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SmarTone Profits Drop 24% on Roaming Decline

SmarTone Telecommunications, a leading communication service provider in Hong Kong, last week announced its financial results for the year ended June 30, 2020. Smartone roaming had an important role.

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Just like any other operator, SmarTone was faced with one of the most challenging years as the COVID-19 pandemic severely affected both business operations and our customers’ way of life.

In the last financial year, SmarTone recorded a 24% drop in underlying profit from $581 million to $440 million, excluding the one-off cost adjustment in FY19 and an impairment in FY20. The decline was primarily due to the collapse in roaming revenues (both inbound and outbound) as international travel was severely restricted.

Leaving the impact of roaming aside, the core business of SmarTone was resilient during the last
financial year. The number of subscribers increased by 6% to 2.7 million, with postpaid churn rate
improved to an industry-low of 0.7% due to SmarTone’s outstanding network performance and
customer services. Under the non-HKFRS 16 accounting standard, service revenues excluding
roaming increased by 1%, and operating costs have been kept flat. The company also saw strong
growth in the enterprise business, with its solutions widely recognised for helping corporations to
improve performance and enhance efficiency.

With the launch of 5G service in May, the service uptake has exceeded expectations. SmarTone
will continue to invest in the network to provide an unparalleled 5G network experience with the
widest network coverage.
In line with the company’s 75% payout policy, the Board proposes a final dividend of 15 cents.
making a full-year dividend of 29.5 cents per share, based on underlying profit attributable to
equity holders of $440 million (excluding one-off items).

Mr. Allen Fung, Deputy Chairman and Executive Director of SmarTone Telecommunications
Holdings Ltd., said: “Looking ahead, the coming year is still likely to be a very difficult one with
the uncertain economic environment, but SmarTone sees a number of opportunities for the
company to expand revenue streams. Our commitment in providing an outstanding network and
superior customer service only becomes more steadfast. I believe SmarTone already has the
strongest 5G network with the best coverage in Hong Kong, and we will continue to invest in 5G
to reinforce our technology leadership.”

Earlier this year, in April, SmarTone has announced it expects to see a “substantial decline” in profit of around 30 percent for the year ending 30 June 2020 (FY20), compared to HKD 632 million for the year ended 30 June 2019.  smartone roaming

 

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