SmarTone sees 17 percent rise in profit to $444.6 million

SmarTone Telecommunications (0315) recorded a 17 percent increase in net profit to HK$444.6 million in the financial year ended June 30, due to cost reductions, increase in productivity and local service revenue.

Revenue fell 3.81 percent to HK$6.72 billion in the period and a final dividend of 15.5 HK cents was proposed.

Earnings before interest, taxes, depreciation and amortization rose 1 percent to HK$2.46 billion, and  basic earnings per share were 39.9 HK cents.

The telecoms giant's customer base remained steady at 2.7 million with an increasing number of customers upgrading to 5G and the postpaid churn rate was at 0.8 percent. Service revenue decreased by 5 percent to HK$4.34 billion, mainly due to a 58 percent decrease in roaming revenue, though a two-percent increase in local service revenue partially offset the drop.

Its mobile postpaid average revenue per user fell 6 percent to HK$199 and the handset and accessory sales fell 1 percent to HK$2.38 billion.

The company expected the costs in spectrum amortization next year will exceed HK$400 million, which is close to its annual profit because of the renewal of certain segments of the 4G spectrum.

Since 2001, SmarTone has already paid a staggering HK$5.9 billion on spectrum fees and spectrum costs have been a major cost item for mobile operators, on top of normal taxes that every company pays, the company said.