India helps HTIL report first ever net profit

Hutchison Telecommunications International has reported its first ever net profit, in what will be the group’s last set of results to include a full-year contribution from its coveted India operations.

HTIL reported a net profit of HK$201m ($25.7m) for 2006, against a loss of HK$768m in 2005.

Hutchison Essar, India’s fourth-largest mobile operator, accounted for almost half of group turnover and 80 per cent of its customer base, which grew 75 per cent last year to 30m subscribers.

India’s contribution to HTIL’s growth has made the $11.1bn sale of its effective 67 per cent interest in Hutchison Essar to Vodafone a controversial one.

Orascom, HTIL’s second largest shareholder with a 19 per cent stake, wanted to keep control of the Indian network, which it saw as complimentary to its interests elsewhere in the region.

Other critics have said the disposal leaves HTIL with a grab-bag of disparate network assets stretching from Ghana to Hong Kong. They are also disappointed that the company will return only about half of its expected gain to shareholders in the form of a HK$6.75 special dividend.

HTIL argues that the special dividend is greater than the debut valuation of its shares in 2004, while the retention of proceeds will enable it to grow in other promising emerging markets such as Indonesia and Vietnam.

“On completion of the sale of our interests in India, Hutchison Telecom will be amongst the best capitalised telecoms companies in the region,” said Canning Fok, HTIL chairman.

HTIL’s exit from India has been a difficult one and was settled last week only after it agreed to a $415m divorce settlement with its partner, the Essar group.