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China Mobile Profits Soar 118%
China Mobile (HK), the mainland's dominant cellular phone operator, posted a 118 per cent growth in net profit for the first half of the year, in line with analysts' forecasts.
Net profits reached 8.72 billion yuan (HK$7.94 billion) during the period, up from 4 billion yuan (HK$3.64 billion) in the previous six months.
Earnings per share surged to 0.64 yuan from 0.34 yuan a year earlier.
Wang Xiaochu, chairman and chief executive of China Mobile said the strong profits growth was boosted by both a surge in the subscriber base coming from the three new networks that the company acquired late last year and pre-paid card users.
The three provincial networks - including Fujian Mobile, Henan Mobile and Hainan Mobile - that the company acquired in last November have generated about 1.5 billion yuan for the company.
The number of subscribers surged 76.9 per cent to reached 21.638 million from 12.22 million at the end of last year.
Among them, about 2.5 million were pre-paid card users while the 19.14 million were contract users.
Consolidated turnover was 28.89 billion yuan (HK$26.3 billion), representing a year-on-year growth rate of 71 per cent on actual basis and 34.5 per cent growth on proforma basis.
Earnings before interest, tax, depreciation and amortization (EBITDA) was 16.917 billion yuan, up from 9.578 billion yuan a year ago.
Analysts said China Mobile's interim result was in line with market expectation except its EBITDA margin was better than expected due to the company's cost control effort during the period.
China Mobile has lifted its EBITDA margin to 58.2 per cent from 56.5 per cent while analysts forecasted its EBITDA margin would drop to around 54 per cent to 53 per cent due to the continued downward trends of average revenue per user.
Most of the cost savings came from a reduction in leased line expenses and interconnection expenses.
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