HKBN Achieves Business Turnaround in FY2024 Interim Results

Core Business Performance Strengthened, Operational Efficiency Optimised, Setting the Stage for Sustained Growth

HONG KONG, April 26, 2024 /PRNewswire/ — HKBN Ltd. (“HKBN” or the “Company”; SEHK stock code: 1310) today announced its operational and financial results for the six months ended 29 February 2024 (“1H2024”). Despite a challenging and uncertain business environment, HKBN achieved a business turnaround, marking an inflection point towards sustainable profitability. Through enhancing operational efficiency and strengthening core business performance, the Group has established a solid foundation for continuous growth in its Enterprise Solutions and Residential Solutions business.

HKBN announced 1H2024 interim results, as the company accelerated its ICT leadership for sustained growth. (From left) William Yeung, HKBN Co-Owner and Executive Vice-chairman & Group CEO; and Derek Yue, HKBN Co-Owner and CFO.

ANNOUNCEMENT HIGHLIGHT

Revenue decreased year-on-year by 13% to HK$5,809 million, primarily attributed to weaker than expected performance in handset and other products sales. Despite this, the Group’s core business segment, including fixed telecommunications network services, technology solutions, and consultancy services, achieved a stable year-on-year growth of 1%.
EBITDA decreased year-on-year by 4% to HK$1,151 million, mainly due to softer sales of handset and other products, though this was partially offset by reduced operating expenses from operational improvements.
Profit for the six-month period decreased year-on-year by 93% to HK$2 million. Despite the decline, this represents a significant turnaround from an annual loss of HK$1,267 million in the previous fiscal year. In comparison, the adjusted annual loss for the previous year was HK$67 million after excluding the one-time impairment on goodwill. This positive shift is mainly attributable to the Group’s continuous efforts to enhance its core business performance and operational efficiency.
Adjusted free cash flow (“AFF”) decreased year-on-year by 66% to HK$124 million. This was significantly influenced by the prevailing high interest rate environment, which led to a 51% increase in the net interest paid during the review period. In consideration of the Company’s dividend policy and the projected future capital expenditure requirements to create long-term value for all shareholders, the Board has recommended the payment of an interim dividend of 15 HK cents per share (28 February 2023: 20 HK cents per share).

William Yeung, HKBN Co-Owner, Executive Vice-chairman and Group CEO said, “Despite robust demand for digital transformation, the slow economic recovery and escalating interest rates have challenged our customers’ businesses operations and delayed project timelines over the past six months. Nevertheless, we have effectively leveraged our robust telecommunications infrastructure to forge ahead in our ICT transcendence journey, enhancing our core business performance and operational efficiency. These strategic improvements have led to modest growth during this challenging reporting period, laying a solid foundation for sustained future growth.”

Enterprise Solutions: Capturing Growth Through ICT Transcendence

Enterprise Solutions business has continued to strengthen its core business performance and recorded a 3% increase in enterprise services revenue, after excluding international telecommunications services. This growth was complemented by a 20% rise in year-on-year new order bookings and a revenue backlog of HK$4.7b. The cloud services business has been one of the key drivers of this strategic growth, benefited by customers’ strong demand for cloud technology. Notably, the IT packaged solutions IT•Simplified and AegisConnect, launched last year, have generated strong customer interest and significantly boosted service uptake among both new and existing customers. Recently, the business launched OFFICE-IN-A-BOX and SHOP-IN-A-BOX to offer bespoke IT package solutions that address industry-specific challenges.

Moreover, the business has expanded its market presence, particularly in the public and large enterprise sectors, and strengthened its position in the SME sector. Significant progress has been made regionally as it facilitated businesses from mainland China, especially from the Greater Bay Area (GBA), into Hong Kong, and supported both local and global companies to establish themselves in mainland China. Revenue from mainland China and Macau remained stable.

Residential Solutions: Ongoing Infinite-play Strategy for ARPH (Average Revenue for Household) Growth

Residential Solutions business demonstrated resilience with a slight revenue decline of 1% to HK$1,182 million. During 1H2024, the business strengthened partnerships to enhance its offerings, leading to a significant uptake in high-speed fibre services, particularly the 2000Mbps package, which saw a substantial surge from customers upgrades. Service revenue remained steady as the business diligently pursued Infinite-play strategy, diversifying its portfolio of value-added services to deepen customer engagement. This approach significantly enhanced the company’s entertainment ecosystem, featuring platforms such as Netflix, Disney+, myTV SUPER, and iQIYI. Consequently, the residential average revenue per user (ARPU) saw a notable rise of 1% to HK$181.

During the reporting period, the business launched N mobile, a new travel and lifestyle mobile brand, to complement its existing MVNO mobile services. Supported by China Mobile Hong Kong, SmarTone and 3HK, the Group now offers one of the market’s most comprehensive selections of local and roaming options to both Enterprise and Residential customers. Additionally, with travel activity rebounding to pre-pandemic levels, there has been a significant increase in sales of its Global SIM service, driven by a resurgence in consumers’ data roaming needs.

25Gbps Fibre Network: Propelling the Evolution of Connectivity

Core telecom services are instrumental in driving HKBN’s strategic growth. Responding to strong demand for high-speed connectivity across both enterprise and residential markets, HKBN joined hands with Nokia to offer pre-sales of Hong Kong’s first 25Gbps fibre network^. The commercial rollout is set for June 2024, offering customers seamless access to unmatched Internet speeds at competitive prices.

Yeung added, “Our strategic alliance with Nokia positions us to significantly reshape the connectivity landscape. This decisive move will enable HKBN to steadily gain market share and improve revenue from high-margin core services over the next 12 to 18 months, driving solid growth in the crucial sector.”

For more details about HKBN’s results in 1H2024 please refer to the announcement:
https://reg.hkbn.net/WwwCMS/upload/pdf/en/e_FY24_InterimResultsAnnouncement.pdf

^ According to the market data disclosed by major telecommunication service providers in Hong Kong as at 26 April 2024, HKBN is the first telecommunication service provider to pre-sell 25G broadband service in Hong Kong.

About HKBN Ltd.

HKBN Ltd. (SEHK Stock Code: 1310, together with its subsidiaries, “HKBN” or the “Group”) is an investment holding company. Headquartered in Hong Kong with operations spanning across Hong Kong, Macau and mainland China, the Group is a leading integrated telecommunications and technology services provider. The Group provides a full range of one-stop, high-quality information and communication technology (ICT) solutions and an unlimited services portfolio. HKBN’s extensive tri-carrier fibre infrastructure covers over 2.57 million residential homes and 8,100 commercial buildings and facilities across Hong Kong. Committed to creating a lasting positive impact to wherever it operates, HKBN embraces a core purpose to “Make our Home a Better Place to Live” and has received a highest possible rating of AAA in MSCI’s 2023 ESG Ratings assessment in environment, society and governance. The Group is managed by hundreds of Co-Owners (supervisory and management level Talents in the Group) who invested their savings to buy shares of HKBN Ltd.. For more information about HKBN, please visit www.hkbn.net/en.

Source : HKBN Achieves Business Turnaround in FY2024 Interim Results

The information provided in this article was created by Cision PR Newswire, our news partner. The author's opinions and the content shared on this page are their own and may not necessarily represent the perspectives of Thailand Business News.