SmarTone's underlying profit stays flat

Caroline Zheng

SmarTone Telecommunications (0315) posted a 75 percent year-on-year rise in net profit to HK$470 million for the fiscal year ending in June, though its underlying profit remained flat compared to last year after excluding a provision made for potential investment losses in the previous year.

The local telecom services provider maintained its final dividend at 17.5 HK cents, bringing the full-year dividend to 32 HK cents. The dividend yield stood at 8.3 percent based on yesterday's closing price of HK$3.84.

Revenue dropped 8 percent to HK$6.22 billion from a year ago, mainly due to lower handset and accessory sales, which fell 22 percent to HK$1.71 billion from the previous year.

Its service revenue edged down 1 percent year-on-year to HK$4.51 billion despite the continued recovery of the roaming business. Roaming revenue increased 44 percent, with outbound roaming revenue among consumers recovering to 141 percent of the pre-pandemic level as of June.

The number of customers expanded by 1 percent to 2.71 million by the end of June, with average revenue per user for its monthly mobile service plans at HK$224, the same as last year.

Chief executive Fiona Lau Yeuk-hung said the ARPU of its 5G service has doubled that of 4G, believing the firm can maintain stable ARPU levels in the high-end customer segment as 5G penetration increases. The penetration rate of its 5G service stood at about 40 percent as of June.

On exiting the Macau market, the firm said it encountered constraints in providing quality service and believed it should focus on Hong Kong businesses. The company suffered a loss of over HK$20 million annually for the last two years from its Macau operations.

Looking ahead, the firm said its capital expenditure has peaked and will gradually come down in the coming years.