million in the second half of 2007, owing to higher operating costs resulting from network
expansion and significant increase in the number of leased base stations sites rather than self built sites which generally have lower operating costs to compensate for the higher level of capital expenditure incurred in a self built site. During
the period, there were two major one-time gains totaling HK$1,463 million which brought operating profit to HK$950 million. A disposal gain of HK$732 million on the first tranche of 1,128 towers transferred to Protelindo was recognised in the second
quarter. Another one-time gain of HK$731 million was recognised as other income in the first half of 2008 relating to the network suppliers compensation in the form of credit vouchers to the Groups Indonesian operations. If the one-time
gains from these two transactions were excluded, the Groups Indonesian operations would have reported an operating loss of HK$513 million compared to an operating loss of HK$139 million in the same period last year.
In the first half of 2008, depreciation and amortisation was HK$165 million, representing the depreciation charge on recognised capital expenditure and amortisation
charge on a capitalised telecommunications licence.
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Hutchison Telecommunications International Limited 2008 Interim Report
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Chairmans Statement
Capital expenditure was HK$947 million in the first half of 2008, principally representing the investment in network rollout being recognised as non-current assets. We expect several milestones to be reached in the second half of 2008 so
have not changed our capital expenditure guidance for the year of HK$4,000 million.
Benefiting from the proceeds received from the tower sale in the
period, the outstanding debt under the vendor finance facility was reduced to HK$1,439 million at the end of June 2008, compared to HK$1,807 million at the end of 2007. Shareholder funding at the end of the period was HK$2,361 million of which the
Groups contribution was HK$1,422 million.
Hong Kong and Macau
The Group is one of the leading mobile and fixed-line telecommunications operators in Hong Kong.
Combined turnover from
the Groups fixed and mobile businesses was 6.5% higher at HK$3,751 million in the first six months of 2008 compared to HK$3,521 million in the same period last year. EBITDA increased 11.8% to HK$1,384 million in the first six months of 2008
whilst EBITDA margin was 36.9%.
Hong Kong and Macau Mobile
We continue our 3G market leadership and delivered a superior performance in Hong Kong and Macau. According to
figures released by the Office of the Telecommunications Authority of Hong Kong SAR we have over 50%
1
share of the 3G market in Hong Kong. Our
leadership will be further enhanced by being the first operator in Hong Kong to launch iPhone 3G in July 2008 which was met with exceptional levels of market response.
Financial Results for the Six Months Ended 30 June 2008
Turnover of our Hong Kong and Macau mobile
operations was up 3.3% to HK$2,399 million in the first six months of 2008 compared to HK$2,322 million in the same period last year. Mobile service revenue grew at a faster rate than total turnover driven mainly by a 15.9% growth in the customer
base during the period offset by less handset sales as certain customers were expecting popular models, such as iPhone 3G, to be launched in the second half of the year.
EBITDA was 13.3% higher than that for the same period last year at HK$875 million, representing an improvement in the EBITDA margin by 3.3% to 36.5%, attributable to increased roaming and higher non-voice revenue
where we have higher margins as well as better economies of scale and continued cost control. Excluding expenditure on customer acquisition and retention, operating expenses were maintained at similar level for the same period last year despite
increased activity levels.
Depreciation and amortisation increased to HK$638 million, 19% higher compared to the first half of last year, due partly to
the 3G network investment in Macau incurred last year and to an increase in the amortisation of capitalised customer acquisition and retention expenditure incurred in previous periods.
As a result of the growth in recurring revenue and an efficient cost structure offset by higher depreciation and amortisation, operating profit was HK$237 million, 1% higher than that for the same period last year.
In the first half of 2008, capital expenditure on fixed assets increased to HK$229 million, or 9.5% of turnover. The operation generated improved cashflow
and was able to reduce external debt by HK$379 million to HK$4,367 million.
Hong Kong Fixed-line
We own and operate what we believe is the largest fibre-optic building-to-building telecommunications network in Hong Kong, with over 945,000 kilometres of core
fibre-optic cable. Fibre-optic networks are able to support a higher volume of traffic at faster transmission speeds for Internet and data communications compared to traditional copper cable networks. During the period we continued to see success in
further penetrating the corporate and business market which is an area we will continue to focus on.
Financial Results for the Six Months Ended
30 June 2008
Turnover of the Groups fixed-line business increased 12.8% to HK$1,352 million in the first six months of 2008 from
HK$1,199 million. Turnover from the corporate and business market increased 33.0% compared to the same period last year, driven not only by the continued growth in data businesses from the government and finance
1
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The Groups Hong Kong 3G customer base in April 2008 as a percentage to
the April 2008 3G customer statistics published by the Office of the Telecommunications Authority of Hong Kong SAR
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6
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Hutchison Telecommunications International Limited 2008 Interim Report
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Chairmans Statement
and banking sectors in the first half of 2008, but also the healthy and sustained growth in voice business where the Groups fixed-line business continued to benefit from business line number porting. We also saw a 14.8% growth in the
international and carrier business turnover compared to the same period last year mainly driven by the increased presence of our businesses in markets with high growth potential, expanded international network footprint and the provision of certain
premium network routings which together enabled us to broaden our customer base and solicit high yield carrier customers.
EBITDA was HK$509 million in the
first half of 2008 compared to HK$466 million in the same period last year. The EBITDA margin was 37.6%, as compared to 38.9% in the first half of 2007 which was due to the growth of the international and carrier business that typically carries a
relatively lower margin than corporate and residential markets.
As a result of the foregoing, operating profit in the first six months of 2008 was HK$180
million, an increase of 19% from HK$151 million in the same period last year.
Capital expenditure on fixed assets was HK$124 million as compared to HK$185
million in the same period last year, principally on the enhancement of our core fibre-optic networks and increased geographical coverage of high speed broadband services.
Israel
Partner Communications Company Ltd. (Partner
Communications) continued to make solid progress by focusing on its strategy of offering innovative technology, service excellence and a differentiated marketing approach. The orange
TM
brand continues to be one of the most widely admired brands in Israel being awarded the leading telecom brand in Israel for the sixth consecutive year by
Globes
, an Israeli daily business
newspaper. This has contributed to the strong growth in 3G customers during the first half of 2008. Partner Communications continues to be an integral part of the Group contributing 59.4% of turnover and 73.5% of EBITDA in the first half of 2008.
Financial Results for the Six Months Ended 30 June 2008
Partner Communications continued to deliver strong financial result for the first half of 2008. Turnover increased 29.0% from the same period last year to HK$6,990 million, representing a 8.5% underlying growth in
local currency terms. Turnover in Hong Kong Dollar terms was boosted by a favourable foreign exchange impact resulting from the appreciation of NIS during the period. The increase primarily reflects the 4.5% growth in the customer base, an increase
in the weight of post-paid customers in our base, higher average minutes of use, as well as an increase in content and data revenues. Non-voice revenue increased three percentage points to 13% of revenue, as compared with 10% in the same period last
year. The higher revenues were partially offset by a decrease in average revenue per minute resulting from competitive pressures and regulatory intervention including the approximately 14% reduction in interconnect tariffs which came into effect on
1 March 2008, being the final reduction in the Ministry of Communications program of mandated gradual reductions from 2005 to 2008.
EBITDA was
reported at HK$2,369 million 32.4% higher when compared with HK$1,789 million in the same period last year mainly due to the higher level of revenue. The EBITDA margin was higher than that for the first half of 2007 by approximately one percentage
point at 33.9%, reflecting a tight operating cost structures aligning with growth in revenue, lower customer acquisition costs which were partially offset by increase in expenditure on customer retention. Depreciation and amortisation increased
HK$250 million to HK$1,025 million compared with the same period last year, mainly due to the acceleration in depreciation charge resulting from an agreement entered into with LM Ericsson Israel Ltd in December 2007 to replace the then existing 3G
equipment.
Partner Communications operating profit increased to HK$1,345 million in the first six months of 2008 compared to HK$1,018 million in the
same period last year.
Capital expenditure was HK$546 million compared to HK$364 million in the same period last year reflecting mainly the impact of the
appreciation of the NIS against Hong Kong Dollar.
In the period Partner Communications expended HK$453 million to buy back its own shares. The
Groups interest in Partner Communications increased to 50.9% from 50.2% of the year end as a result of the share buyback.
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Hutchison Telecommunications International Limited 2008 Interim Report
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Chairmans Statement
Thailand
The Groups operation in Thailand showed a significant improvement in its operating results for the first six months of 2008,
particularly in customer and turnover growth. In the first half of 2008 the Thailand operations delivered its key financial target of EBITDA that covered its capital expenditure. However the business environment is still tough and the market is
clouded with uncertainty with respect to some aspects of the regulatory framework. Coupled with weak consumer confidence from rising inflation and political uncertainty, the Group is maintaining its cautious view on further investment in Thailand.
Financial Results for the Six Months Ended 30 June 2008
Turnover was HK$621 million for the first six months of 2008, an increase of 25.5% from HK$495 million in the same period last year. The strong growth compared to first half of 2007 was mainly driven by 40.3% increase
in the customer base and success in tariff plan restructuring.
EBITDA was HK$59 million in the first six months of 2008, representing an almost two-fold
improvement from EBITDA of HK$32 million in the same period last year as operating cost increases and the subscriber acquisition cost increases were kept under control despite the fact that customer base increased by 321,000 during the year.
Operating profit for the first half of 2008 was HK$59 million, turned around from an operating loss of HK$273 million in the same period last year. The
improvement in operating results was primarily due to significantly lower depreciation and amortisation charges for the period compared with first half of 2007 as a result of the impairment charge taken in the second half of last year on the
non-current assets as well as the strong growth in turnover.
Capital expenditure in the period was HK$18 million compared to HK$17 million in the same
period last year.
During the first half of 2008 the Group closed out US$470 million (THB 15,547 million or HK$3,665 million) foreign currency swap
contracts. These contracts committed the Group to sell Thai Baht and buy US Dollar at pre-agreed rates. The Group entered into these contracts to fulfill local exchange controls when it injected additional funding into Thailand for repayment of its
outstanding external debts in 2007. The Group recognised a loss of HK$5 million in its profit and loss statement in respect of these transactions. As at 30 June 2008 the Group had remaining contracts to sell Thai Baht and buy US Dollars with a
notional amount of US$625 million (THB21,067 million or HK$4,874 million).
Others
Others is currently comprised of Vietnam, Sri Lanka, Ghana and Corporate Office.
Sri Lanka
Turnover for the first six months increased 3.5% to HK$89 million, compared to HK$86 million in the same period last year. The slow down in turnover growth reflects
the worsening of economic condition in the country which has led to a significant reduction in tariff and underlying customer usage.
EBITDA was HK$34
million, a decrease of 26.1% from HK$46 million in the same period last year. The fall in EBITDA was largely attributable to the increase in network costs, resulting from the additions of base stations and the associated running expenses, rise in
electricity unit charges as well as general increase in price levels caused by inflation which stood at 28%.
Depreciation and amortisation charges also
increased 27% to HK$19 million compared to HK$15 million in the same period last year, primarily due to the increase in network assets recognised during the period. As a result of these factors operating profit for the six months in 2008 was HK$15
million, a decrease of 51.6% compared to HK$31 million in the first half of 2007.
Capital expenditure increased 2.9% compared to the same period last year
to HK$71 million, driven mainly by network expansion.
Vietnam
In Vietnam, following the granting of an investment certificate for a GSM network, the operations stopped customer recruitment and existing customers were migrated to a third party network. The customer migration has completed and the GSM
network development is progressing with a target to re-launch services at the end of this year.
In the first half of 2008 we recorded an accelerated
depreciation of HK$181 million on the CDMA equipment and other capitalised assets which cannot be redeployed in the new GSM network and as such have depreciated to residual value. This led to an increase in the depreciation charged for the period to
HK$223 million compared to HK$16 million in the same period last year. The operating loss for the first half of 2008 increased to HK$396 million compared to operating loss of HK$114 million in the same period last year.
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Hutchison Telecommunications International Limited 2008 Interim Report
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Chairmans Statement
Capital expenditure in the first half of 2008 was HK$204 million reflecting the slow down in the deployment of the CDMA network. Depending on timing we expect to see a significantly higher capital expenditure in the second half of 2008 as
we accelerate the network development in preparation for the re-launch of services.
Ghana
The Group completed the sale of its indirect interests in Ghana on 11 July 2008. The Group is expected to realise an estimated gain of approximately HK$295 million
in the second half of 2008 and a net cash inflow of approximately HK$545 million. For the six months ended 30 June 2008 Ghana recorded an operating loss of HK$13 million.
Corporate Treasury
As at 30 June 2008 our treasury operations maintained a cash balance of HK$35.8
billion. The cash was held primarily in short term money market deposits in US dollar earning an average return of 2.95% in the first half of 2008. The interest income recorded on the cash balance was HK$527million in the first half of 2008.
Outlook
We reported a good performance in the first
half of 2008 and progress in our emerging markets. With the positive actions we took in 2007 to address the issues that were most challenging to us we now have a clear visibility to the opportunities ahead of us. Looking ahead to the second half of
2008, Indonesia and Vietnam will continue to require our attention and resources to accelerate the expansion and rollout of networks in these two major markets. We are still focusing on our cash generating businesses in Hong Kong and Israel to keep
the growth momentum and also look for further development by leveraging the success we have built in these two markets. Accordingly the Groups capital expenditure guidance is maintained at HK$7.0 billion for 2008.
During the period we have evaluated a number of opportunities to expand the Groups operations. In the main we continue to see that price expectations for emerging
market telecom assets have not been significantly dampened. There remain opportunities to expand the Groups business but we are not optimistic that this will be achieved in the second half of 2008.
We continue to be aware of developments in the global economy. There is evidence of some deterioration in our operating environment as the impact of higher inflation and
lower growth affects consumer spending. We are also concerned about the availability of capital and credit in view of the global credit crunch. However, we are a well capitalised company and during this period would aim to maintain high levels of
liquidity to ensure we can meet our operating objectives.
I would like to thank the Board of Directors and all the Groups employees around the world
for their continued hard work, support and dedication.
FOK Kin-ning, Canning
Chairman
Hong Kong, 19 August 2008
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Hutchison Telecommunications International Limited 2008 Interim Report
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9
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Group Capital Resources and Other Information
Capital Resources and Liquidity
The capital and reserves
attributable to equity holders of the Company as at 30 June 2008 were approximately HK$53,033 million, compared with HK$51,284 million as at 31 December 2007.
During the period the Group entered into a conditional Tower Transfer Agreement to sell up to 3,692 base station tower sites for a cash consideration of US$500 million (approximately HK$3,882 million). Completion of
the sale is expected to occur in tranche over a two-year period. During the six months ended 30 June 2008, sale of first tranche comprising 1,128 sites was completed and resulted in a cash inflow of US$152 million (HK$1,189 million).
The net cash of the Group was approximately HK$25,965 million, comprising the cash and cash equivalents of approximately HK$37,234 million and borrowings
of approximately HK$11,269 million, as follows:
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Total debt
HK$ millions
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As at 30 June 2008
Cash and
cash
equivalents
HK$ millions
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Net cash / (debt)
HK$ millions
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Hong Kong and Macau:
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Mobile telecommunications
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(4,367
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378
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(3,989
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)
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Fixed-line telecommunications
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461
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461
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Israel
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(4,943
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255
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(4,688
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Thailand
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(390
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14
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(376
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)
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Indonesia
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(1,439
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)
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282
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(1,157
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)
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Corporate Treasury
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35,824
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35,824
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Others
|
|
(130
|
)
|
|
20
|
|
(110
|
)
|
|
|
|
|
|
|
|
|
|
|
|
(11,269
|
)
|
|
37,234
|
|
25,965
|
|
|
|
|
|
|
|
|
|
|
The Groups cash and cash equivalents as at 30 June 2008 were denominated as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
HK$
|
|
|
USD
|
|
|
NIS
|
|
|
THB
|
|
|
Others
|
|
|
Total
|
|
Within 1 year
|
|
3.2
|
%
|
|
96.3
|
%
|
|
0.2
|
%
|
|
0.0
|
%
|
|
0.3
|
%
|
|
100.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The Groups borrowings as at 30 June 2008 were denominated and repayable as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
HK$
|
|
|
USD
|
|
|
NIS
|
|
|
THB
|
|
|
LKR
|
|
|
Total
|
|
Within 1 year
|
|
36.1
|
%
|
|
16.5
|
%
|
|
3.9
|
%
|
|
2.8
|
%
|
|
0.5
|
%
|
|
59.8
|
%
|
In year 2
|
|
|
|
|
0.3
|
%
|
|
14.5
|
%
|
|
|
|
|
|
|
|
14.8
|
%
|
In year 3
|
|
|
|
|
|
|
|
14.5
|
%
|
|
|
|
|
|
|
|
14.5
|
%
|
In year 4
|
|
|
|
|
|
|
|
10.9
|
%
|
|
|
|
|
|
|
|
10.9
|
%
|
In year 5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
36.1
|
%
|
|
16.8
|
%
|
|
43.8
|
%
|
|
2.8
|
%
|
|
0.5
|
%
|
|
100.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As at 30 June 2008, approximately 96.6% of the Groups borrowings bear interest at floating rates and
the remaining 3.4% are at fixed rates.
|
|
|
|
|
|
|
10
|
|
Hutchison Telecommunications International Limited 2008 Interim Report
|
Group Capital Resources and Other Information
As at 30 June 2008,
¡
|
total borrowings of HK$135 million (as at 31 December 2007 HK$182 million) were guaranteed by members of the Hutchison Whampoa group in respect of loans to the
Groups Thailand operations only. Under the terms of a credit support agreement between the Company and Hutchison Whampoa group, the Company agreed to pay a guarantee fee charged at normal commercial rates. The Company has also provided a
counter-indemnity in favour of Hutchison Whampoa Limited and its related companies in respect of such guarantees for so long as there remains a guarantee liability.
|
¡
|
fixed assets and current assets of certain subsidiaries amounting to HK$2,771 million (as at 31 December 2007 HK$4,971 million) and HK$640 million (as at
31 December 2007 HK$2,398 million), respectively were used as collateral for certain credit facilities of certain subsidiaries. The current portion of borrowings of the Group was secured to the extent of HK$1,806 million (as at
31 December 2007 HK$4,600 million). No non-current portion of borrowings of the Group was secured as at 30 June 2008 (as at 31 December 2007 HK$1,807 million).
|
The non-HK dollar and non-US dollar denominated loans are mostly directly related to the Groups businesses in the countries of the currencies concerned.
Derivatives
On 1 January 2008 and as at
30 June 2008, certain forward foreign exchange contracts with notional amount of US$1,095 million and US$625 million respectively were designated as cash flow hedges of the foreign exchange risk in the Groups Thailand operations arising
from its US dollar intercompany loans from the Group.
|
|
|
|
|
Hutchison Telecommunications International Limited 2008 Interim Report
|
|
11
|
|
|
Group Capital Resources and Other Information
Capital Expenditure
The Groups capital expenditures for continuing operations in the first six months of 2007
and 2008 were as follows:
|
|
|
|
|
|
|
|
|
|
|
Capital expenditure on fixed assets
Six months ended 30 June
|
|
Capital expenditure
on other intangible assets
Six months ended 30 June
|
HK$ millions
|
|
2007
|
|
2008
|
|
2007
|
|
2008
|
Israel
|
|
364
|
|
546
|
|
1
|
|
|
Hong Kong mobile
|
|
192
|
|
229
|
|
247
|
|
271
|
Hong Kong fixed-line
|
|
185
|
|
124
|
|
14
|
|
21
|
Thailand
|
|
17
|
|
18
|
|
|
|
|
Indonesia
|
|
66
|
|
947
|
|
79
|
|
|
Others
|
|
649
|
|
278
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total capital expenditures for continuing operations
|
|
1,473
|
|
2,142
|
|
341
|
|
292
|
|
|
|
|
|
|
|
|
|
Capital expenditure on fixed assets in the first six months of 2008 was HK$2,142 million, increased from HK$1,473
million in the same period last year. Capital expenditure on fixed assets in Israel increased in part in connection with the continued build-out of Partner Communicationss transmission network. The increase in capital expenditure on fixed
assets in Indonesia operations mainly reflected the capital expenditure incurred for the network rollout. Capital expenditure on fixed assets in Hong Kong mobile also increased HK$37 million to HK$229 million, reflecting continued investment on
network upgrade and expansion to support growth in customer base. Others comprised mainly network equipment purchases in our Vietnamese and Sri Lankan operations for HK$204 million and HK$71 million respectively.
Capital expenditure on other intangible assets was comprised mainly of telecommunication licenses, customer acquisition and retention costs, brand name and customer
base. It was HK$292 million in the first six months of 2008, compared with HK$341 million in the same period last year.
Treasury Policies
The Groups overall treasury and funding policies focus on financial risk management, including interest rate and foreign exchange risks, on cost
efficient funding of the operations of its companies and prudent management of inherent and counter-party risks.
In general, financings are raised through
the Groups operating subsidiaries to meet their respective funding requirements. For overseas operations, which consist of non-Hong Kong dollar and non-US dollar assets, the Group generally endeavours to hedge its foreign currency positions
with the appropriate level of borrowings in those same currencies. For transactions directly related to the underlying businesses, forward foreign exchange contracts and interest rate and currency swaps may be utilised when suitable opportunities
arise. The use of derivative instruments is strictly controlled and solely for management of the Groups interest rate and foreign currency exchange rate exposures in connection with its borrowings. It is the Groups policy not to enter
into derivative transactions for speculative purposes.
Long-term surplus funds are to be managed in a prudent manner, usually in the form of bank deposits
with banks or financial institutions attaining a minimum credit rating of AA-/Aa3 as assigned by Standard & Poors and Moodys to manage counterparty risk. Alternatively, surplus funds can be invested in marketable securities such
as US Treasury Bills or Commercial Papers/Certificates of Deposits issued by credit-worthy counterparties with short term ratings at A1/P1 and long-terms ratings at or above AA-/Aa3 as assigned by Standard & Poors/Moodys. The
selected counterparties and investment products must be approved by the Companys Chief Financial Officer.
|
|
|
|
|
|
|
12
|
|
Hutchison Telecommunications International Limited 2008 Interim Report
|
Group Capital Resources and Other Information
Contingent Liabilities
As at 30 June 2008, the Group had contingent liabilities in respect of the following:
(a)
|
performance guarantees amounting to HK$60 million (as at 31 December 2007 - HK$60 million).
|
(b)
|
a total of 16 claims (as at 31 December 2007 - 12) against the Groups subsidiary in Israel, Partner Communications, and, in some such claims, together with other cellular
operators in Israel, each with a motion to certify as class action, in respect of the following:
|
|
|
|
|
|
|
|
Amount of claim
|
In approximate HK$ millions
|
|
As at
31 December
2007
|
|
As at
30 June
2008
|
Alleged violation of antitrust law
|
|
238
|
|
277
|
Alleged consumer complaints
|
|
5,025
|
|
2,490
|
Alleged unauthorised erection of cellular antennas, causing environmental damages
|
|
1,980
|
|
2,310
|
|
|
|
|
|
At this stage, and until the claims are recognised as class actions, the Company and Partner
Communications are unable to evaluate the probability of success of such claims, and therefore no provision has been made.
(c)
|
potential claim of approximately NIS 42.5 million (approximately HK$98 million) by the Ministry of Communications in Israel (the MOC) in respect of the past use of
certain frequency band by Partner Communications pursuant to an agreement made between Partner Communications and the Palestinian mobile operator being allocated such frequency band, which agreement was endorsed by the MOC.
|
Subsequent Event
On 11 July 2008, the Group completed its
disposal of the indirect interests in the Ghana operations and the Group is expected to realise a gain of approximately HK$295 million.
Purchase, Sale
or Redemption of the Companys Listed Securities
During the six months ended 30 June 2008, neither the Company nor any of its subsidiaries
has purchased or sold any of the Companys listed securities. In addition, the Company has not redeemed any of its listed securities during the period.
Staff
At the end of June 2008, Hutchison Telecom had approximately 9,700 dedicated staff contributing to the Groups operational
excellence. Our staff members come from diverse cultural background with varied expertise and local market insights and experience. Hutchison Telecom promotes synergies and competence sharing among its global staff force. Staff members of the Group
are exposed to ample opportunities to exchange best practice and collaborate on strategic planning and initiatives, greatly broadening their horizon and personal and career development.
Each operation devises its own training and development programmes to meet specific market challenges.
|
|
|
|
|
Hutchison Telecommunications International Limited 2008 Interim Report
|
|
13
|
|
|
Group Capital Resources and Other Information
Unaudited Key Performance Indicators for Second Quarter 2008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Customer Base
|
|
Q2 2008
30 June 2008
|
|
Q1 2008
31 March 2008
|
|
Q4 2007
31 December 2007
|
|
Q3 2007
30 September 2007
|
|
Q2 2007
30 June 2007
|
Market
|
|
Total
(000)
|
|
Postpaid
(000)
|
|
Prepaid
(000)
|
|
Total
(000)
|
|
Postpaid
(000)
|
|
Prepaid
(000)
|
|
Total
(000)
|
|
Postpaid
(000)
|
|
Prepaid
(000)
|
|
Total
(000)
|
|
Postpaid
(000)
|
|
Prepaid
(000)
|
|
Total
(000)
|
|
Postpaid
(000)
|
|
Prepaid
(000)
|
Hong Kong (incl Macau)
|
|
2,595
|
|
1,720
|
|
875
|
|
2,515
|
|
1,698
|
|
817
|
|
2,427
|
|
1,671
|
|
756
|
|
2,290
|
|
1,629
|
|
661
|
|
2,239
|
|
1,590
|
|
649
|
Indonesia
|
|
3,203
|
|
7
|
|
3,196
|
|
2,331
|
|
4
|
|
2,327
|
|
2,039
|
|
3
|
|
2,036
|
|
1,627
|
|
2
|
|
1,625
|
|
|
|
|
|
|
Israel
|
|
2,856
|
|
2,135
|
|
721
|
|
2,823
|
|
2,108
|
|
715
|
|
2,860
|
|
2,068
|
|
792
|
|
2,796
|
|
2,004
|
|
792
|
|
2,733
|
|
1,952
|
|
781
|
Sri Lanka
(#)
|
|
1,291
|
|
|
|
1,291
|
|
1,289
|
|
|
|
1,289
|
|
1,141
|
|
|
|
1,141
|
|
1,002
|
|
|
|
1,002
|
|
819
|
|
|
|
819
|
Thailand
|
|
1,117
|
|
418
|
|
699
|
|
1,071
|
|
405
|
|
666
|
|
978
|
|
372
|
|
606
|
|
884
|
|
346
|
|
538
|
|
796
|
|
317
|
|
479
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
(#)
|
|
11,062
|
|
|
|
|
|
10,029
|
|
|
|
|
|
9,445
|
|
|
|
|
|
8,599
|
|
|
|
|
|
6,587
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(#)
|
The customer base for Sri Lanka is expected to be revised
downward substantially in Q3 2008; see discussion of Sri Lanka on page 3 of the Companys announcement on the unaudited key performance indicators for the second quarter dated 19 August 2008.
|
Notes:
(1)
|
A customer is defined as a Postpaid Customer or a Prepaid Customer who has a Subscriber Identity Module (SIM) or Universal Subscriber Identity Module
(USIM) that has access to the network for any purpose, including voice, data or video services.
|
(2)
|
Postpaid Customers are defined as those whose mobile telecommunications service usage is paid in arrears upon receipt of the mobile telecommunications operators invoice and
who have not been temporarily or permanently suspended from service.
|
(3)
|
Prepaid Customers are defined as customers with prepaid SIM cards or prepaid USIM cards that have been activated but not been used up or expired at period end. A new prepaid
customer is recognised upon making the first call or registration/activation.
|
(4)
|
All numbers quoted on the basis of the total customer base of the operation irrespective of the Companys ownership percentage.
|
(5)
|
All numbers quoted as at last day of the quarter.
|
(6)
|
The data for Hong Kong and Israel relate to both 2G and 3G services.
|
(7)
|
The data for Ghana and Vietnam are excluded.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ARPU
1
|
|
|
|
Q2 2008
30 June 2008
|
|
Q1 2008
31 March 2008
|
|
Q4 2007
31 December 2007
|
|
Q3 2007
30 September 2007
|
|
Q2 2007
30 June 2007
|
Market
|
|
Currency
|
|
Blended
|
|
Postpaid
|
|
Prepaid
|
|
Blended
|
|
Postpaid
|
|
Prepaid
|
|
Blended
|
|
Postpaid
|
|
Prepaid
|
|
Blended
|
|
Postpaid
|
|
Prepaid
|
|
Blended
|
|
Postpaid
|
|
Prepaid
|
Hong Kong (incl Macau)
|
|
HKD
|
|
148
|
|
210
|
|
24
|
|
149
|
|
208
|
|
24
|
|
161
|
|
218
|
|
28
|
|
162
|
|
216
|
|
29
|
|
160
|
|
214
|
|
27
|
Indonesia
|
|
IDR (000)
|
|
12
|
|
108
|
|
12
|
|
14
|
|
120
|
|
14
|
|
15
|
|
114
|
|
15
|
|
|
|
|
|
|
|
|
|
|
|
|
Israel
|
|
NIS
|
|
158
|
|
X
|
|
X
|
|
155
|
|
X
|
|
X
|
|
157
|
|
X
|
|
X
|
|
165
|
|
X
|
|
X
|
|
157
|
|
X
|
|
X
|
Sri Lanka
|
|
LKR
|
|
163
|
|
|
|
163
|
|
193
|
|
|
|
193
|
|
242
|
|
|
|
242
|
|
287
|
|
|
|
287
|
|
311
|
|
|
|
311
|
Thailand
|
|
THB
|
|
386
|
|
784
|
|
147
|
|
405
|
|
808
|
|
157
|
|
417
|
|
813
|
|
165
|
|
434
|
|
815
|
|
183
|
|
463
|
|
843
|
|
200
|
Notes:
(1)
|
The monthly Average Revenue Per User (ARPU) is calculated as the total Service Revenues for the month divided by the simple average number of activated customers for
the month. The monthly ARPU for the quarter represents the average of the monthly ARPU in the quarter.
|
(2)
|
Service Revenues are defined as the direct recurring service revenues plus roaming revenues.
|
(3)
|
The data for Hong Kong and Israel relate to both 2G and 3G services.
|
(4)
|
The data for Ghana and Vietnam are excluded.
|
|
|
|
|
|
|
|
14
|
|
Hutchison Telecommunications International Limited 2008 Interim Report
|
Group Capital Resources and Other Information
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
MOU
1
|
|
Q2 2008
30 June 2008
|
|
|
Q1 2008
31 March 2008
|
|
|
Q4 2007
31 December 2007
|
|
|
Q3 2007
30 September 2007
|
|
|
Q2 2007
30 June 2007
|
|
Market
|
|
Blended
|
|
|
Postpaid
|
|
|
Prepaid
|
|
|
Blended
|
|
|
Postpaid
|
|
|
Prepaid
|
|
|
Blended
|
|
|
Postpaid
|
|
|
Prepaid
|
|
|
Blended
|
|
|
Postpaid
|
|
|
Prepaid
|
|
|
Blended
|
|
|
Postpaid
|
|
|
Prepaid
|
|
Hong Kong (incl Macau)
|
|
462
|
|
|
672
|
|
|
42
|
|
|
461
|
|
|
655
|
|
|
43
|
|
|
491
|
|
|
680
|
|
|
49
|
|
|
506
|
|
|
691
|
|
|
51
|
|
|
490
|
|
|
673
|
|
|
47
|
|
Indonesia
|
|
82
|
|
|
117
|
|
|
82
|
|
|
94
|
|
|
104
|
|
|
94
|
|
|
83
|
|
|
59
|
|
|
83
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Israel
|
|
368
|
|
|
X
|
|
|
X
|
|
|
359
|
|
|
X
|
|
|
X
|
|
|
345
|
|
|
X
|
|
|
X
|
|
|
343
|
|
|
X
|
|
|
X
|
|
|
331
|
|
|
X
|
|
|
X
|
|
Sri Lanka
|
|
54
|
|
|
|
|
|
54
|
|
|
60
|
|
|
|
|
|
60
|
|
|
69
|
|
|
|
|
|
69
|
|
|
81
|
|
|
|
|
|
81
|
|
|
93
|
|
|
|
|
|
93
|
|
Thailand
|
|
607
|
|
|
1,086
|
|
|
319
|
|
|
632
|
|
|
1,134
|
|
|
324
|
|
|
643
|
|
|
1,110
|
|
|
347
|
|
|
648
|
|
|
1,088
|
|
|
358
|
|
|
638
|
|
|
990
|
|
|
393
|
|
|
Notes:
(1) The monthly Minutes of Use (MOU) is calculated as the total minutes carried over the
network (2G total airtime usage + 3G voice and video usage, but excluding inbound on-net minutes) for the month divided by the simple average number of activated customers for the month. The monthly MOU for the quarter represents the average of the
monthly MOU in the quarter.
(2) The data for Hong Kong and Israel relate to both 2G and 3G services.
(3) The data for Ghana and Vietnam are excluded.
|
|
|
|
|
|
|
|
Churn
1
|
|
Q2 2008
30 June 2008
|
|
|
Q1 2008
31 March 2008
|
|
|
Q4 2007
31 December 2007
|
|
|
Q3 2007
30 September 2007
|
|
|
Q2 2007
30 June 2007
|
|
Market
|
|
Blended
|
|
|
Postpaid
|
|
|
Prepaid
|
|
|
Blended
|
|
|
Postpaid
|
|
|
Prepaid
|
|
|
Blended
|
|
|
Postpaid
|
|
|
Prepaid
|
|
|
Blended
|
|
|
Postpaid
|
|
|
Prepaid
|
|
|
Blended
|
|
|
Postpaid
|
|
|
Prepaid
|
|
Hong Kong (incl Macau)
|
|
4.0
|
%
|
|
1.8
|
%
|
|
8.0
|
%
|
|
3.5
|
%
|
|
1.8
|
%
|
|
6.7
|
%
|
|
3.3
|
%
|
|
1.8
|
%
|
|
6.2
|
%
|
|
3.9
|
%
|
|
1.8
|
%
|
|
8.2
|
%
|
|
3.7
|
%
|
|
1.7
|
%
|
|
7.7
|
%
|
Indonesia
|
|
15.6
|
%
|
|
7.9
|
%
|
|
15.6
|
%
|
|
17.6
|
%
|
|
11.0
|
%
|
|
17.6
|
%
|
|
17.7
|
%
|
|
16.3
|
%
|
|
17.7
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Israel
|
|
1.3
|
%
|
|
X
|
|
|
X
|
|
|
1.7
|
%
|
|
X
|
|
|
X
|
|
|
1.3
|
%
|
|
X
|
|
|
X
|
|
|
1.1
|
%
|
|
X
|
|
|
X
|
|
|
1.2
|
%
|
|
X
|
|
|
X
|
|
Sri Lanka
|
|
3.8
|
%
|
|
|
|
|
3.8
|
%
|
|
2.9
|
%
|
|
|
|
|
2.9
|
%
|
|
2.4
|
%
|
|
|
|
|
2.4
|
%
|
|
2.2
|
%
|
|
|
|
|
2.2
|
%
|
|
2.8
|
%
|
|
|
|
|
2.8
|
%
|
Thailand
|
|
6.0
|
%
|
|
2.9
|
%
|
|
7.8
|
%
|
|
5.8
|
%
|
|
2.7
|
%
|
|
7.8
|
%
|
|
5.2
|
%
|
|
2.8
|
%
|
|
6.8
|
%
|
|
5.5
|
%
|
|
3.4
|
%
|
|
6.9
|
%
|
|
6.5
|
%
|
|
3.9
|
%
|
|
8.2
|
%
|
Notes:
(1)
|
The monthly churn % is calculated as the average number of disconnections (net of reconnection and internal migration between networks) for the month divided by the simple
average number of activated customers for the month. The monthly churn % for the quarter represents the average of the monthly churn rates in the quarter.
|
(2)
|
The data for Hong Kong and Israel relate to both 2G and 3G services.
|
(3)
|
The data for Ghana and Vietnam are excluded.
|
The Board wishes to
remind investors that the above key performance indicators are based on the Groups unaudited internal records. Investors are cautioned not to unduly rely on such data.
|
|
|
|
|
Hutchison Telecommunications International Limited 2008 Interim Report
|
|
15
|
|
|
Disclosure of Interests
Directors and Chief Executives Interests and Short Positions in Shares, Underlying Shares and Debentures
As at 30 June 2008, the interests and short positions of the Directors and chief executive of the Company in the shares, underlying shares in and debentures of the Company or any of its associated corporations (within the meaning of
Part XV of the Securities and Futures Ordinance (the SFO)) which had been notified to the Company and The Stock Exchange of Hong Kong Limited (the Stock Exchange) pursuant to Divisions 7 and 8 of Part XV of the SFO (including
interests and short positions which they were taken or deemed to have under such provisions of the SFO) as recorded in the register required to be kept by the Company pursuant to Section 352 of the SFO, or as otherwise notified to the Company
and the Stock Exchange pursuant to the Model Code for Securities Transactions by Directors of Listed Issuers contained in the Listing Rules adopted by the Company (the Model Code) were as follows:
(I)
|
Interests and Short Positions in the Shares, Underlying Shares in and Debentures of the Company
|
Long Positions in the Shares and Underlying Shares in the Company
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of underlying
shares held
|
|
|
|
Name of Director /
Alternate Director
|
|
Capacity
|
|
Nature of
interests
|
|
Number of
shares held
|
|
in American
Depositary
Shares
|
|
in share
options
|
|
Approximate
% of
shareholding
|
|
Fok Kin-ning, Canning
|
|
Interest of a controlled corporation
|
|
Corporate interest
|
|
1,202,380
(Note 1)
|
|
|
|
|
|
0.0251
|
%
|
|
|
|
|
|
|
|
Chow Woo Mo Fong, Susan
|
|
Beneficial owner
|
|
Personal interest
|
|
250,000
|
|
|
|
|
|
0.0052
|
%
|
|
|
|
|
|
|
|
Frank John Sixt
|
|
Beneficial owner
|
|
Personal interest
|
|
|
|
255,000
(Note 2)
|
|
|
|
0.0053
|
%
|
|
|
|
|
|
|
|
Lui Dennis Pok Man
|
|
Beneficial owner
|
|
Personal interest
|
|
100,000
|
|
|
|
9,000,000
(Note 3)
|
|
0.1901
|
%
|
|
|
|
|
|
|
|
Tim Lincoln Pennington
(Note 4)
|
|
Beneficial owner
|
|
Personal interest
|
|
1,667,000
|
|
|
|
1,666,666
(Note 3)
|
|
0.0697
|
%
|
|
|
|
|
|
|
|
Chan Ting Yu
|
|
Beneficial owner
|
|
Personal interest
|
|
100,000
|
|
|
|
3,333,333
(Note 3)
|
|
0.0717
|
%
|
|
|
|
|
|
|
|
Wong King Fai, Peter
(Note 5)
|
|
Beneficial owner
|
|
Personal interest
|
|
|
|
|
|
2,666,667
(Note 3)
|
|
0.0557
|
%
|
|
|
|
|
|
|
|
John W Stanton
|
|
Interest held jointly with spouse
|
|
Other interest
|
|
|
|
105,000
(Note 6)
|
|
|
|
0.0022
|
%
|
|
|
|
|
|
|
|
Woo Chiu Man, Cliff
|
|
Beneficial owner
|
|
Personal interest
|
|
|
|
|
|
2,333,333
(Note 3)
|
|
0.0488
|
%
|
Notes:
1.
|
Such ordinary shares were held by a company which is equally controlled by Mr Fok Kin-ning, Canning and his spouse.
|
2.
|
17,000 American Depositary Shares (each representing 15 ordinary shares in the Company) were held by Mr Frank John Sixt.
|
3.
|
Such interests are directors interests in underlying shares in respect of the share options granted under the share option scheme of the Company, the details of which are
set out in the section entitled Share Option Scheme of the Company on pages 20 to 21.
|
4.
|
Mr Tim Lincoln Pennington has tendered his resignation as a director of the Company with effect from 20 August 2008.
|
5.
|
Mr Wong King Fai, Peter was appointed as a director of the Company on 3 January 2008.
|
6.
|
7,000 American Depositary Shares (each representing 15 ordinary shares in the Company) were held jointly by Mr John W Stanton and his spouse.
|
|
|
|
|
|
|
|
16
|
|
Hutchison Telecommunications International Limited 2008 Interim Report
|
Disclosure of Interests
(II)
|
Interests and Short Positions in the Shares, Underlying Shares in and Debentures of the Associated Corporations of the Company
|
Long Positions in the Shares, Underlying Shares in and Debentures of the Associated Corporations of the Company
Mr Fok Kin-ning, Canning had, as at 30 June 2008, the following interests:
|
(i)
|
corporate interests in 4,310,875 ordinary shares, representing approximately 0.101% of the then issued share capital, in Hutchison Whampoa Limited (HWL);
|
|
(ii)
|
5,100,000 ordinary shares, representing approximately 0.676% of the then issued share capital, in Hutchison Telecommunications (Australia) Limited (HTAL) comprising
personal and corporate interests in 4,100,000 ordinary shares and 1,000,000 ordinary shares respectively;
|
|
(iii)
|
corporate interests in 5,000,000 ordinary shares, representing approximately 0.056% of the then issued share capital, in Hutchison Harbour Ring Limited;
|
|
(iv)
|
corporate interests in 225,000 American Depositary Shares (each representing one ordinary share), representing approximately 0.143% of the then issued share capital, in Partner
Communications Company Ltd.; and
|
|
(v)
|
corporate interests in (a) a nominal amount of US$2,500,000 in the 6.50% Notes due 2013 issued by Hutchison Whampoa International (03/13) Limited; (b) a nominal
amount of US$2,000,000 in the 7.45% Notes due 2033 issued by Hutchison Whampoa International (03/33) Limited (HWI(03/33)); (c) a nominal amount of US$2,500,000 in the 5.45% Notes due 2010 issued by HWI(03/33); and (d) a
nominal amount of US$2,500,000 in the 6.25% Notes due 2014 issued by HWI(03/33).
|
Mr Fok Kin-ning, Canning held the above
personal interests in his capacity as a beneficial owner and held the above corporate interests through a company which is equally controlled by Mr Fok and his spouse.
Mrs Chow Woo Mo Fong, Susan in her capacity as a beneficial owner had, as at 30 June 2008, personal interests in 150,000 ordinary shares, representing approximately 0.0035% of the then issued share capital, in
HWL.
Mr Frank John Sixt in his capacity as a beneficial owner had, as at 30 June 2008, personal interests in (i) 50,000 ordinary
shares, representing approximately 0.001% of the then issued share capital, in HWL; and (ii) 1,000,000 ordinary shares, representing approximately 0.133% of the then issued share capital, in HTAL.
Mr Wong King Fai, Peter had, as at 30 June 2008, family interests in 22,000 ordinary shares, representing approximately 0.00052% of the then issued
share capital, in HWL held by his spouse.
|
|
|
|
|
Hutchison Telecommunications International Limited 2008 Interim Report
|
|
17
|
|
|
Disclosure of Interests
Mr John W Stanton had, as at 30 June 2008, the following interests:
|
(i)
|
2,016,500 ordinary shares, representing approximately 0.047% of the then issued share capital, in HWL held jointly with his spouse; and
|
|
(ii)
|
6,600 ordinary shares, representing approximately 0.00015% of the then issued share capital, in HWL held in his capacity as a trustee of a trust.
|
Mr Kevin Westley in his capacity as a beneficial owner had, as at 30 June 2008, personal interests in 4,000 ordinary shares, representing
approximately 0.00018% of the then issued share capital, in Cheung Kong Infrastructure Holdings Limited.
Mr Woo Chiu Man, Cliff had, as at
30 June 2008, family interests in 8,000 ordinary shares, representing approximately 0.00019% of the then issued share capital, in HWL held by his spouse.
Save as disclosed above, as at 30 June 2008, none of the Directors and chief executive of the Company and their respective associates had any interests or short positions in the shares, underlying shares in and debentures of the
Company or any of its associated corporations (within the meaning of Part XV of the SFO) which had to be notified to the Company and the Stock Exchange pursuant to Divisions 7 and 8 of Part XV of the SFO (including interests and short positions
which he/she was taken or deemed to have under such provisions of the SFO) or which were required, pursuant to Section 352 of the SFO, to be recorded in the register kept by the Company or which were required, pursuant to the Model Code, to be
notified to the Company and the Stock Exchange.
Certain Directors held qualifying shares in certain subsidiaries of the Company on trust for other
subsidiaries.
|
|
|
|
|
|
|
18
|
|
Hutchison Telecommunications International Limited 2008 Interim Report
|
Disclosure of Interests
Interests and Short Positions of Shareholders Discloseable under the SFO
So far as is known to any Directors or chief executive of the
Company, as at 30 June 2008, other than the interests and short positions of the Directors or chief executive of the Company as disclosed above, the following persons had interests or short positions in the shares or underlying shares in the
Company which would fall to be disclosed to the Company under the provisions of Divisions 2 and 3 of Part XV of the SFO as recorded in the register required to be kept by the Company under Section 336 of the SFO, or as otherwise notified to the
Company and the Stock Exchange:
Interests and Short Positions of Substantial Shareholders in the Shares and Underlying Shares in the Company
Long Positions in the Shares in the Company
|
|
|
|
|
|
|
|
Name
|
|
Capacity
|
|
Number of shares
held
|
|
Approximate %
of shareholding
|
|
Hutchison Telecommunications Investment Holdings Limited (HTIHL)
|
|
(i) Beneficial owner
(ii) Interest of a controlled corporation
|
|
2,619,929,104)
(Note 1)
)
217,476,654)
(Note 1)
)
|
|
59.28
|
%
|
|
|
|
|
Hutchison Telecommunications Group Holdings Limited (HTGHL)
|
|
Interest of controlled corporations
|
|
2,837,405,758
(Note 1)
|
|
59.28
|
%
|
|
|
|
|
Ommaney Holdings Limited (OHL)
|
|
Interest of controlled corporations
|
|
2,837,405,758
(Note 1)
|
|
59.28
|
%
|
|
|
|
|
Hutchison International Limited (HIL)
|
|
Interest of controlled corporations
|
|
2,837,405,758
(Note 1)
|
|
59.28
|
%
|
|
|
|
|
HWL
|
|
Interest of controlled corporations
|
|
2,837,405,758
(Note 1)
|
|
59.28
|
%
|
|
|
|
|
Cheung Kong (Holdings) Limited (CKH)
|
|
Interest of controlled corporations
|
|
2,889,498,345
(Note 2)
|
|
60.37
|
%
|
|
|
|
|
Li Ka-Shing Unity Trustee Company Limited (TUT1)
|
|
Trustee
|
|
2,889,498,345
(Note 3)
|
|
60.37
|
%
|
|
|
|
|
Li Ka-Shing Unity Trustee Corporation Limited (TDT1)
|
|
Trustee and beneficiary of a trust
|
|
2,889,498,345
(Note 4)
|
|
60.37
|
%
|
|
|
|
|
Li Ka-Shing Unity Trustcorp Limited (TDT2)
|
|
Trustee and beneficiary of a trust
|
|
2,889,498,345
(Note 4)
|
|
60.37
|
%
|
|
|
|
|
Li Ka-shing (Mr Li)
|
|
(i) Founder of discretionary trusts
and interest of controlled corporations
|
|
2,889,651,625)
(Note 5)
)
|
|
|
|
|
|
|
|
|
|
(ii) Interest of controlled corporations
|
|
266,621,499)
(Note 6)
)
|
|
65.94
|
%
|
|
|
|
|
Yuda Limited
|
|
Beneficial owner
|
|
266,375,953
(Note 7)
|
|
5.57
|
%
|
|
|
|
|
|
Hutchison Telecommunications International Limited 2008 Interim Report
|
|
19
|
|
|
Disclosure of Interests
Notes:
1.
|
HTIHL is a direct wholly-owned subsidiary of HTGHL, which in turn is a direct wholly-owned subsidiary of OHL, which in turn is a direct wholly-owned subsidiary of HIL, which in
turn is a direct wholly-owned subsidiary of HWL. By virtue of the SFO, HWL, HIL, OHL and HTGHL were deemed to be interested in the 2,619,929,104 ordinary shares in the Company which HTIHL had direct interest and 217,476,654 ordinary shares in the
Company held by a wholly-owned subsidiary of HTIHL.
|
2.
|
Certain subsidiary companies of CKH together hold one third or more of the issued share capital of HWL. By virtue of the above, CKH was therefore taken to have a duty of
disclosure in relation to the interest in the relevant share capital of the Company held by or in which HWL, HIL, OHL, HTGHL or HTIHL was taken as interested as a substantial shareholder of the Company under the SFO. CKH was also interested in the
share capital of the Company through certain wholly-owned subsidiary companies of CKH.
|
3.
|
TUT1, as trustee of The Li Ka-Shing Unity Trust (UT1), together with certain companies which TUT1 as trustee of UT1 was entitled to exercise or control the exercise
of one third or more of the voting power at their general meetings (related companies), hold more than one third of the issued share capital of CKH. By virtue of the above and the interest of TUT1 as trustee of UT1 and its related
companies in the shares in CKH, TUT1 as trustee of UT1 was therefore taken to have a duty of disclosure in relation to the interest in the relevant share capital of the Company held by or in which HWL, HIL, OHL, HTGHL or HTIHL was taken as
interested (together with CKHs interest in the share capital of the Company through certain wholly-owned subsidiary companies) as a substantial shareholder of the Company under the SFO.
|
4.
|
Each of TDT1 as trustee of a discretionary trust (DT1) and TDT2 as trustee of another discretionary trust (DT2) holds units in UT1. By virtue of the above
and its interest of holding units in UT1, each of TDT1 as trustee of DT1 and TDT2 as trustee of DT2 was taken to have a duty of disclosure in relation to the interest in the relevant share capital of the Company held by or in which HWL, HIL, OHL,
HTGHL or HTIHL was taken as interested (together with CKHs interest in the share capital of the Company through certain wholly-owned subsidiary companies) as a substantial shareholder of the Company under the SFO.
|
5.
|
Mr Li is the settlor of each of DT1 and DT2 and may be regarded as a founder of each of DT1 and DT2 for the purpose of the SFO. Mr Li is also interested in one third of the
entire issued share capital of a company owning the entire issued share capital of TUT1, TDT1 and TDT2. By virtue of the above and as a director of CKH, Mr Li was taken to have a duty of disclosure in relation to the interest in the relevant share
capital of the Company held by or in which HWL, HIL, OHL, HTGHL or HTIHL was taken as interested (together with CKHs interest in the share capital of the Company through certain wholly-owned subsidiary companies) as a substantial shareholder
of the Company under the SFO.
|
6.
|
Such ordinary shares were held by companies of which Mr Li is interested in the entire issued share capital.
|
7.
|
Yuda Limited is a company wholly-controlled by Mr Li. Such interest is duplicated in that of Mr Li held by one of the companies described in Note 6 above.
|
Save as disclosed above, as at 30 June 2008, there was no other person (other than the Directors and chief executive of the Company)
who had an interest or short position in the shares and underlying shares in the Company which would fall to be disclosed to the Company under the provisions of Divisions 2 and 3 of Part XV of the SFO, as recorded in the register required to be kept
by the Company under Section 336 of the SFO, or as otherwise notified to the Company and the Stock Exchange.
|
|
|
|
|
|
|
20
|
|
Hutchison Telecommunications International Limited 2008 Interim Report
|
Disclosure of Interests
Share Options and Directors Rights to Acquire Shares
The Group operates certain share option schemes. The outstanding share options
under the respective share option schemes for the six months ended 30 June 2008 are set out below.
(I)
|
Share Option Scheme of the Company
|
Particulars of
share options outstanding under the share option scheme of the Company (the Share Option Scheme) at the beginning and at the end of the financial period for the six months ended 30 June 2008 and share options granted, exercised,
lapsed or cancelled under such scheme during the period were as follows:-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Price of share
of the Company
|
Name or
category of
participants
|
|
Date of
grant of
share
options
(1)
|
|
Number
of share
options
held at
1 January
2008
|
|
|
Granted
during the
six months
ended
30 June
2008
|
|
Exercised
during the
six months
ended
30 June
2008
|
|
|
Lapsed/
cancelled
during the
six months
ended
30 June
2008
|
|
|
Number
of share
options
held at
30 June
2008
|
|
Exercise
period of
share
options
|
|
Exercise
price of
share
options
(2)
HK$
|
|
at the
grant
date of
share
options
(3)
HK$
|
|
at the
exercise
date of
share
options
(4)
HK$
|
Directors/ Alternate Directors
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Lui Dennis Pok Man
|
|
8.8.2005
|
|
9,000,000
|
|
|
|
|
|
|
|
|
|
|
9,000,000
|
|
8.8.2006 to
7.8.2015
|
|
1.95
|
|
8.60
|
|
N/A
|
Tim Lincoln Pennington
(5)
|
|
8.8.2005
|
|
3,333,333
|
|
|
|
|
(1,666,667
|
)
|
|
|
|
|
1,666,666
|
|
8.8.2006 to
7.8.2015
|
|
1.95
|
|
8.60
|
|
11.08
|
Chan Ting Yu
|
|
8.8.2005
|
|
3,333,333
|
|
|
|
|
|
|
|
|
|
|
3,333,333
|
|
8.8.2006 to
7.8.2015
|
|
1.95
|
|
8.60
|
|
N/A
|
Wong King Fai, Peter
(6)
|
|
8.8.2005
|
|
2,666,667
|
|
|
|
|
|
|
|
|
|
|
2,666,667
|
|
8.8.2006 to
7.8.2015
|
|
1.95
|
|
8.60
|
|
N/A
|
Woo Chiu Man, Cliff
|
|
8.8.2005
|
|
2,333,333
|
|
|
|
|
|
|
|
|
|
|
2,333,333
|
|
8.8.2006 to
7.8.2015
|
|
1.95
|
|
8.60
|
|
N/A
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
20,666,666
|
|
|
|
|
(1,666,667
|
)
|
|
|
|
|
18,999,999
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other employees in aggregate
|
|
8.8.2005
|
|
13,266,667
|
(7)
|
|
|
|
(2,416,667
|
)
|
|
(1,750,000
|
)
|
|
9,100,000
|
|
8.8.2006 to
7.8.2015
|
|
1.95
|
|
8.60
|
|
10.80
|
|
|
23.11.2007
|
|
13,850,000
|
|
|
|
|
|
|
|
|
|
|
13,850,000
|
|
23.11.2008 to
22.11.2017
|
|
11.51
|
|
11.26
|
|
N/A
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
|
47,783,333
|
|
|
|
|
(4,083,334
|
)
|
|
(1,750,000
|
)
|
|
41,949,999
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hutchison Telecommunications International Limited 2008 Interim Report
|
|
21
|
|
|
Disclosure of Interests
Notes:
|
1.
|
The share options will be vested according to a schedule, namely, as to as close to one-third of the shares of the Company which are subject to the share options as possible by
each of the three anniversaries of the date of offer of the share options and provided that for the vesting to occur the grantee has to remain an Eligible Participant (as defined in the Share Option Scheme) on such vesting date.
|
|
2.
|
The exercise price of the share options is subject to adjustment in accordance with the provisions of the Share Option Scheme (as amended).
|
|
3.
|
The stated price was the Stock Exchange closing price of the shares of the Company on the trading day immediately prior to the date of the grant of the share options.
|
|
4.
|
The stated price was the weighted average closing price of the shares of the Company immediately before the dates on which the share options were exercised.
|
|
5.
|
Mr Tim Lincoln Pennington has tendered his resignation as a director of the Company with effect from 20 August 2008.
|
|
6.
|
Mr Wong King Fai, Peter was appointed as a director of the Company on 3 January 2008.
|
|
7.
|
The number of share options is exclusive of those options held by Mr Wong King Fai, Peter which are disclosed under the category of Directors in this section.
|
As at 30 June 2008, the Company had 41,949,999 share options outstanding under the Share Option Scheme.
No share option had been granted under the Share Option Scheme during the six months ended 30 June 2008.
(II)
|
Employee Stock Option Plans of Partner Communications Company Ltd.
|
2004 Share Option Plan
The 2004 Share Option Plan (as amended on 1 March 2006 and 25 June
2008) (the 2004 Plan) was approved by the board of directors of Partner Communications Company Ltd. (Partner Communications) in July 2004 and further approved for adoption by shareholders of the Company at the annual general
meeting held on 16 May 2006. The 2004 Plan will remain in force for 10 years from its adoption on 12 July 2004.
1998 Employee
Stock Option Plan, 2000 Employee Stock Option Plan and 2003 Amended Plan
The 1998 Employee Stock Option Plan (the 1998
Plan) and 2000 Employee Stock Option Plan (the 2000 Plan) were adopted by Partner Communications in 1998 and 2000 respectively. Until November 2003, Partner Communications granted share options to senior managers and other
employees pursuant to the 1998 Plan and the 2000 Plan. In November 2003, the 1998 Plan and the 2000 Plan were amended to conform with the changes in the Israeli Income Tax Ordinance (New Version), 1961. As a result, any grant of share options after
November 2003 would be subject to the terms of the 2000 Plan as so amended, referred to as the 2003 Amended Plan. Share options granted under the 1998 Plan, the 2000 Plan and 2003 Amended Plan, which were approved by Partner Communications prior to
Partner Communications becoming a subsidiary of the Company in April 2005, will remain valid but no further grant of share options will be made under the said three plans without the board of directors of Partner Communications approving relevant
amendments being made necessary by the changes in Israeli laws and other regulatory requirements, as applicable and until they are approved by shareholders of the Company and Hutchison Whampoa Limited respectively. On 26 March 2008, the board
of directors of Partner Communications approved the termination of the 1998 Plan, the 2000 Plan and 2003 Amended Plan. Since then, no further share options will be granted under these three plans, and all outstanding share options thereunder will
remain valid and bear all terms and conditions of the relevant option plans.
|
|
|
|
|
|
|
22
|
|
Hutchison Telecommunications International Limited 2008 Interim Report
|
Disclosure of Interests
Details of the movement of share options outstanding under the four employee stock option plans of Partner Communications during the six months ended 30 June 2008 are as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Lapsed/
cancelled
during the
six months
ended
30 June
2008
|
|
|
|
|
|
|
|
|
Price of Partner
Communications share
|
Name or
category of
participants
|
|
Date of
grant of
share
options
(1)
|
|
Number of
share options
held at
1 January
2008
|
|
Granted
during the
six months
ended
30 June
2008
|
|
Exercised
during the
six months
ended
30 June
2008
|
|
|
|
Number
of share
options
held at
30 June
2008
(1)
|
|
Exercise
period
of
share
options
(2)
|
|
Exercise
price
of
share
options
US$/NIS
|
|
at the
grant date
of share
options
(3)
NIS
|
|
at the
exercise
date
of
share
options
(4)
NIS
|
Employees in aggregate
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1998 Plan
|
|
5.11.1998 to
22.12.2002
|
|
3,386
|
|
|
|
(3,383
|
)
|
|
(3
|
)
|
|
|
|
5.11.1999 to
15.12.2011
|
|
US$0.343 and
NIS 20.45
|
|
0.01
|
|
76.16
|
|
|
|
|
|
|
|
|
|
|
|
2000 Plan
|
|
3.11.2000 to
30.12.2003
|
|
193,500
|
|
|
|
(7,500
|
)
|
|
|
|
|
186,000
|
|
3.11.2000 to
30.12.2012
|
|
NIS 17.25 to
NIS 27.35
|
|
17.25 to
27.35
|
|
82.69
|
|
|
|
|
|
|
|
|
|
|
|
2003
|
|
30.12.2003
|
|
|
|
|
|
|
|
|
|
|
|
|
|
N/A
|
|
NIS 20.45
|
|
34.12
|
|
N/A
|
|
|
|
|
|
|
|
|
|
|
|
Amended Plan
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2004 Plan
|
|
29.11.2004 to
19.2.2008
|
|
2,666,932
|
|
76,000
|
|
(197,100
|
)
|
|
(117,514
|
)
|
|
2,428,318
|
|
29.11.2004 to
19.2.2018
|
|
NIS 26.74 to
NIS 66.05
|
|
31.45 to
78.90
|
|
79.05
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
|
2,863,818
|
|
76,000
|
|
(207,983
|
)
|
|
(117,517
|
)
|
|
2,614,318
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Notes:
|
1.
|
The number of share options disclosed is the aggregate figure of share options held at 30 June 2008 under each of the four employee stock option plans. The share options
were granted on various date(s) during the corresponding period(s) and in respect of the 2003 Amended Plan, on the date of grant as disclosed.
|
|
2.
|
Subject to the terms of individual stock option plans, vesting schedules are in general: 25% of the share options become vested on each of the first, second, third and fourth
anniversaries of the date of employment of the grantee or date of grant, unless otherwise specified by the Compensation Committee of Partner Communications.
|
|
3.
|
The stated price was the average closing price of Partner Communications shares as recorded by the Tel Aviv Stock Exchange 30 days prior to the date of grant of share
options.
|
|
4.
|
The stated price was the weighted average closing price of Partner Communications shares immediately before the dates on which the share options were exercised.
|
As at 30 June 2008, Partner Communications had in aggregate 2,614,318 share options outstanding under the four employee
stock option plans.
The fair value of share options granted during the six months ended 30 June 2008 was determined using the
Black-Scholes valuation model. The significant inputs into the model were standard deviation of expected share price returns of 24%, weighted average dividend yield of 6.21%, expected life of share options of three years and annual risk-free
interest rate of 4.25%. The volatility measured at the standard deviation of expected share price returns is based on statistical analysis of daily share prices over three years immediately preceding the grant date. Changes in such subjective input
assumptions could affect the fair value estimate.
|
|
|
|
|
Hutchison Telecommunications International Limited 2008 Interim Report
|
|
23
|
|
|
Corporate Governance
The Company is committed to achieving and maintaining the highest standards of corporate governance. The Board considers that effective corporate governance practices are essential to enhancing shareholder value and
protecting stakeholder interests. Accordingly, the Board attributes a high priority to identifying and implementing appropriate corporate governance practices to ensure effective internal controls, transparency and accountability to all
stakeholders.
Compliance with the Code on Corporate Governance Practices
The Company is fully compliant with all code provisions of the Code on Corporate Governance Practices in Appendix 14 of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (the
Listing Rules) throughout the six months ended 30 June 2008. Corporate governance practices adopted by the Company during such period are in conformity with those adopted by the Company for the year ended 31 December 2007, which
were set out in the 2007 Annual Report of the Company.
Securities Transactions
The Board has adopted the Model Code for Securities Transactions by Directors of Listed Issuers of the Listing Rules (the Model Code) which is supplemented by the Securities Trading Policy as the
Groups code of conduct regarding Directors securities transactions. The Securities Trading Policy also applies to all personnel of the Company and its subsidiaries and all transactions in the Companys securities. All Directors of
the Company confirmed that they have complied with both the Model Code and the Securities Trading Policy in their securities transactions throughout the accounting period covered by this interim report.
Audit Committee
The Audit Committee of the Company comprises the
three Independent Non-executive Directors: Messrs Kevin Westley, John Stanton and Kwan Kai Cheong, chaired by Mr Westley. All committee members possess appropriate business and financial management experience and skills to understand financial
statements and internal controls. In addition, the Audit Committee is authorised to obtain outside legal or other independent professional advice and to secure the assistance of outsiders with relevant experience and expertise if it considers
necessary. The Audit Committee meets regularly with management and the external auditor of the Company and reviews matters relating to audit, accounting and financial statements as well as internal control, risk evaluation and general compliance of
the Group and reports directly to the Board. The terms of reference of the Audit Committee adopted by the Board are published on the Companys website. The Groups unaudited condensed consolidated interim accounts for the six months ended
30 June 2008 have been reviewed and endorsed by the Audit Committee.
Remuneration Committee
The Remuneration Committee of the Company comprises three members with expertise in human resources and personnel emoluments. The Committee is chaired by the Chairman, Mr
Fok Kin-ning, Canning with Messrs Kwan Kai Cheong and Kevin Westley, both Independent Non-executive Directors, as members. The Committee is charged with the responsibility of assisting the Board in achieving its objective of attracting, retaining
and motivating people of the highest calibre and experience needed to develop and implement the Groups strategy taking into consideration its substantial international operations. It is also responsible for the development and administration
of a fair and transparent procedure for setting policies on the remuneration of Directors and senior management of the Company and for determining their remuneration packages. The terms of reference of the Committee adopted by the Board are
published on the Companys website.
|
|
|
|
|
|
|
24
|
|
Hutchison Telecommunications International Limited 2008 Interim Report
|
Report on Review of Interim Financial Report
To the Board of Directors of Hutchison Telecommunications International Limited
(incorporated in the Cayman Islands with limited liability)
Introduction
We have reviewed the interim financial report set out on pages 25 to 52, which comprises the condensed consolidated balance sheet of Hutchison Telecommunications
International Limited (the Company) and its subsidiaries (together, the Group) as at 30 June 2008 and the related condensed consolidated profit and loss account, condensed consolidated statement of recognised
income and expense and condensed consolidated cash flow statement for the six-month period then ended and a summary of significant accounting policies and other explanatory notes. The Rules Governing the Listing of Securities on the Main Board of
The Stock Exchange of Hong Kong Limited require the preparation of a report on interim financial report to be in compliance with the relevant provisions thereof and International Accounting Standard 34 Interim Financial Reporting. The
directors of the Company are responsible for the preparation and presentation of this interim financial report in accordance with International Accounting Standard 34 Interim Financial Reporting. Our responsibility is to express a
conclusion on this interim financial report based on our review and to report our conclusion solely to you, as a body, in accordance with our agreed terms of engagement and for no other purpose. We do not assume responsibility towards or accept
liability to any other person for the contents of this report.
Scope of Review
We conducted our review in accordance with International Standard on Review Engagements 2410, Review of Interim Financial Information Performed by the Independent Auditor of the Entity. A review of interim
financial report consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance
with International Standards on Auditing and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention
that causes us to believe that the interim financial report is not prepared, in all material respects, in accordance with International Accounting Standard 34 Interim Financial Reporting.
PricewaterhouseCoopers
Certified Public Accountants
Hong Kong, 19 August 2008
|
|
|
|
|
Hutchison Telecommunications International Limited 2008 Interim Report
|
|
25
|
|
|
Condensed Consolidated Profit and Loss Account
For the six months ended 30 June
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Note
|
|
Unaudited
2007
HK$ millions
|
|
|
Unaudited
2008
HK$ millions
|
|
|
Unaudited
2008
US$ millions
|
|
|
|
|
|
|
|
|
|
|
|
(Note 32)
|
|
Continuing operations:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Turnover
|
|
5
|
|
|
9,639
|
|
|
|
11,760
|
|
|
|
1,508
|
|
Cost of inventories sold
|
|
|
|
|
(1,144
|
)
|
|
|
(1,342
|
)
|
|
|
(172
|
)
|
Staff costs
|
|
|
|
|
(1,001
|
)
|
|
|
(1,229
|
)
|
|
|
(158
|
)
|
Depreciation and amortisation
|
|
|
|
|
(1,982
|
)
|
|
|
(2,406
|
)
|
|
|
(309
|
)
|
Other operating expenses
|
|
|
|
|
(4,684
|
)
|
|
|
(5,966
|
)
|
|
|
(765
|
)
|
Profit on disposal of investments and others, net
|
|
7
|
|
|
4
|
|
|
|
1,464
|
|
|
|
188
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating profit
|
|
|
|
|
832
|
|
|
|
2,281
|
|
|
|
292
|
|
Interest income
|
|
8
|
|
|
628
|
|
|
|
632
|
|
|
|
81
|
|
Interest and other finance costs
|
|
8
|
|
|
(797
|
)
|
|
|
(516
|
)
|
|
|
(66
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Profit before taxation
|
|
|
|
|
663
|
|
|
|
2,397
|
|
|
|
307
|
|
Taxation
|
|
9
|
|
|
(322
|
)
|
|
|
(434
|
)
|
|
|
(56
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Profit for the period from continuing operations
|
|
|
|
|
341
|
|
|
|
1,963
|
|
|
|
251
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Discontinued operations:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Profit from discontinued operations
|
|
10
|
|
|
70,502
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Profit for the period
|
|
|
|
|
70,843
|
|
|
|
1,963
|
|
|
|
251
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Attributable to:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity holders of the Company:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
continuing operations
|
|
|
|
|
57
|
|
|
|
1,165
|
|
|
|
149
|
|
discontinued operations
|
|
|
|
|
70,031
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
70,088
|
|
|
|
1,165
|
|
|
|
149
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Minority interest:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
continuing operations
|
|
|
|
|
284
|
|
|
|
798
|
|
|
|
102
|
|
discontinued operations
|
|
|
|
|
471
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
755
|
|
|
|
798
|
|
|
|
102
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
70,843
|
|
|
|
1,963
|
|
|
|
251
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividend
|
|
11
|
|
|
32,234
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share from continuing operations attributable to equity holders of the Company:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
basic
|
|
12
|
|
HK$
|
0.01
|
|
|
HK$
|
0.24
|
|
|
US$
|
0.03
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
diluted
|
|
12
|
|
HK$
|
0.01
|
|
|
HK$
|
0.24
|
|
|
US$
|
0.03
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share attributable to equity holders of the Company:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
basic
|
|
12
|
|
HK$
|
14.69
|
|
|
HK$
|
0.24
|
|
|
US$
|
0.03
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
diluted
|
|
12
|
|
HK$
|
14.59
|
|
|
HK$
|
0.24
|
|
|
US$
|
0.03
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The accompanying notes are an integral part of these condensed consolidated interim accounts.
|
|
|
|
|
|
|
26
|
|
Hutchison Telecommunications International Limited 2008 Interim Report
|
Condensed Consolidated Balance Sheet
|
|
|
|
|
|
|
|
|
|
|
Note
|
|
Audited
As at
31 December
2007
HK$ millions
|
|
Unaudited
As at
30 June
2008
HK$ millions
|
|
Unaudited
As at
30 June
2008
US$ millions
|
|
|
|
|
|
|
|
|
(Note 32)
|
ASSETS
|
|
|
|
|
|
|
|
|
Current assets
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
13
|
|
36,611
|
|
37,234
|
|
4,775
|
Trade and other receivables
|
|
14
|
|
4,702
|
|
5,508
|
|
707
|
Stocks
|
|
|
|
515
|
|
468
|
|
60
|
Derivative financial assets
|
|
15(a)
|
|
25
|
|
109
|
|
14
|
|
|
|
|
|
|
|
|
|
Total current assets
|
|
|
|
41,853
|
|
43,319
|
|
5,556
|
|
|
|
|
|
|
|
|
|
Assets held for sale
|
|
16
|
|
|
|
504
|
|
65
|
|
|
|
|
|
|
|
|
|
Non-current assets
|
|
|
|
|
|
|
|
|
Fixed assets
|
|
17
|
|
16,950
|
|
17,385
|
|
2,230
|
Goodwill
|
|
18
|
|
6,070
|
|
6,342
|
|
813
|
Other intangible assets
|
|
19
|
|
7,818
|
|
8,214
|
|
1,053
|
Other non-current assets
|
|
20
|
|
3,354
|
|
3,466
|
|
446
|
Deferred tax assets
|
|
|
|
376
|
|
377
|
|
48
|
Interests in associates
|
|
|
|
2
|
|
2
|
|
|
Interest in a jointly controlled entity
|
|
|
|
|
|
18
|
|
2
|
|
|
|
|
|
|
|
|
|
Total non-current assets
|
|
|
|
34,570
|
|
35,804
|
|
4,592
|
|
|
|
|
|
|
|
|
|
Total assets
|
|
|
|
76,423
|
|
79,627
|
|
10,213
|
|
|
|
|
|
|
|
|
|
LIABILITIES
|
|
|
|
|
|
|
|
|
Current liabilities
|
|
|
|
|
|
|
|
|
Trade and other payables
|
|
21
|
|
7,902
|
|
8,469
|
|
1,086
|
Borrowings
|
|
22
|
|
5,083
|
|
6,737
|
|
864
|
Current income tax liabilities
|
|
|
|
111
|
|
132
|
|
17
|
Derivative financial liabilities
|
|
15(b)
|
|
119
|
|
134
|
|
17
|
|
|
|
|
|
|
|
|
|
Total current liabilities
|
|
|
|
13,215
|
|
15,472
|
|
1,984
|
|
|
|
|
|
|
|
|
|
Liabilities associated with assets held for sale
|
|
16
|
|
|
|
140
|
|
18
|
|
|
|
|
|
|
|
|
|
Non-current liabilities
|
|
|
|
|
|
|
|
|
Borrowings
|
|
22
|
|
5,937
|
|
4,532
|
|
581
|
Deferred tax liabilities
|
|
|
|
584
|
|
622
|
|
80
|
Other non-current liabilities
|
|
23
|
|
2,551
|
|
2,531
|
|
325
|
|
|
|
|
|
|
|
|
|
Total non-current liabilities
|
|
|
|
9,072
|
|
7,685
|
|
986
|
|
|
|
|
|
|
|
|
|
Total liabilities
|
|
|
|
22,287
|
|
23,297
|
|
2,988
|
|
|
|
|
|
|
|
|
|
EQUITY
|
|
|
|
|
|
|
|
|
Capital and reserves attributable to
equity holders of the Company
|
|
|
|
|
|
|
|
|
Share capital
|
|
24(a)
|
|
1,195
|
|
1,197
|
|
154
|
Reserves
|
|
25
|
|
50,089
|
|
51,836
|
|
6,648
|
|
|
|
|
|
|
|
|
|
|
|
|
|
51,284
|
|
53,033
|
|
6,802
|
Minority interest
|
|
26
|
|
2,852
|
|
3,297
|
|
423
|
|
|
|
|
|
|
|
|
|
Total equity
|
|
|
|
54,136
|
|
56,330
|
|
7,225
|
|
|
|
|
|
|
|
|
|
Total equity and liabilities
|
|
|
|
76,423
|
|
79,627
|
|
10,213
|
|
|
|
|
|
|
|
|
|
Net current assets
|
|
|
|
28,638
|
|
27,847
|
|
3,572
|
|
|
|
|
|
|
|
|
|
Total assets less current liabilities
|
|
|
|
63,208
|
|
64,155
|
|
8,229
|
|
|
|
|
|
|
|
|
|
The accompanying notes are an integral part of these condensed consolidated interim accounts.
|
|
|
|
|
Hutchison Telecommunications International Limited 2008 Interim Report
|
|
27
|
|
|
Condensed Consolidated Cash Flow Statement
For the six months ended 30 June
|
|
|
|
|
|
|
|
|
|
|
|
Unaudited
2007
HK$ millions
|
|
|
Unaudited
2008
HK$ millions
|
|
|
Unaudited
2008
US$ millions
|
|
|
|
|
|
|
|
|
|
(Note 32)
|
|
Cash flows from operating activities
|
|
|
|
|
|
|
|
|
|
Continuing operations:
|
|
|
|
|
|
|
|
|
|
Profit before taxation
|
|
663
|
|
|
2,397
|
|
|
307
|
|
Adjustments for:
|
|
|
|
|
|
|
|
|
|
Interest income
|
|
(628
|
)
|
|
(632
|
)
|
|
(81
|
)
|
Interest and other finance costs
|
|
797
|
|
|
516
|
|
|
66
|
|
Depreciation and amortisation
|
|
1,982
|
|
|
2,406
|
|
|
309
|
|
Share-based payments
|
|
36
|
|
|
60
|
|
|
8
|
|
Profit on disposal of investments and others, net
|
|
(4
|
)
|
|
(1,464
|
)
|
|
(188
|
)
|
Loss on disposal of fixed assets
|
|
2
|
|
|
1
|
|
|
|
|
Write-off of customer acquisition and retention costs
|
|
26
|
|
|
10
|
|
|
1
|
|
Changes in working capital
|
|
|
|
|
|
|
|
|
|
(Increase)/Decrease in stocks
|
|
(59
|
)
|
|
20
|
|
|
3
|
|
Increase in trade receivables, other receivables and prepayments
|
|
(852
|
)
|
|
(317
|
)
|
|
(41
|
)
|
Decrease in receivable from related companies
|
|
21
|
|
|
|
|
|
|
|
Increase in trade and other payables
|
|
411
|
|
|
1,257
|
|
|
161
|
|
Increase/(Decrease) in payable to related companies
|
|
56
|
|
|
(14
|
)
|
|
(2
|
)
|
|
|
|
|
|
|
|
|
|
|
Cash generated from continuing operations
|
|
2,451
|
|
|
4,240
|
|
|
543
|
|
Interest received
|
|
604
|
|
|
580
|
|
|
74
|
|
Interest and other finance costs paid
|
|
(648
|
)
|
|
(214
|
)
|
|
(27
|
)
|
Taxes paid
|
|
(369
|
)
|
|
(499
|
)
|
|
(64
|
)
|
|
|
|
|
|
|
|
|
|
|
Net cash generated from operating activities of continuing operations
|
|
2,038
|
|
|
4,107
|
|
|
526
|
|
|
|
|
|
|
|
|
|
|
|
Discontinued operations:
|
|
|
|
|
|
|
|
|
|
Cash generated from discontinued operations
|
|
932
|
|
|
|
|
|
|
|
Interest received
|
|
16
|
|
|
|
|
|
|
|
Interest and other finance costs paid
|
|
(713
|
)
|
|
|
|
|
|
|
Taxes paid
|
|
(89
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash generated from operating activities of discontinued operations
|
|
146
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash generated from operating activities
|
|
2,184
|
|
|
4,107
|
|
|
526
|
|
|
|
|
|
|
|
|
|
|
|
The accompanying notes are an integral part of these condensed consolidated interim accounts.
|
|
|
|
|
|
|
28
|
|
Hutchison Telecommunications International Limited 2008 Interim Report
|
Condensed Consolidated Cash Flow Statement
For the six months ended 30 June
|
|
|
|
|
|
|
|
|
|
|
|
Unaudited
2007
HK$ millions
|
|
|
Unaudited
2008
HK$ millions
|
|
|
Unaudited
2008
US$ millions
|
|
|
|
|
|
|
|
|
|
(Note 32)
|
|
Cash flows from investing activities
|
|
|
|
|
|
|
|
|
|
Continuing operations:
|
|
|
|
|
|
|
|
|
|
Purchases of fixed assets
|
|
(970
|
)
|
|
(2,908
|
)
|
|
(374
|
)
|
Upfront and fixed periodic payments for telecommunications licences
|
|
(135
|
)
|
|
(450
|
)
|
|
(58
|
)
|
Additions to customer acquisition and retention costs
|
|
(261
|
)
|
|
(292
|
)
|
|
(37
|
)
|
Additions to prepaid capacity and maintenance
|
|
(68
|
)
|
|
(9
|
)
|
|
(1
|
)
|
Purchase of shares of a subsidiary under a share buy-back plan
|
|
|
|
|
(453
|
)
|
|
(58
|
)
|
Deposit received for disposal of a subsidiary
|
|
|
|
|
552
|
|
|
71
|
|
Advanced payments for network rollout
|
|
(272
|
)
|
|
|
|
|
|
|
Reduction of deposits pledged with banks
|
|
7
|
|
|
|
|
|
|
|
Proceeds on disposal of fixed assets
|
|
11
|
|
|
4
|
|
|
1
|
|
Proceeds on disposal of base station tower sites
|
|
|
|
|
1,189
|
|
|
152
|
|
Increase in interest in a jointly controlled entity
|
|
|
|
|
(18
|
)
|
|
(2
|
)
|
|
|
|
|
|
|
|
|
|
|
Net cash used in investing activities of continuing operations
|
|
(1,688
|
)
|
|
(2,385
|
)
|
|
(306
|
)
|
|
|
|
|
|
|
|
|
|
|
Discontinued operations:
|
|
|
|
|
|
|
|
|
|
Cash used in investing activities
|
|
(4,697
|
)
|
|
|
|
|
|
|
Proceeds on disposal of subsidiaries, net of cash disposed of
|
|
83,185
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash generated from investing activities of discontinued operations
|
|
78,488
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash generated from/(used in) investing activities
|
|
76,800
|
|
|
(2,385
|
)
|
|
(306
|
)
|
|
|
|
|
|
|
|
|
|
|
Cash flows from financing activities
|
|
|
|
|
|
|
|
|
|
Continuing operations:
|
|
|
|
|
|
|
|
|
|
Net cash used in financing activities
|
|
(10,330
|
)
|
|
(507
|
)
|
|
(65
|
)
|
Proceeds from exercise of share options of the Company
|
|
82
|
|
|
1
|
|
|
|
|
Proceeds from exercise of share options of a subsidiary
|
|
98
|
|
|
13
|
|
|
2
|
|
Dividend paid to the Companys shareholders
|
|
(32,234
|
)
|
|
|
|
|
|
|
Dividend paid to minority shareholders
|
|
(259
|
)
|
|
(554
|
)
|
|
(72
|
)
|
Drawing of loan from minority shareholders
|
|
129
|
|
|
4
|
|
|
1
|
|
Settlement and rollover of derivatives
|
|
|
|
|
(110
|
)
|
|
(14
|
)
|
|
|
|
|
|
|
|
|
|
|
Net cash used in financing activities of continuing operations
|
|
(42,514
|
)
|
|
(1,153
|
)
|
|
(148
|
)
|
|
|
|
|
|
|
|
|
|
|
Discontinued operations:
|
|
|
|
|
|
|
|
|
|
Net cash generated from financing activities of discontinued operations
|
|
1,708
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash used in financing activities
|
|
(40,806
|
)
|
|
(1,153
|
)
|
|
(148
|
)
|
|
|
|
|
|
|
|
|
|
|
The accompanying notes are an integral part of these condensed consolidated interim accounts.
|
|
|
|
|
Hutchison Telecommunications International Limited 2008 Interim Report
|
|
29
|
|
|
Condensed Consolidated Cash Flow Statement
For the six months ended 30 June
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Note
|
|
Unaudited
2007
HK$ millions
|
|
|
Unaudited
2008
HK$ millions
|
|
|
Unaudited
2008
US$ millions
|
|
|
|
|
|
|
|
|
|
|
|
(Note 32)
|
|
Increase in cash and cash equivalents
|
|
|
|
38,178
|
|
|
569
|
|
|
72
|
|
Cash and cash equivalents and bank overdrafts as at 1 January
|
|
|
|
2,048
|
|
|
36,611
|
|
|
4,696
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents and bank overdrafts as at 30 June
|
|
13
|
|
40,226
|
|
|
37,180
|
|
|
4,768
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Analysis of net cash
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents and bank overdrafts as at 30 June
|
|
13
|
|
40,226
|
|
|
37,180
|
|
|
4,768
|
|
Add: Bank overdrafts
|
|
13
|
|
|
|
|
54
|
|
|
7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents as at 30 June
|
|
|
|
40,226
|
|
|
37,234
|
|
|
4,775
|
|
Borrowings as at 30 June
|
|
22
|
|
(13,602
|
)
|
|
(11,269
|
)
|
|
(1,445
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash as at 30 June
|
|
|
|
26,624
|
|
|
25,965
|
|
|
3,330
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The accompanying notes are an integral part of these condensed consolidated interim accounts.
|
|
|
|
|
|
|
30
|
|
Hutchison Telecommunications International Limited 2008 Interim Report
|
Condensed Consolidated Statement of Recognised Income and Expense
For the six months ended 30 June
|
|
|
|
|
|
|
|
|
|
|
Unaudited
2007
HK$ millions
|
|
Unaudited
2008
HK$ millions
|
|
|
Unaudited
2008
US$ millions
|
|
|
|
|
|
|
|
|
(Note 32)
|
|
Currency translation differences
|
|
1,060
|
|
990
|
|
|
127
|
|
Cash flow hedges
|
|
|
|
|
|
|
|
|
effective portion of changes in fair value
|
|
|
|
(102
|
)
|
|
(13
|
)
|
transfer from equity to profit and loss account
|
|
|
|
95
|
|
|
12
|
|
Actuarial gains of defined benefit plans
|
|
1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income recognised directly in equity
|
|
1,061
|
|
983
|
|
|
126
|
|
Profit for the period
|
|
70,843
|
|
1,963
|
|
|
251
|
|
|
|
|
|
|
|
|
|
|
Total recognised income for the period
|
|
71,904
|
|
2,946
|
|
|
377
|
|
|
|
|
|
|
|
|
|
|
Attributable to:
|
|
|
|
|
|
|
|
|
Equity holders of the Company
|
|
70,820
|
|
1,690
|
|
|
216
|
|
Minority interest
|
|
1,084
|
|
1,256
|
|
|
161
|
|
|
|
|
|
|
|
|
|
|
|
|
71,904
|
|
2,946
|
|
|
377
|
|
|
|
|
|
|
|
|
|
|
The accompanying notes are an integral part of these condensed consolidated interim accounts.
|
|
|
|
|
Hutchison Telecommunications International Limited 2008 Interim Report
|
|
31
|
|
|
Notes to the Condensed Consolidated Interim Accounts
Hutchison Telecommunications
International Limited (the Company) was incorporated in the Cayman Islands on 17 March 2004 as a company with limited liability. The address of its registered office is Cricket Square, Hutchins Drive,
PO Box 2681, Grand
Cayman KY1-1111, Cayman Islands. The Companys ordinary shares are listed on the Main Board of The Stock Exchange of Hong Kong Limited, and in the form of American Depositary Shares on New York Stock Exchange, Inc.
The Company and its subsidiaries (together the Group) are engaged in mobile telecommunications and related businesses in Hong Kong and Macau,
Israel, Thailand, Indonesia, Vietnam, Sri Lanka, and Ghana (in which the Groups entire indirect interests has been disposed of on 11 July 2008 as set out in Note 31). The Group also has a fixed-line telecommunications business in Hong
Kong.
These unaudited condensed consolidated interim accounts (interim accounts) have been approved for issuance by the Board
of Directors on 19 August 2008.
2.
|
Change in Financial Reporting Standards
|
In 2007
and prior years, the Groups interim accounts had been prepared in accordance with Hong Kong Financial Reporting Standards (HKFRS). The Company had changed the financial reporting standards from HKFRS to International Financial
Reporting Standards as issued by the International Accounting Standards Board (IFRS, which term collectively includes International Accounting Standards (IAS) and related interpretations) and had prepared its consolidated
accounts in accordance with IFRS with effect from the year ended 31 December 2007. There was no adjustment required on the opening balance sheet as at 1 January 2007 on the transition from HKFRS to IFRS. Details of the change are set out
in Note 2 and Note 4 of the annual accounts for the year ended 31 December 2007. Accordingly, the accounting policies used in the preparation of these interim accounts for the six months ended 30 June 2008 are in accordance with IFRS and
the same basis were used in the comparative accounts for the six months ended 30 June 2007.
These interim accounts are
for the six months ended 30 June 2008. They have been prepared in accordance with IAS 34 Interim Financial Reporting. These interim accounts should be read in conjunction with the annual accounts for the year ended 31 December
2007.
|
|
|
|
|
|
|
32
|
|
Hutchison Telecommunications International Limited 2008 Interim Report
|
Notes to the Condensed Consolidated Interim Accounts
4.
|
Significant Accounting Policies
|
The accounting
policies and methods of computation used in the preparation of these interim accounts are consistent with those used in 2007 annual accounts, except for the adoption of the following new or revised IFRS which are relevant to the Groups
operations and are effective for accounting periods beginning on 1 January 2008:
|
|
|
IFRIC 11
|
|
IFRS 2 - Group and Treasury Share Transactions
|
IFRIC 14
|
|
IAS 19 - The Limit on a Defined Benefit Asset, Minimum Funding Requirements and their Interaction
|
The adoption of these new or revised IFRS has no material effect on the Groups results and
financial position for the current or prior periods.
In addition to the above new or revised IFRS effective for accounting periods
beginning on 1 January 2008, the Group has first adopted certain accounting policies in these interim accounts for the six months ended 30 June 2008 as follows:
Beginning on or after
1 January 2008, certain forward foreign exchange contracts entered into by the Group were designated as cash flow hedges of the foreign exchange risk in the Groups foreign currency denominated borrowings, details of which are set out in
Note 15. Under cash flow hedge accounting, changes in the fair value of these derivatives are dealt with as movements in the hedging reserve under equity. When a hedged transaction is no longer expected to occur, the cumulative unrealised gain or
loss recognised in equity is recognised immediately in the profit and loss account as interest and other finance costs, net.
|
(b)
|
Assets or Disposal Group Held for Sale
|
During the
six months ended 30 June 2008, an agreement was entered into to sell the Groups indirect interests in Ghana. In addition, the Groups Vietnam operations was granted an approval to convert its CDMA network to GSM whereas certain CDMA
equipment that cannot be converted for utilisation under the GSM technology is to be sold, details of which are set out in Note 16. Accordingly, the assets and liabilities pertaining to the Ghana operations and the CDMA equipment to be sold are
classified as assets and liabilities held for sale respectively and are stated at the lower of their carrying amount and fair value less costs to sell.
Turnover comprises revenues from the
provision of mobile telecommunications services; handset and accessory sales; fixed-line telecommunications services in Hong Kong, and other non-telecommunications businesses. An analysis of turnover for continuing operations is as follows:
|
|
|
|
|
|
|
Six months ended 30 June
|
|
|
2007
HK$ millions
|
|
2008
HK$ millions
|
Mobile telecommunications services
|
|
7,591
|
|
9,472
|
Mobile telecommunications products
|
|
837
|
|
918
|
Fixed-line telecommunications services
|
|
1,199
|
|
1,352
|
Other non-telecommunications businesses
|
|
12
|
|
18
|
|
|
|
|
|
|
|
9,639
|
|
11,760
|
|
|
|
|
|
|
|
|
|
|
Hutchison Telecommunications International Limited 2008 Interim Report
|
|
33
|
|
|
Notes to the Condensed Consolidated Interim Accounts
Segment information is
provided on the basis of primary geographical regions, the basis which the Group manages its world-wide interests. The Hong Kong and Macau region is further sub-divided into mobile telecommunications and fixed-line telecommunications business
segments. Management of the Group measures the performance of its segments based on operating profit. The segment information on turnover and operating profit/(loss) agreed to the aggregate information in the interim accounts. As such, no
reconciliation between the segment information and the aggregate information in the interim accounts is presented.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six months ended 30 June 2007
|
|
|
|
Hong Kong and Macau
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Continuing
operations
Total
HK$ millions
|
|
|
Discontinued
operations
-India
HK$ millions
|
|
|
|
Mobile
HK$ millions
|
|
|
Fixed-line
HK$ millions
|
|
|
Subtotal
HK$ millions
|
|
|
Israel
HK$ millions
|
|
|
Thailand
HK$ millions
|
|
|
Indonesia
HK$ millions
|
|
|
Others*
HK$ millions
|
|
|
|
Turnover
|
|
2,322
|
|
|
1,199
|
|
|
3,521
|
|
|
5,420
|
|
|
495
|
|
|
|
|
|
203
|
|
|
9,639
|
|
|
6,989
|
|
Operating costs
|
|
(1,550
|
)
|
|
(733
|
)
|
|
(2,283
|
)
|
|
(3,631
|
)
|
|
(463
|
)
|
|
(138
|
)
|
|
(314
|
)
|
|
(6,829
|
)
|
|
(4,676
|
)
|
Depreciation and amortisation
|
|
(538
|
)
|
|
(315
|
)
|
|
(853
|
)
|
|
(775
|
)
|
|
(305
|
)
|
|
(1
|
)
|
|
(48
|
)
|
|
(1,982
|
)
|
|
(187
|
)
|
Profit on disposal of investments and others, net
|
|
|
|
|
|
|
|
|
|
|
4
|
|
|
|
|
|
|
|
|
|
|
|
4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating profit/(loss)
|
|
234
|
|
|
151
|
|
|
385
|
|
|
1,018
|
|
|
(273
|
)
|
|
(139
|
)
|
|
(159
|
)
|
|
832
|
|
|
2,126
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital expenditures incurred during the period on
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
fixed assets
|
|
192
|
|
|
185
|
|
|
377
|
|
|
364
|
|
|
17
|
|
|
66
|
|
|
649
|
|
|
1,473
|
|
|
3,330
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
other intangible assets
|
|
247
|
|
|
14
|
|
|
261
|
|
|
1
|
|
|
|
|
|
79
|
|
|
|
|
|
341
|
|
|
48
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six months ended 30 June 2008
|
|
|
|
|
|
|
Hong Kong and Macau
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mobile
HK$ millions
|
|
|
Fixed-line
HK$ millions
|
|
|
Subtotal
HK$ millions
|
|
|
Israel
HK$ millions
|
|
|
Thailand
HK$ millions
|
|
|
Indonesia
HK$ millions
|
|
|
Others*
HK$ millions
|
|
|
Total
HK$ millions
|
|
Turnover
|
|
|
2,399
|
|
|
1,352
|
|
|
3,751
|
|
|
6,990
|
|
|
621
|
|
|
150
|
|
|
248
|
|
|
11,760
|
|
Operating costs
|
|
|
(1,524
|
)
|
|
(843
|
)
|
|
(2,367
|
)
|
|
(4,621
|
)
|
|
(562
|
)
|
|
(498
|
)
|
|
(489
|
)
|
|
(8,537
|
)
|
Depreciation and amortisation
|
|
|
(638
|
)
|
|
(329
|
)
|
|
(967
|
)
|
|
(1,025
|
)
|
|
|
|
|
(165
|
)
|
|
(249
|
)
|
|
(2,406
|
)
|
Profit on disposal of investments and others, net
|
|
|
|
|
|
|
|
|
|
|
|
1
|
|
|
|
|
|
1,463
|
|
|
|
|
|
1,464
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating profit/(loss)
|
|
|
237
|
|
|
180
|
|
|
417
|
|
|
1,345
|
|
|
59
|
|
|
950
|
|
|
(490
|
)
|
|
2,281
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital expenditures incurred
during the period on
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
fixed assets
|
|
|
229
|
|
|
124
|
|
|
353
|
|
|
546
|
|
|
18
|
|
|
947
|
|
|
278
|
|
|
2,142
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
other intangible assets
|
|
|
271
|
|
|
21
|
|
|
292
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
292
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
*
|
Others segment comprised Sri Lanka, Ghana, Vietnam and Corporate.
|
|
|
|
|
|
|
|
34
|
|
Hutchison Telecommunications International Limited 2008 Interim Report
|
Notes to the Condensed Consolidated Interim Accounts
7.
|
Profit on Disposal of Investments and Others, Net
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six months ended 30 June
|
|
|
Note
|
|
|
2007
HK$ millions
|
|
2008
HK$ millions
|
Net profit on partial disposal of subsidiaries
|
|
(a
|
)
|
|
4
|
|
1
|
Profit on disposal of base station tower sites
|
|
(b
|
)
|
|
|
|
732
|
Other income, net
|
|
(c
|
)
|
|
|
|
731
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4
|
|
1,464
|
|
|
|
|
|
|
|
|
(a)
|
Net Profit on Partial Disposal of Subsidiaries
|
During the six months ended 30 June 2008, the Group recorded a gain on partial disposal of a subsidiary of approximately HK$1 million (six months ended 30 June 2007 HK$4 million) following the exercise of share options
held by the option holders of Partner Communications Company Ltd. (Partner Communications), an indirect subsidiary of the Company.
(b)
|
Profit on Disposal of Base Station Tower Sites
|
On
18 March 2008, PT. Hutchison CP Telecommunications (HCPT), a 60%-owned subsidiary of the Company, entered into a conditional Tower Transfer Agreement to sell up to 3,692 base station tower sites to PT Profesional Telekomunikasi
Indonesia (Protelindo) for a cash consideration of US$500 million (HK$3,882 million). Completion of the sale is expected to occur in tranches over a two-year period. During the six months ended 30 June 2008, sale of first tranche
comprising 1,128 sites was completed whereby the Group recognised a gain of US$94 million (HK$732 million) from the sale.
Concurrent with
Tranche 1 completion, HCPT and Protelindo have entered into a Master Lease Agreement pursuant to which HCPT has been given (i) the right to access, occupy and use the capacity reserved for HCPT on such of the base station towers and related
infrastructure as HCPT may elect for an initial period of twelve years which, at HCPTs election, may be extended for another six years, and (ii) the option to acquire Protelindos right, title and interest in such facilities at a
pre-agreed price. The transaction has been accounted for as an operating lease and the Group recognised an operating lease expense of
HK$20
million during the period ended 30 June 2008.
During the period ended
30 June 2008, a subsidiary of the Company operating in Indonesia was provided with credit vouchers in compensation upon the waiver of certain contractual obligations of a key network supplier. The net amount of US$93.7 million (approximately
HK$731 million) was included in the profit and loss account for the six months ended 30 June 2008 of which US$47.5 million (approximately HK$371 million) remained in amounts receivable in the balance sheet at that date.
|
|
|
|
|
Hutchison Telecommunications International Limited 2008 Interim Report
|
|
35
|
|
|
Notes to the Condensed Consolidated Interim Accounts
8.
|
Interest and Other Finance Costs, Net
|
|
|
|
|
|
|
|
|
|
Six months ended 30 June
|
|
|
|
2007
HK$ millions
|
|
|
2008
HK$ millions
|
|
Interest income
|
|
628
|
|
|
632
|
|
Interest and other finance costs
|
|
(797
|
)
|
|
(516
|
)
|
|
|
|
|
|
|
|
Interest and other finance costs, net
|
|
(169
|
)
|
|
116
|
|
|
|
|
|
|
|
|
Capitalisation rate applied to funds borrowed for the funding of the assets
|
|
4.71% to 7.38%
|
|
|
3.90% to 6.98%
|
|
|
|
|
|
|
|
|
Interest capitalised
|
|
107
|
|
|
2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six months ended 30 June
|
|
|
2007
|
|
|
2008
|
|
|
Current
taxation
HK$ millions
|
|
|
Deferred
taxation
HK$ millions
|
|
|
Total
HK$ millions
|
|
|
Current
taxation
HK$ millions
|
|
Deferred
taxation
HK$ millions
|
|
|
Total
HK$ millions
|
Hong Kong
|
|
(3
|
)
|
|
|
|
|
(3
|
)
|
|
|
|
42
|
|
|
42
|
Outside Hong Kong
|
|
383
|
|
|
(58
|
)
|
|
325
|
|
|
488
|
|
(96
|
)
|
|
392
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
380
|
|
|
(58
|
)
|
|
322
|
|
|
488
|
|
(54
|
)
|
|
434
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hong Kong profits tax has been provided for at the rate of 16.5% (six months ended 30 June
2007 17.5%) on the estimated assessable profits less available tax losses. In 2008, the Government of the Hong Kong Special Administrative Region enacted a change in the profits tax rate from 17.5% to 16.5% for the fiscal year 2008/2009.
Taxation outside Hong Kong has been provided for at the applicable current rates of taxation ruling in the relevant countries on the estimated assessable profits less available tax losses. The change in average applicable tax rate is caused by a
change in the profits tax rate in Hong Kong and a change in the profitability of the Groups subsidiaries in respective countries.
10.
|
Profit from Discontinued Operations
|
On
11 February 2007, the Company entered into an agreement to sell its entire interests in CGP Investments (Holdings) Limited (CGP), a company which held through various subsidiaries, the direct and indirect equity and loan interests
in Hutchison Essar Limited (now known as Vodafone Essar Limited) and its subsidiaries to Vodafone International Holdings B.V., a wholly-owned subsidiary of Vodafone Group Plc, for a cash consideration of approximately US$11.1 billion (approximately
HK$86.6 billion) (the Transaction). Accordingly, the results pertaining to the Indian mobile telecommunications were presented as discontinued operations in accordance with IFRS 5 Non-current Assets Held for Sale and Discontinued
Operations. On 8 May 2007, the Company completed the Transaction and recognised a disposal gain of approximately HK$69,343 million. Profit pertaining to the Indian mobile telecommunications operations for the period ended 8 May 2007
was HK$1,159 million and as a result, profit from discontinued operations of HK$70,502 million was recorded for the six months ended 30 June 2007. Note 6 sets out details of the operating results of the discontinued operations up to the date of
disposal.
|
|
|
|
|
|
|
36
|
|
Hutchison Telecommunications International Limited 2008 Interim Report
|
Notes to the Condensed Consolidated Interim Accounts
During the six months ended 30 June
2007, the Company declared a special cash dividend (the Transaction Special Dividend) of HK$6.75 per share, or approximately HK$32,234 million in aggregate, and paid on 29 June 2007. The Transaction Special Dividend was paid out of
the proceeds from the disposal of CGP as set out in Note 10.
The Company did not declare any dividend for the six months ended 30 June
2008.
Basic
Basic earnings per share is calculated by dividing the profit attributable to equity holders of the Company by the weighted average number of ordinary
shares in issue during the period.
|
|
|
|
|
|
|
Six months ended 30 June
|
|
|
2007
|
|
2008
|
Weighted average number of shares in issue
|
|
4,770,927,865
|
|
4,784,413,333
|
|
|
|
|
|
Profit from continuing operations attributable to
equity holders of the Company (HK$ millions)
|
|
57
|
|
1,165
|
|
|
|
|
|
Basic earnings per share from continuing operations attributable to
equity holders of the Company (HK$ per share)
|
|
0.01
|
|
0.24
|
|
|
|
|
|
Profit from discontinued operations attributable to
equity holders of the Company (HK$ millions)
|
|
70,031
|
|
|
|
|
|
|
|
Basic earnings per share from discontinued operations attributable to
equity holders of the Company (HK$ per share)
|
|
14.68
|
|
|
|
|
|
|
|
Profit attributable to equity holders of the Company (HK$ millions)
|
|
70,088
|
|
1,165
|
|
|
|
|
|
Basic earnings per share attributable to equity holders
of the Company (HK$ per share)
|
|
14.69
|
|
0.24
|
|
|
|
|
|
|
|
|
|
|
Hutchison Telecommunications International Limited 2008 Interim Report
|
|
37
|
|
|
Notes to the Condensed Consolidated Interim Accounts
12.
|
Earnings per Share (continued)
|
Diluted
Diluted earnings per share is calculated by adjusting the weighted average number of ordinary shares outstanding to assume conversion of
the share options that have been granted under the Companys share option scheme to reflect the dilutive potential ordinary shares of the Company. A calculation is done to determine the number of shares that could have been acquired at fair
value (determined as the average market share price of the Companys shares over the period) based on the monetary value of the subscription rights attached to outstanding share options. The number of shares calculated as above is compared with
the number of shares that would have been issued assuming the exercise of the share options.
Partner Communications is the only subsidiary
which has employee stock option plans. The employee stock options of Partner
Communications outstanding as at 30 June 2007 and 2008
did not have a dilutive effect on earnings per share.
|
|
|
|
|
|
|
Six months ended 30 June
|
|
|
2007
|
|
2008
|
Weighted average number of shares in issue
|
|
4,770,927,865
|
|
4,784,413,333
|
Adjustment for share options
|
|
33,171,383
|
|
24,666,453
|
|
|
|
|
|
Weighted average number of shares for the purpose
of diluted earnings per share
|
|
4,804,099,248
|
|
4,809,079,786
|
|
|
|
|
|
Profit from continuing operations attributable to
equity holders of the Company (HK$ millions)
|
|
57
|
|
1,165
|
|
|
|
|
|
Diluted earnings per share from continuing operations attributable
to equity holders of the Company (HK$ per share)
|
|
0.01
|
|
0.24
|
|
|
|
|
|
Profit from discontinued operations attributable to
equity holders of the Company (HK$ millions)
|
|
70,031
|
|
|
|
|
|
|
|
Diluted earnings per share from discontinued operations attributable
to equity holders of the Company (HK$ per share)
|
|
14.58
|
|
|
|
|
|
|
|
Profit attributable to equity holders of the Company (HK$ millions)
|
|
70,088
|
|
1,165
|
|
|
|
|
|
Diluted earnings per share attributable to equity holders
of the Company (HK$ per share)
|
|
14.59
|
|
0.24
|
|
|
|
|
|
|
|
|
|
|
|
|
38
|
|
Hutchison Telecommunications International Limited 2008 Interim Report
|
Notes to the Condensed Consolidated Interim Accounts
13.
|
Cash and Cash Equivalents
|
|
|
|
|
|
|
|
As at
31 December
2007
HK$ millions
|
|
As at
30 June
2008
HK$ millions
|
Cash at bank and on hand
|
|
1,211
|
|
470
|
Short-term bank deposits
|
|
35,400
|
|
36,764
|
|
|
|
|
|
|
|
36,611
|
|
37,234
|
|
|
|
|
|
Cash and cash equivalents and bank overdrafts include the following for the purpose of the cash
flow statement:
|
|
|
|
|
|
|
|
|
|
Note
|
|
As at
31 December
2007
HK$ millions
|
|
As at
30 June
2008
HK$ millions
|
|
Cash and cash equivalents
|
|
|
|
36,611
|
|
37,234
|
|
Bank overdrafts
|
|
22
|
|
|
|
(54
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
36,611
|
|
37,180
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hutchison Telecommunications International Limited 2008 Interim Report
|
|
39
|
|
|
Notes to the Condensed Consolidated Interim Accounts
14.
|
Trade and Other Receivables
|
|
|
|
|
|
|
|
|
|
|
|
|
Note
|
|
|
As at
31 December
2007
HK$ millions
|
|
|
As at
30 June
2008
HK$ millions
|
|
Trade receivables
|
|
|
|
|
3,716
|
|
|
4,175
|
|
Less: Provision for impairment of trade receivables
|
|
|
|
|
(575
|
)
|
|
(673
|
)
|
|
|
|
|
|
|
|
|
|
|
Trade receivables, net of provision
|
|
(a
|
)
|
|
3,141
|
|
|
3,502
|
|
Other receivables and prepayments
|
|
|
|
|
1,010
|
|
|
1,639
|
|
Held-to-maturity debt securities
|
|
|
|
|
551
|
|
|
367
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,702
|
|
|
5,508
|
|
|
|
|
|
|
|
|
|
|
|
(a)
|
Trade Receivables, Net of Provision
|
The Group has
established credit policies for customers. The average credit period granted for trade receivables ranges from 30 to 45 days.
|
|
|
|
|
|
|
As at
31 December
2007
HK$ millions
|
|
As at
30 June
2008
HK$ millions
|
The ageing analysis of trade receivables, net of provision for impairment of trade receivables is as follows:
|
|
|
|
|
Current
|
|
1,506
|
|
2,016
|
31 60 days
|
|
655
|
|
583
|
61 90 days
|
|
151
|
|
188
|
Over 90 days
|
|
829
|
|
715
|
|
|
|
|
|
|
|
3,141
|
|
3,502
|
|
|
|
|
|
The carrying value of trade receivables approximates to their fair value. There is no
concentration of credit risk with respect to trade receivables, as the Group has a large number of customers, internationally dispersed.
|
|
|
|
|
|
|
40
|
|
Hutchison Telecommunications International Limited 2008 Interim Report
|
Notes to the Condensed Consolidated Interim Accounts
15.
|
Derivative Financial Assets and Liabilities
|
|
(a)
|
Derivative Financial Assets
|
|
|
|
|
|
|
|
As at
31 December
2007
HK$ millions
|
|
As at
30 June
2008
HK$ millions
|
Not qualified for hedge
|
|
|
|
|
Forward foreign exchange contracts
|
|
7
|
|
1
|
Other derivatives
|
|
18
|
|
52
|
|
|
|
|
|
|
|
25
|
|
53
|
Cash flow hedge
|
|
|
|
|
Forward foreign exchange contracts
|
|
|
|
56
|
|
|
|
|
|
|
|
25
|
|
109
|
|
|
|
|
|
|
(b)
|
Derivative Financial Liabilities
|
|
|
|
|
|
|
|
As at
31 December
2007
HK$ millions
|
|
As at
30 June
2008
HK$ millions
|
Not qualified for hedge
|
|
|
|
|
Currency swap
|
|
22
|
|
19
|
Forward foreign exchange contracts
|
|
97
|
|
42
|
|
|
|
|
|
|
|
119
|
|
61
|
Cash flow hedge
|
|
|
|
|
Forward foreign exchange contracts
|
|
|
|
73
|
|
|
|
|
|
|
|
119
|
|
134
|
|
|
|
|
|
On 1 January 2008 and as at 30 June 2008, certain forward foreign exchange contracts
with notional amount of US$1,095 million and US$625 million respectively were designated as cash flow hedges of the foreign exchange risk in the Groups Thailand operations arising from its US dollar intercompany loans from the Group.
|
|
|
|
|
Hutchison Telecommunications International Limited 2008 Interim Report
|
|
41
|
|
|
Notes to the Condensed Consolidated Interim Accounts
16.
|
Assets Held for Sale/Liabilities Associated with Assets Held for Sale
|
Assets held for sale and the liabilities associated with assets held for sale comprised the following:
|
|
|
|
|
|
|
|
Note
|
|
|
As at
30 June
2008
HK$ millions
|
Assets held for sale
|
|
|
|
|
|
Disposal group
|
|
(a
|
)
|
|
348
|
Non-current assets
|
|
(b
|
)
|
|
156
|
|
|
|
|
|
|
|
|
|
|
|
504
|
|
|
|
|
|
|
Liabilities associated with assets held for sale
|
|
|
|
|
|
Disposal group
|
|
(a
|
)
|
|
140
|
|
|
|
|
|
|
|
(a)
|
Disposal Group Held for Sale
|
On 17 January
2008, Hutchison Telecommunications International (Cayman) Holdings Limited, a wholly-owned subsidiary of the Company, entered into an agreement to sell all of the indirect interests in Kasapa Telecom Limited, the Ghana operations, to EGH
International Limited for a cash consideration of HK$583.5 million (approximately US$75 million). As at 30 June 2008, the assets and liabilities pertaining to the Ghana operations amounting to HK$348 million and HK$140 million
respectively were classified as a disposal group held for sale and were stated at the lower of their carrying amounts and fair values less costs to sell. The Ghana operations are not considered discontinued operations as they do not represent a
major line of operation within the Group. The transaction was completed on 11 July 2008 (details of which are set out in Note 31).
|
(b)
|
Non-current Assets Held for Sale
|
During the period
ended 30 June 2008, the Groups Vietnam operations received approval from The Peoples Committee of Hanoi City to switch its operating spectrum from CDMA to GSM. While some equipment with modifications can be used in the new network,
due to the difference in technology, certain equipment could not be re-used and therefore would not be used for the entire useful life that had initially been estimated. As such, a review of the useful life of such CDMA equipment was conducted,
resulting in the acceleration of depreciation of these assets to their fair values less cost to sell up to 30 June 2008 and the accelerated depreciation deemed necessary be recognised during the six month ended 30 June 2008. As of
30 June 2008, the Group has initiated an active program to sell these assets. With reference to offers received from interested buyers, the residual value of these CDMA equipment is estimated to be approximately US$20 million
(approximately HK$156 million). As a result of the above, accelerated depreciation expense of US$20.8 million (approximately HK$162 million) was recorded during the six months ended 30 June 2008 (Note 17) for these equipment, which are
classified as non-current assets held for sale as of 30 June 2008.
|
|
|
|
|
|
|
42
|
|
Hutchison Telecommunications International Limited 2008 Interim Report
|
Notes to the Condensed Consolidated Interim Accounts
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Buildings
HK$ millions
|
|
|
Telecommunications
and network
equipment
HK$ millions
|
|
|
Construction
in progress
HK$ millions
|
|
|
Others
HK$ millions
|
|
|
Total
HK$ millions
|
|
As at 1 January 2008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost
|
|
85
|
|
|
32,611
|
|
|
690
|
|
|
6,768
|
|
|
40,154
|
|
Accumulated depreciation and impairment losses
|
|
(26
|
)
|
|
(18,090
|
)
|
|
|
|
|
(5,088
|
)
|
|
(23,204
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net book value
|
|
59
|
|
|
14,521
|
|
|
690
|
|
|
1,680
|
|
|
16,950
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six months ended 30 June 2008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net book value as at 1 January 2008
|
|
59
|
|
|
14,521
|
|
|
690
|
|
|
1,680
|
|
|
16,950
|
|
Additions
|
|
|
|
|
1,685
|
|
|
248
|
|
|
209
|
|
|
2,142
|
|
Disposals
|
|
|
|
|
(390
|
)
|
|
(3
|
)
|
|
(1
|
)
|
|
(394
|
)
|
Transfer between categories
|
|
|
|
|
187
|
|
|
(260
|
)
|
|
73
|
|
|
|
|
Transfer to assets held for sale
|
|
|
|
|
(180
|
)
|
|
(59
|
)
|
|
(40
|
)
|
|
(279
|
)
|
Transfer to other assets
|
|
|
|
|
(17
|
)
|
|
|
|
|
|
|
|
(17
|
)
|
Depreciation
|
|
(1
|
)
|
|
(1,313
|
)
|
|
|
|
|
(295
|
)
|
|
(1,609
|
)
|
Exchange translation differences
|
|
|
|
|
443
|
|
|
31
|
|
|
118
|
|
|
592
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net book value as at 30 June 2008
|
|
58
|
|
|
14,936
|
|
|
647
|
|
|
1,744
|
|
|
17,385
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As at 30 June 2008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost
|
|
85
|
|
|
34,997
|
|
|
647
|
|
|
7,309
|
|
|
43,038
|
|
Accumulated depreciation and impairment losses
|
|
(27
|
)
|
|
(20,061
|
)
|
|
|
|
|
(5,565
|
)
|
|
(25,653
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net book value
|
|
58
|
|
|
14,936
|
|
|
647
|
|
|
1,744
|
|
|
17,385
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
During the six months ended 30 June 2008, the Group recognised a total additional
depreciation of HK$305 million that comprised accelerated depreciation for CDMA equipment not convertible to GSM and their related capitalised expenses of HK$162 million (Note 16(b)) and HK$19 million respectively; and an amount of HK$124 million
for 3G network equipment recorded by Partner Communications.
|
|
|
|
|
|
HK$ millions
|
|
Gross carrying amount and net book value as at 1 January 2008
|
|
6,070
|
|
Relating to additional equity interests in subsidiaries acquired
|
|
179
|
|
Relating to subsidiaries partially disposed of
|
|
(1
|
)
|
Transfer to assets held for sale
|
|
(79
|
)
|
Exchange translation differences
|
|
173
|
|
|
|
|
|
Gross carrying amount and net book value as at 30 June 2008
|
|
6,342
|
|
|
|
|
|
Accumulated impairment losses as at 1 January 2008 and 30 June 2008
|
|
|
|
|
|
|
|
|
|
|
|
|
Hutchison Telecommunications International Limited 2008 Interim Report
|
|
43
|
|
|
Notes to the Condensed Consolidated Interim Accounts
19.
|
Other Intangible Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Telecommunications
licences
HK$ millions
|
|
|
Customer
acquisition and
retention costs
HK$ millions
|
|
|
Brand name
HK$ millions
|
|
|
Customer base
HK$ millions
|
|
|
Total
HK$ millions
|
|
As at 1 January 2008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost
|
|
7,824
|
|
|
1,143
|
|
|
798
|
|
|
3,753
|
|
|
13,518
|
|
Accumulated amortisation
|
|
(3,784
|
)
|
|
(643
|
)
|
|
(129
|
)
|
|
(1,144
|
)
|
|
(5,700
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net book value
|
|
4,040
|
|
|
500
|
|
|
669
|
|
|
2,609
|
|
|
7,818
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six months ended 30 June 2008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net book value as at 1 January 2008
|
|
4,040
|
|
|
500
|
|
|
669
|
|
|
2,609
|
|
|
7,818
|
|
Additions
|
|
|
|
|
292
|
|
|
|
|
|
|
|
|
292
|
|
Write-off
|
|
|
|
|
(10
|
)
|
|
|
|
|
|
|
|
(10
|
)
|
Transfer to assets held for sale
|
|
(62
|
)
|
|
|
|
|
|
|
|
|
|
|
(62
|
)
|
Amortisation
|
|
(194
|
)
|
|
(279
|
)
|
|
(26
|
)
|
|
(237
|
)
|
|
(736
|
)
|
Exchange translation differences
|
|
374
|
|
|
|
|
|
110
|
|
|
428
|
|
|
912
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net book value as at 30 June 2008
|
|
4,158
|
|
|
503
|
|
|
753
|
|
|
2,800
|
|
|
8,214
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As at 30 June 2008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost
|
|
8,433
|
|
|
1,161
|
|
|
931
|
|
|
4,379
|
|
|
14,904
|
|
Accumulated amortisation
|
|
(4,275
|
)
|
|
(658
|
)
|
|
(178
|
)
|
|
(1,579
|
)
|
|
(6,690
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net book value
|
|
4,158
|
|
|
503
|
|
|
753
|
|
|
2,800
|
|
|
8,214
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
20.
|
Other Non-current Assets
|
|
|
|
|
|
|
|
|
|
|
Note
|
|
|
As at
31 December
2007
HK$ millions
|
|
As at
30 June
2008
HK$ millions
|
Prepaid capacity and maintenance
|
|
|
|
|
1,225
|
|
1,178
|
Other receivables and prepayments
|
|
|
|
|
1,657
|
|
1,672
|
Advanced payments for network rollout
|
|
|
|
|
|
|
144
|
Long-term deposits
|
|
(a
|
)
|
|
452
|
|
452
|
Pension assets
|
|
|
|
|
20
|
|
20
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,354
|
|
3,466
|
|
|
|
|
|
|
|
|
|
(a)
|
As at 30 June 2008, the long-term deposits are pledged to a bank as collateral to certain performance bonds required by the Office of Telecommunications Authority in Hong Kong
under the terms of the mobile telecommunications licence granted to a subsidiary.
|
|
|
|
|
|
|
|
44
|
|
Hutchison Telecommunications International Limited 2008 Interim Report
|
Notes to the Condensed Consolidated Interim Accounts
21.
|
Trade and Other Payables
|
|
|
|
|
|
|
|
|
|
Note
|
|
As at
31 December
2007
HK$ millions
|
|
As at
30 June
2008
HK$ millions
|
Trade payables
|
|
(a)
|
|
1,752
|
|
1,802
|
Accrued expenses and other payables
|
|
|
|
4,236
|
|
4,979
|
Deferred revenue
|
|
|
|
349
|
|
335
|
Receipts in advance
|
|
|
|
927
|
|
945
|
Payables to related companies
|
|
30(c)
|
|
61
|
|
47
|
Current portion of licence fees liabilities
|
|
|
|
577
|
|
361
|
|
|
|
|
|
|
|
|
|
|
|
7,902
|
|
8,469
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As at
31 December
2007
HK$ millions
|
|
As at
30 June
2008
HK$ millions
|
The ageing analysis of trade payables is as follows:
|
|
|
|
|
Current
|
|
1,008
|
|
1,212
|
31 60 days
|
|
649
|
|
309
|
61 90 days
|
|
27
|
|
115
|
Over 90 days
|
|
68
|
|
166
|
|
|
|
|
|
|
|
1,752
|
|
1,802
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Note
|
|
As at
31 December
2007
HK$ millions
|
|
As at
30 June
2008
HK$ millions
|
Current
|
|
|
|
|
|
|
Bank overdrafts
|
|
13
|
|
|
|
54
|
Bank loans
|
|
|
|
4,515
|
|
4,466
|
Other loans
|
|
|
|
568
|
|
1,821
|
Notes and debentures
|
|
|
|
|
|
396
|
|
|
|
|
|
|
|
|
|
|
|
5,083
|
|
6,737
|
|
|
|
|
|
|
|
Non-current
|
|
|
|
|
|
|
Bank loans
|
|
|
|
54
|
|
38
|
Other loans
|
|
|
|
1,814
|
|
|
Notes and debentures
|
|
|
|
4,069
|
|
4,494
|
|
|
|
|
|
|
|
|
|
|
|
5,937
|
|
4,532
|
|
|
|
|
|
|
|
Total borrowings
|
|
|
|
11,020
|
|
11,269
|
|
|
|
|
|
|
|
|
|
|
|
|
Hutchison Telecommunications International Limited 2008 Interim Report
|
|
45
|
|
|
Notes to the Condensed Consolidated Interim Accounts
22.
|
Borrowings (continued)
|
The maturity of borrowings
is as follows:
|
|
|
|
|
|
|
As at
31 December
2007
HK$ millions
|
|
As at
30 June
2008
HK$ millions
|
Bank overdrafts
|
|
|
|
54
|
Bank loans
|
|
|
|
|
Not later than 1 year
|
|
4,515
|
|
4,466
|
After 1 year, but within 2 years
|
|
35
|
|
38
|
After 2 years, but within 5 years
|
|
19
|
|
|
Other loans
|
|
|
|
|
Not later than 1 year
|
|
568
|
|
1,821
|
After 1 year, but within 2 years
|
|
1,814
|
|
|
Notes and debentures
|
|
|
|
|
Not later than 1 year
|
|
|
|
396
|
After 1 year, but within 2 years
|
|
1,009
|
|
1,630
|
After 2 years, but within 5 years
|
|
3,060
|
|
2,864
|
|
|
|
|
|
|
|
11,020
|
|
11,269
|
|
|
|
|
|
Included in other loans are obligations under finance lease repayable as follows:
|
|
|
|
|
|
|
As at
31 December
2007
HK$ millions
|
|
As at
30 June
2008
HK$ millions
|
The present value of finance lease obligations is as follows:
|
|
|
|
|
Not later than 1 year
|
|
564
|
|
382
|
After 1 year, but within 2 years
|
|
7
|
|
|
|
|
|
|
|
|
|
571
|
|
382
|
|
|
|
|
|
The Groups outstanding borrowings are denominated in the following currencies:
|
|
|
|
|
|
|
As at
31 December
2007
HK$ millions
|
|
As at
30 June
2008
HK$ millions
|
Hong Kong dollars
|
|
4,138
|
|
4,076
|
New Israeli Shekel
|
|
4,099
|
|
4,929
|
Thai Baht
|
|
309
|
|
314
|
US dollars
|
|
2,474
|
|
1,896
|
Sri Lankan Rupees
|
|
|
|
54
|
|
|
|
|
|
|
|
11,020
|
|
11,269
|
|
|
|
|
|
|
|
|
|
|
|
|
46
|
|
Hutchison Telecommunications International Limited 2008 Interim Report
|
Notes to the Condensed Consolidated Interim Accounts
22.
|
Borrowings (continued)
|
As at 30 June 2008,
total borrowings of HK$135 million (as at 31 December 2007 HK$182 million) were guaranteed by members of Hutchison Whampoa Limited (HWL) group in respect of loans to the Groups Thailand operations only. Under the terms
of a credit support agreement between the Company and HWL group, the Company agreed to pay a guarantee fee charged at normal commercial rates. The Company has also provided a counter-indemnity in favour of HWL and its related companies in respect of
such guarantees, for so long as there remains a guarantee liability. The total amount of fees paid to HWL group for the six months ended 30 June 2008 in respect of these borrowings was HK$3 million (six months ended 30 June 2007
HK$41 million).
As at 30 June 2008, fixed assets and current assets of certain subsidiaries were used as collateral for
certain of the borrowings. As at 30 June 2008, these fixed assets and current assets had a carrying value of HK$2,771 million (as at 31 December 2007 HK$4,971 million) and HK$640 million (as at 31 December 2007 HK$2,398
million) respectively. As at 30 June 2008, the Group had total current borrowings of HK$6,737 million (as at 31 December 2007 HK$5,083 million) and total non-current borrowings of HK$4,532 million (as at 31 December 2007
HK$5,937 million) respectively, HK$1,806 million (as at 31 December 2007 HK$4,600 million) of the Groups current borrowings were secured whilst none (as at 31 December 2007 HK$1,807 million) of the Groups
non-current borrowings were secured.
23.
|
Other Non-current Liabilities
|
|
|
|
|
|
|
|
As at
31 December
2007
HK$ millions
|
|
As at
30 June
2008
HK$ millions
|
Non-current licence fees liabilities
|
|
2,289
|
|
2,218
|
Pension obligations
|
|
13
|
|
16
|
Employee retirement obligations
|
|
88
|
|
115
|
Accrued expenses and other payables
|
|
161
|
|
182
|
|
|
|
|
|
|
|
2,551
|
|
2,531
|
|
|
|
|
|
|
|
|
|
|
Hutchison Telecommunications International Limited 2008 Interim Report
|
|
47
|
|
|
Notes to the Condensed Consolidated Interim Accounts
|
(a)
|
Share Capital of the Company
|
|
(i)
|
Authorised share capital of the Company
|
The authorised
share capital of the Company comprises 10 billion ordinary shares of HK$0.25 each (as at 31 December 2007 10 billion ordinary shares of HK$0.25 each) and 1 million preference shares of US$0.01 each (as at 31 December 2007
1 million preference shares of US$0.01 each).
|
(ii)
|
Issued share capital of the Company
|
|
|
|
|
|
|
|
Number of
shares
|
|
Issued and
fully paid
HK$ millions
|
Balance as at 1 January 2007
|
|
4,765,972,542
|
|
1,191
|
Issued during the year
|
|
16,190,333
|
|
4
|
|
|
|
|
|
Balance at 31 December 2007
|
|
4,782,162,875
|
|
1,195
|
|
|
|
|
|
Balance as at 1 January 2008
|
|
4,782,162,875
|
|
1,195
|
Issued during the period (Note 24(b))
|
|
4,083,334
|
|
2
|
|
|
|
|
|
Balance as at 30 June 2008
|
|
4,786,246,209
|
|
1,197
|
|
|
|
|
|
|
(b)
|
Share Options of the Company
|
The movements in the
number of share options outstanding and their related weighted average exercise price are as follows:
|
|
|
|
|
|
|
|
Weighted average
exercise price
per share
(HK$)
|
|
Number of
options involved
(thousands)
|
|
As at 1 January 2008
|
|
4.72
|
|
47,783
|
|
Granted
|
|
|
|
|
|
Forfeited
|
|
1.95
|
|
(1,750
|
)
|
Exercised (Note 24(a)(ii))
|
|
1.95
|
|
(4,083
|
)
|
|
|
|
|
|
|
As at 30 June 2008
|
|
5.11
|
|
41,950
|
|
|
|
|
|
|
|
As at 30 June 2008, out of the 41,950 thousand outstanding share options (as at
31 December 2007 47,783 thousand), 9,667 thousand (as at 31 December 2007 13,750 thousand) share options were exercisable. Share options exercised in the first six months of 2008 resulted in 4,083 thousand (six
months ended 30 June 2007 9,424 thousand) shares being issued at HK$1.95 (six months ended 30 June 2007 HK$8.70) each. The related weighted average share price at the time of exercise was HK$10.91 per share (six months ended
30 June 2007 HK$15.80). Out of the 41,950 thousand outstanding share options, 28,100 thousand and 13,850 thousand options are expiring on 7 August 2015 and 22 November 2017 respectively.
|
|
|
|
|
|
|
48
|
|
Hutchison Telecommunications International Limited 2008 Interim Report
|
Notes to the Condensed Consolidated Interim Accounts
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Share
premium
HK$ millions
|
|
Retained
earnings/
(Accumulated
losses)
HK$ millions
|
|
|
Cumulative
translation
adjustments
HK$ millions
|
|
|
Fair value
and other
reserves
HK$ millions
|
|
|
Investment
revaluation
reserves
HK$ millions
|
|
Total
HK$ millions
|
|
As at 1 January 2007
|
|
21,341
|
|
(6,915
|
)
|
|
(368
|
)
|
|
177
|
|
|
1,233
|
|
15,468
|
|
Currency translation differences
|
|
|
|
|
|
|
733
|
|
|
(2
|
)
|
|
|
|
731
|
|
Profit attributable to equity holders of the Company for the period
|
|
|
|
70,088
|
|
|
|
|
|
|
|
|
|
|
70,088
|
|
Relating to subsidiaries disposed of
|
|
|
|
|
|
|
(1,115
|
)
|
|
|
|
|
|
|
(1,115
|
)
|
Dividend paid (Note 11)
|
|
|
|
(32,234
|
)
|
|
|
|
|
|
|
|
|
|
(32,234
|
)
|
Employee share option scheme
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
value of services provided
|
|
|
|
|
|
|
|
|
|
36
|
|
|
|
|
36
|
|
Issuance of ordinary shares arising from exercise of employee share options
|
|
108
|
|
|
|
|
|
|
|
(29
|
)
|
|
|
|
79
|
|
Actuarial gains of defined benefit plans
|
|
|
|
1
|
|
|
|
|
|
|
|
|
|
|
1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As at 30 June 2007
|
|
21,449
|
|
30,940
|
|
|
(750
|
)
|
|
182
|
|
|
1,233
|
|
53,054
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As at 1 January 2008
|
|
21,510
|
|
27,771
|
|
|
(734
|
)
|
|
309
|
|
|
1,233
|
|
50,089
|
|
Currency translation differences
|
|
|
|
|
|
|
583
|
|
|
(51
|
)
|
|
|
|
532
|
|
Cash flow hedges
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
effective portion of changes in fair value
|
|
|
|
|
|
|
|
|
|
(102
|
)
|
|
|
|
(102
|
)
|
transfer from equity to profit and loss account
|
|
|
|
|
|
|
|
|
|
95
|
|
|
|
|
95
|
|
Profit attributable to equity holders of the Company for the period
|
|
|
|
1,165
|
|
|
|
|
|
|
|
|
|
|
1,165
|
|
Relating to dilution of interest in a subsidiary
|
|
|
|
|
|
|
|
|
|
(2
|
)
|
|
|
|
(2
|
)
|
Employee share option scheme
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
value of services provided
|
|
|
|
|
|
|
|
|
|
60
|
|
|
|
|
60
|
|
Issuance of ordinary shares arising from exercise of employee share options
|
|
38
|
|
|
|
|
|
|
|
(39
|
)
|
|
|
|
(1
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As at 30 June 2008
|
|
21,548
|
|
28,936
|
|
|
(151
|
)
|
|
270
|
|
|
1,233
|
|
51,836
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hutchison Telecommunications International Limited 2008 Interim Report
|
|
49
|
|
|
Notes to the Condensed Consolidated Interim Accounts
|
|
|
|
|
|
|
|
|
2007
HK$ millions
|
|
|
2008
HK$ millions
|
|
As at 1 January
|
|
5,758
|
|
|
2,852
|
|
Minority interest in profit
|
|
755
|
|
|
798
|
|
Relating to exercise of share options of a subsidiary
|
|
82
|
|
|
11
|
|
Relating to subsidiaries disposed of
|
|
(4,475
|
)
|
|
|
|
Dividend paid to minority shareholders
|
|
(259
|
)
|
|
(554
|
)
|
Drawing of loan from minority shareholders
|
|
129
|
|
|
4
|
|
Share of other reserves
|
|
9
|
|
|
2
|
|
Relating to share buy-back of a subsidiary
|
|
|
|
|
(274
|
)
|
Exchange translation differences
|
|
329
|
|
|
458
|
|
|
|
|
|
|
|
|
As at 30 June
|
|
2,328
|
|
|
3,297
|
|
|
|
|
|
|
|
|
27.
|
Contingent Liabilities
|
As at 30 June 2008,
the Group had contingent liabilities in respect of the following:
|
(a)
|
performance guarantees amounting to HK$60 million (as at 31 December 2007 HK$60 million).
|
|
(b)
|
a total of 16 claims (as at 31 December 2007 12) against the Groups subsidiary in Israel, Partner Communications, and, in some such claims, together with other
cellular operators in Israel, each with a motion to certify as class action, in respect of the following:
|
|
|
|
|
|
|
|
Amount of claim
|
In approximate HK$ millions
|
|
As at
31 December
2007
|
|
As at
30 June 2008
|
Alleged violation of antitrust law
|
|
238
|
|
277
|
Alleged consumer complaints
|
|
5,025
|
|
2,490
|
Alleged unauthorised erection of cellular antennas, causing environmental damages
|
|
1,980
|
|
2,310
|
|
|
|
|
|
At this stage, and until the claims are recognised as class actions, the Company and Partner
Communications are unable to evaluate the probability of success of such claims, and therefore no provision has been made.
|
(c)
|
potential claim of approximately NIS 42.5 million (approximately HK$98 million) by the Ministry of Communications in Israel (the MOC) in respect of the past use of
certain frequency band by Partner Communications pursuant to an agreement made between Partner Communications and the Palestinian mobile operator being allocated such frequency band, which agreement was endorsed by the MOC.
|
|
|
|
|
|
|
|
50
|
|
Hutchison Telecommunications International Limited 2008 Interim Report
|
Notes to the Condensed Consolidated Interim Accounts
Outstanding commitments of the Group
not provided for in these interim accounts are as follows:
(a) Capital Commitments
|
|
|
|
|
|
|
|
|
|
|
Contracted but not
provided for
|
|
Authorised but not
contracted for
(Note)
|
|
|
As at
31 December
2007
HK$ millions
|
|
As at
30 June
2008
HK$ millions
|
|
As at
31 December
2007
HK$ millions
|
|
As at
30 June
2008
HK$ millions
|
Telecommunications, mobile network
|
|
2,870
|
|
4,265
|
|
4,512
|
|
1,439
|
Telecommunications, fixed network
|
|
261
|
|
344
|
|
375
|
|
264
|
Investment commitment
|
|
|
|
24
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,131
|
|
4,633
|
|
4,887
|
|
1,703
|
|
|
|
|
|
|
|
|
|
|
Note:
|
The Group, as part of its budgeting process, estimates future capital expenditures as shown above. These estimates are subject to vigorous authorisation process before the
expenditure is committed.
|
(b) Operating Lease Commitments
The Group had future aggregate minimum lease payments under non-cancellable operating leases as follows:
|
|
|
|
|
|
|
|
|
|
|
Land and buildings
|
|
Other assets
|
|
|
As at
31 December
2007
HK$ millions
|
|
As at
30 June
2008
HK$ millions
|
|
As at
31 December
2007
HK$ millions
|
|
As at
30 June
2008
HK$ millions
|
Not later than 1 year
|
|
690
|
|
806
|
|
290
|
|
333
|
Later than 1 year and not later than 5 years
|
|
1,225
|
|
1,408
|
|
157
|
|
661
|
Later than 5 years
|
|
805
|
|
891
|
|
1
|
|
982
|
|
|
|
|
|
|
|
|
|
|
|
2,720
|
|
3,105
|
|
448
|
|
1,976
|
|
|
|
|
|
|
|
|
|
29.
|
Ultimate Holding Company
|
As at 30 June 2008,
the Company was owned as to 59.28% by HWL with the remaining shares being widely held. The Directors regarded HWL as being the Companys ultimate holding company.
|
|
|
|
|
Hutchison Telecommunications International Limited 2008 Interim Report
|
|
51
|
|
|
Notes to the Condensed Consolidated Interim Accounts
30.
|
Related Party Transactions
|
For the purposes of
these interim accounts, parties are considered to be related to the Group if the party has the ability, directly or indirectly, to exercise significant influence over the Group in making financial and operating decisions, or vice versa. Related
parties may be individuals (being members of key management personnel, significant shareholders and/or their close family members) or other entities and include entities which are under the significant influence of related party of the Group where
those parties are individuals.
Related Party Group
Hutchison Group HWL together with its direct and indirect subsidiaries.
Transactions between the
Company and its subsidiaries have been eliminated on consolidation. Transactions between the Group and other related parties during the period are summarised below:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six months ended 30 June
|
|
|
|
|
|
|
2007
HK$ millions
|
|
|
2008
HK$ millions
|
|
(a) Key management personnel remuneration:
|
|
|
|
|
|
|
|
|
|
Directors fees
|
|
|
|
|
2
|
|
|
2
|
|
Basic salaries, allowances and benefits-in-kind
|
|
|
|
|
4
|
|
|
7
|
|
Bonuses
|
|
|
|
|
7
|
|
|
13
|
|
Provident fund contributions
|
|
|
|
|
1
|
|
|
1
|
|
Share-based payments
|
|
|
|
|
6
|
|
|
17
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
20
|
|
|
40
|
|
|
|
|
|
|
|
|
|
|
|
(b) Transactions with Hutchison Group:
|
|
|
|
|
|
|
|
|
|
Provision for fixed telecommunications and other services
|
|
|
|
|
(33
|
)
|
|
(33
|
)
|
Provision for mobile telecommunications services income
|
|
|
|
|
(15
|
)
|
|
(7
|
)
|
Rental expenses on lease arrangements
|
|
|
|
|
28
|
|
|
27
|
|
Bill collection services fee expenses
|
|
|
|
|
6
|
|
|
7
|
|
Roaming arrangement fee income
|
|
|
|
|
(4
|
)
|
|
(12
|
)
|
Sharing of services arrangements
|
|
|
|
|
15
|
|
|
16
|
|
Dealership services fee expenses
|
|
|
|
|
12
|
|
|
11
|
|
Global procurement services arrangements expenses
|
|
|
|
|
9
|
|
|
11
|
|
Provision of data center services
|
|
|
|
|
(9
|
)
|
|
(9
|
)
|
Purchase of handset and accessories
|
|
|
|
|
636
|
|
|
151
|
|
Purchase of office supplies
|
|
|
|
|
3
|
|
|
3
|
|
Advertising and promotion expenses
|
|
|
|
|
8
|
|
|
15
|
|
Guarantee and other finance fees
|
|
|
|
|
41
|
|
|
3
|
|
Interest income on non-current amount due from a related company
|
|
|
|
|
(3
|
)
|
|
|
|
Purchase of cash voucher for capital expenditure settlement
|
|
|
|
|
|
|
|
3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Note
|
|
|
As at
31 December
2007
HK$ millions
|
|
|
As at
30 June
2008
HK$ millions
|
|
(c) Balances with Hutchison Group:
|
|
|
|
|
|
|
|
|
|
Payables to related companies
|
|
(i
|
)
|
|
(61
|
)
|
|
(47
|
)
|
|
|
|
|
|
|
|
|
|
|
|
(i)
|
The payables to related companies, arose during the ordinary course of business, are unsecured, interest free and repayable on demand.
|
|
|
|
|
|
|
|
52
|
|
Hutchison Telecommunications International Limited 2008 Interim Report
|
Notes to the Condensed Consolidated Interim Accounts
On 11 July 2008, the Group
completed its disposal of the indirect interests in the Ghana operations as set out in Note 16(a) and the Group is expected to realise a gain of approximately HK$295 million.
32.
|
US Dollar Equivalents
|
The US dollar equivalents of
the figures shown in these interim accounts are supplementary information and have been translated at the noon buying rate in New York for cable transfers as certified by the Federal Reserve Bank of New York in effect on 30 June 2008, which was
HK$7.797 to US$1.00. Such translation should not be construed as representations that the Hong Kong dollar amounts represent, or have been or could be converted into, US dollar at that or any other rate.
Information for Shareholders
Listings
The Companys ordinary shares are listed on the Main
Board of The Stock Exchange of Hong Kong Limited, and in the form of American Depositary Shares (ADSs) on New York Stock Exchange, Inc. Each ADS represents ownership of 15 ordinary shares of the Company. Additional information and specific enquiries
concerning the Companys ADSs should be directed to the Companys ADS Depositary at the address given on this page.
Stock Code / Ticker
|
|
|
The Stock Exchange of Hong Kong Limited
|
|
2332
|
New York Stock Exchange, Inc.
|
|
HTX
|
|
|
|
Registered Office
|
Cricket Square
|
|
|
Hutchins Drive, PO Box 2681
|
Grand Cayman KY1-1111
|
Cayman Islands
|
|
|
|
|
|
Telephone:
|
|
+1 345 945 3901
|
Facsimile:
|
|
+1 345 945 3902
|
|
|
|
|
Head Office and Principal Place of Business
|
|
|
22/F, Hutchison House
|
|
|
10 Harcourt Road
|
|
|
Hong Kong
|
|
|
|
|
|
Telephone:
|
|
+852 2128 1188
|
Facsimile:
|
|
+852 2128 1778
|
|
|
|
|
Principal Executive Offices in Hong Kong
|
|
20/F, Hutchison Telecom Tower
|
99 Cheung Fai Road
|
Tsing Yi
|
Hong Kong
|
|
|
|
Telephone:
|
|
+852 2128 3222
|
Facsimile:
|
|
+852 2827 1371
|
|
|
|
|
Principal Share Registrar and Transfer Office
|
|
Butterfield Fund Services (Cayman) Limited
|
Butterfield House
|
68 Fort Street, George Town
|
Grand Cayman, Cayman Islands
|
|
|
|
Mailing address:
|
|
PO Box 705, Grand Cayman KY1-1107
|
|
|
Cayman Islands
|
Telephone:
|
|
+1 345 949 7055
|
Facsimile:
|
|
+1 345 949 7004
|
|
|
|
|
Hong Kong Branch Share Registrar and Transfer Office
|
|
Computershare Hong Kong Investor Services Limited
|
Rooms 1712-1716
|
17/F, Hopewell Centre
|
183 Queens Road East
|
Wanchai
|
Hong Kong
|
|
|
|
Telephone:
|
|
+852 2862 8628
|
Facsimile:
|
|
+852 2865 0990
|
|
|
|
|
ADS Depositary
Citibank Shareholder Services
PO Box 43077
|
Providence, Rhode Island 02940-3077
|
USA
|
|
|
|
Toll free for US only:
|
|
1 877 248 4237 CITI-ADR
|
From outside US:
|
|
+1 816 843 4281
|
Facsimile:
|
|
+1 201 324 3284
|
Email:
|
|
citibank@shareholders-online.com
|
|
|
|
Investor Information
|
|
|
|
Corporate press releases, financial reports and other investor information on the Company are available online at the Companys website.
|
|
|
|
|
Investor Relations Contact
|
|
Please direct enquiries to:
|
|
|
Email:
|
|
htilir@htil.com.hk
|
Telephone:
|
|
+852 2128 3145
|
Website
www.htil.com
Cautionary Statements
This interim report contains forward-looking statements. Statements that are not historical facts, including statements about the Companys beliefs and expectations,
are forward-looking statements. These statements are based on current plans, estimates and projections, and therefore should not place undue reliance on them. Forward-looking statements speak only as of the date they are made, and the Company
undertakes no obligation to update publicly any of them in light of new information or future events. Forward-looking statements involve inherent risks, uncertainties and assumptions. The Company cautions that if these risks or uncertainties ever
materialise or the assumptions prove incorrect, or if a number of important factors occur or do not occur, the Companys actual results may differ materially from those expressed or implied in any forward-looking statement. Additional
information as to factors that may cause actual results to differ materially from the Companys forward-looking statements can be found in the Companys filings with the United States Securities and Exchange Commission.
Non-GAAP Measures
While non-GAAP (generally accepted accounting
principles) measures such as EBITDA and LBITDA are often used by companies as an indicator of operating performance, they are not expressly permitted measures under International Financial Reporting Standards and may not be comparable to similarly
titled measures for other companies. Accordingly, such non-GAAP measures should not be considered as an alternative to operating income as an indicator of the operating performance of the Group or as an alternative to cash flows from operating
activities as a measure of liquidity. The use of non-GAAP measures is provided solely to enhance the overall understanding of the Groups current financial performance. Additionally because the Group has historically reported certain non-GAAP
results to investors, the Group considers the inclusion of non-GAAP measures provides consistency in our financial reporting.
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