Enhance Core Business Performance Improve operational efficiency Laying the foundation for sustainable growth
Hong Kong, 26 April 2024/News/-- Hong Kong Broadband Limited (“Hong Kong Broadband” or the “Company”; Stock Code: 1310) today announced its operating performance and financial results for the six months ended 29 February 2024 (the “First Half of 2024”). Despite the uncertain and challenging business environment, Hong Kong's successful loss to earnings marks a key moment in the path to sustainable profitability. By improving operational efficiency and enhancing the performance of its core business, the Group has laid a solid foundation for the continued growth of its Enterprise Solutions and Residential Solutions business.
Hong Kong Broadband Announces FY2024 Interim Results, Leading the ICT Industry Fast for Sustainable Growth. HONG KONG BROADBAND SHAREHOLDER MANAGER, EXECUTIVE VICE CHAIRMAN AND GROUP CHIEF EXECUTIVE YANG YANG (LEFT); HONG KONG BROADBAND SHAREHOLDER MANAGER AND CHIEF FINANCIAL OFFICER YU CHUNG TING (RIGHT).
Results Summary • Revenue decreased 13% year-on-year to HK$58.09 billion, mainly due to underperforming sales of mobile phones and other products. Despite this, the Group's core business, including fixed-line telecommunications network services, technology solutions and advisory services, grew steadily by 1% year-on-year. • PROFIT BEFORE INTEREST TAX DEPRECIATION AMORTISATION DECREASED BY 4% YEAR-ON-YEAR TO HK$11.51 MILLION, MAINLY DUE TO WEAK SALES PERFORMANCE OF HANDSETS AND OTHER PRODUCTS, ALTHOUGH REDUCED OPERATING EXPENSES PARTIALLY OFFSET THE DECLINE FROM IMPROVED OPERATIONS. • Profit for the six-month period decreased 93% year-on-year to HK$200 million. Despite the decline in profit, it was significantly better compared to the loss of HK$12.67 billion in the previous financial year. In comparison, the adjusted loss for the previous year was HK$6.7 million after excluding one-off goodwill impairments. This positive transformation is mainly due to the Group's continued efforts to improve core business performance and operational efficiency. • Adjusted free cash flow decreased 66% year-on-year to HK$1.24 billion, driven primarily by the current high interest rate environment, resulting in a 51% increase in net interest paid during the review period. Taking into account the company's dividend policy and the expected future capital expenditure requirements to create long-term value for all shareholders, the Board proposes to pay an interim dividend of HK15 cents per share (28 February 2023:20 cents per share). |
HONG KONG BROADBAND SHAREHOLDER MANAGER, EXECUTIVE VICE CHAIRMAN AND GROUP CHIEF EXECUTIVE OFFICER YANGIt said: “In the past six months, while the market has been in demand for digital transformation, the slowing economic recovery and high interest rates have challenged customers' business operations, leading to delays in project timelines. Despite this, we remain committed to advancing our strategic roadmap to enhance the performance and operational efficiency of our core business with a strong telecommunications infrastructure. During this challenging reporting period, these strategic improvements have led to modest growth, laying a solid foundation for continued expansion into the future.”
Enterprise Solutions: Going Beyond BecomingICTIndustry Leaders to Achieve Growth
The Enterprise Solutions business continued to strengthen its core business performance, with enterprise service revenues (excluding international telecommunications services) growing by 3%. In addition, new orders increased by 20% year-on-year and revenues of HK$47 billion have not yet been achieved. Driven by strong customer demand for cloud technologies, the cloud services business is one of the main drivers of corporate revenue growth. It is worth noting that the combination of IT solutions launched last year, Easy•IT and AegisConnect successfully attracted strong customer attention and significantly facilitated the need for upgraded services for new and old customers. MORE RECENTLY, WE'VE LAUNCHED OFFICE-IN-A-BOX AND SHOP-IN-A-BOX, OFFERING A SUITE OF CUSTOMIZED IT SOLUTIONS FOR SPECIFIC INDUSTRIES THAT DIRECTLY ADDRESS THE CHALLENGES FACING DIFFERENT INDUSTRIES.
In addition, the enterprise solutions business has expanded its market influence, especially in public institutions and large enterprises, while consolidating its position in the SME market. The Enterprise Solutions business has also made significant progress in the region, helping companies from the Mainland of China, especially the Greater Bay Area, to enter Hong Kong, and supporting local and international enterprises to enter the Mainland China market. Revenues from Mainland China and Macau remained stable.
Residential Solutions: Continuous Improvement of the Unlimited in One StrategyARPH(Average income per household)
THE RESIDENTIAL SOLUTIONS BUSINESS SHOWED RESILIENCE, WITH REVENUE DECLINING SLIGHTLY BY 1% TO HK$11.82 MILLION ON A YEAR-ON-YEAR BASIS. In the first half of 2024, the Residential Solutions business is working to strengthen partnerships to enhance its products and services. These efforts significantly increase the utilization rate of high-speed fiber services, especially the upgrade of the 2000Mbps combination. Service revenue has remained stable, mainly due to the company's persistent implementation of an end-to-end strategy, enriching its value-added service portfolio to deepen customer engagement. This strategy has been very successful, greatly increasing customer engagement with the company's entertainment platforms such as Netflix, Disney+, MyTV SUPER and Wonder. As a result, residential ARPU rose 1% to HK$181.
During the reporting period, we also launched a new travel lifestyle communications service brand — N mobile, to reinvigorate existing virtual mobile network operator services (supported by China Mobile Hong Kong, Digitext and 3HK). We now offer business and residential customers one of the most comprehensive selection of local and roaming communications on the market. In addition, sales of our innovative Global SIM travel data card service have grown significantly as tourism activity returns to pre-pandemic levels, driven by a resurgence in demand for consumer data roaming.
25GbpsFiber Optics: Leading the way in network innovation
Core telecommunications services have driven the strategic growth of broadband in Hong Kong. To meet the strong demand for high-speed network services in the business and residential markets, Hong Kong Broadband has teamed up with Nokia to pre-sell the first 25Gbps fibre network in Hong Kong ^. The service is expected to be officially launched in June 2024, allowing customers to enjoy a seamless high-speed network experience at an extremely competitive price.
Yang ChunguangIn conclusion, “Our strategic alliance with Nokia will reinvent the new era of the web. “This key move will help us steadily increase market share over the next 12 to 18 months and enhance revenue from our high-margin core services, driving solid growth in our key business areas.”
For details of Hong Kong Broadband 2024 results, please refer to the relevant announcement:
^ HONG KONG BROADBAND IS THE FIRST TELECOMMUNICATIONS SERVICE PROVIDER TO PRE-SELL 25G BROADBAND SERVICES IN HONG KONG AS OF 26 APRIL 2024, ACCORDING TO MARKET DATA FROM MAJOR TELECOMMUNICATIONS SERVICE PROVIDERS IN HONG KONG. |
About Hong Kong Broadband Limited
HONG KONG BROADBAND LIMITED (HKEX STOCK CODE: 1310, TOGETHER WITH ITS SUBSIDIARIES, COLLECTIVELY REFERRED TO AS “HONG KONG BROADBAND” OR THE “GROUP”) IS AN INVESTMENT HOLDING COMPANY. Headquartered in Hong Kong and operating in Hong Kong, Macau and the Mainland of China, the Group is a leading provider of integrated telecommunications and technology services. The Group offers a comprehensive one-stop suite of premium information and communications technology (ICT) solutions and an unlimited portfolio of one-stop services. Hong Kong's triple fiber optic network covers more than 257,000 households and 8,100 commercial buildings and facilities in Hong Kong. Hong Kong Broadband is committed to bringing long-term benefits to its businesses in the region with a core objective of “making a better home”. In 2023, Hong Kong Broadband was awarded the highest AAA rating by MSCI ESG and underperformed its peers. The Group is managed by the holding managers (directors and management professionals) of hundreds of shares in Hong Kong Broadband Limited (HKEX Stock Code: 1310). For more information about Hong Kong Broadband Limited, please visit.