News
Release

 

 

SmarTone’s Group Net Profit Increases by 54 per cent. to $238 Million

 

Dividend Payout Ratio Doubles to Two-Thirds

 

 

(11 March 2003, Hong Kong) – SmarTone Telecommunications Holdings Limited (SEHK stock code: 0315) today announced the interim results for the six months ended 31 December 2002.

 

The Group’s profit attributable to shareholders reached $238 million, an increase of 54 per cent. on $155 million for the preceding six months and a substantial improvement from a loss of $39 million for the same period last year.

 

The Group’s earnings before interest and tax (EBIT) rose by 71 per cent. to $197 million, compared with $115 million for the previous six months.

 

The Group’s earnings before interest, tax, depreciation and amortisation (EBITDA) of $394 million, representing a 9 per cent. growth on EBITDA of $362 million for the preceding six months and 91 per cent. growth on EBITDA of $206 million for the same period last year.

 

The dividend payout ratio is being doubled to two-thirds of full year net profit, and the Board of Directors declares the payment of an interim dividend of 20 cents per share for the period under review. 

 

The Board of Directors is reviewing options, including the possibility of special cash dividend distribution, to optimise the Group’s capital structure with the twin objectives of ensuring adequate flexibility going forward and enhancing shareholders’ value.

 

“Our strategy is to increase revenue market share and compete through continual focus on the three pillars of our business: products and services, network and customer service,” said Mr. Douglas Li, Chief Executive Officer of SmarTone.  “We will develop new revenue streams by marketing more targeted offerings which encompass both innovative data and voice services to different customer segments.”

 

With the growing convergence of postpaid and prepaid services, and to be more transparent and consistent with international practice, SmarTone introduces blended ARPU in addition to just postpaid ARPU.  Blended ARPU is calculated by dividing the Hong Kong mobile services revenue by the aggregate number of postpaid and prepaid customers.

 

“Blended ARPU gives a more accurate reflection of the operator’s ability to generate revenue from the whole customer base, not just postpaid customers, especially when many prepaid SIMs in the market are given away free without generating any revenue,” according to Mr. Li.

 

During the period under review, SmarTone has made significant achievements in meeting the key challenges in managing the adoption of data services.

 

(1)           Development and marketing of new products & services:

·         provides customers the only true mobile multimedia experience in Hong Kong

·         provides the world’s first optimised presentation of multimedia content to customers

·         enables customers with video-enabled MMS phones to create their own unique video clips and send them to friends and families.  SmarTone is the first in Hong Kong to provide recipients with true non-video phone support

·         empowers customers with greater productivity and convenience through its enhanced features, such as sending email with voice attachments as well as viewing and forwarding of emails and attachments to fax for printout

·         SmarTone offers the largest variety of mobile games compatible with the different MIDP Java engines specified by different brands of mobile games.  Additionally, SmarTone has adopted a specialized Java engine that is optimised for mobile gaming, and which has been installed in the Sharp GX12, exclusive to SmarTone

 

(2)           Significant enhancement of network coverage and quality:

Over the past 15 months, it has increased the number of transmission sites by 25% to now over 2,000 sites.  SmarTone’s aggressive network enhancement plan has resulted in dramatic improvements, including:

·         Better coverage, especially in indoor locations (eg. full indoor coverage, including lifts, of all Hongkong Land’s office buildings in Central)

·         Increased network capacity

·         Enhanced delivery of data services

·         Encouraging feedback from customers

 

(3)           SmarTone continued to upgrade its award-winning customer service. There has been a major shift in its distribution mix to own-controlled channels as its well-trained front-line staff can provide better customer service on data.

 

SmarTone continues to receive industry-wide recognition for best customer service, beating all other mobile operators in winning numerous major industry and service awards, including those presented by the Hong Kong Retail Management Association, the leading authoritative body representing the whole retail industry in Hong Kong. 

 

“Going forward, SmarTone will continue to pursue the customer-oriented strategy, which is encapsulated in our ‘Get Closer’ customer proposition – helping our customers get closer to the people, the information and the entertainment that is important to them,” concluded Mr. Li.

 

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About SmarTone

 

Established in 1992, SmarTone is a leading provider of mobile communications services in Hong Kong. It is a customer-oriented Company and aims to bring its customers closer to the people, the information and the entertainment that is important to them and, through this, to generate greater shareholders’ value.

 

With our strong technological heritage and deep commitment to quality service, we intend to bring our customers into the new world of 2.5G/3G mobile infotainment and media. With a clear focus on customer needs, we have marketed numerous compelling services which deliver substantial benefits to our customers — recent branded offerings include , , , , and .

 

Our commitment to quality service is well recognised in Hong Kong, validated by recent retail and service industry awards.

 

 

Hong Kong Retail Management Association’s Annual Service and Courtesy Awards

 

 

Best Team Award         

2001 & 2002

 

Supervisory Level Award

2001

 

Junior Frontline Level Award

2002

 

 

Hong Kong Retail Management Association’s Mystery Shoppers Programme

 

 

Service Category Leader

2002 & 2003

 

Service Retailer of the Year

2002

 

 

Hong Kong Management Association’s Distinguished Salesperson Award

 

 

All five SmarTone-nominated staff members

2002

 

 

Hong Kong Retail Management Association’s Mystery Shoppers Programme

 

 

Call Centre Team Leader - Silver & Bronze

2002

 

Call Centre Professional - Bronze

2002

 

 

We were the first operator to launch GSM mobile services in Asia in 1993 and the first in Hong Kong to introduce automatic international roaming. We were the first in the world to implement Enhanced Full Rate technology in our network in 1997, greatly improving voice quality for our customers. We were the first in Hong Kong to pilot launch GPRS in 1999.

 

SmarTone (SEHK: 0315) has been publicly listed in Hong Kong since 1996. The Company’s major shareholder is Sun Hung Kai Properties Limited (holding about 51%).

 

 

 

 

 

- END -

 

For further information, please contact:
Helen Kwan

Head of Corporate Communications

Tel: 3128 2255

Email: helen_kwan@hksmartone.com

 

Website: http://www.smartone.com.hk