China Unicom profit rises but ARPU takes hit

Business | Avery Chen 15 Aug 2019

Avery Chen

China Unicom (Hong Kong) (0762) yesterday reported its first-half net profit climbed 16.32 percent year-on-year to 6.88 billion yuan (HK$7.69 billion) but saw a 19 percent decline in 4G average revenue per user to 45.9 yuan.

Basic earnings per share was 22 fen. First-half revenue rose, but the telecom operator did not declare an interim dividend, taking into account its profitability, debt obligations, cash flow level, and capital requirements for future development.

The telecom giant's overall ARPU also dropped 19 percent year-on-year to 40.8 yuan. Chairman and CEO Wang Xiaochu said the decline in ARPU is due to China's "speed upgrade and tariff reduction" policy. But he expects a rebound in ARPU in the second half, adding that July ARPU rose 0.9 yuan.

First-half service revenue of China Unicom slid 1.1 percent to 133 billion yuan, while its earnings before interest, taxes, depreciation, and amortization grew 8.4 percent year-on-year to 49.5 billion yuan.

Wang said the company's 5G expenditure will be around 8 billion yuan this year, and the total investment will reach 58 billion yuan in 2019. He expects the 5G services will be officially launched next month.

Shares of China Unicom fell 0.98 percent to HK$7.05 yesterday.

Meanwhile, CITIC Telecom International (1883) announced its first-half net profit increased by 4.6 percent year-on-year to HK$511.1 million and declared an interim dividend of 5 HK cents. Basic earnings per share was 14.1 HK cents. Shares rose 1.64 percent to HK$3.10 yesterday.

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