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HKBN Ltd. Announces FY2017 Interim Results for the 6 Months Ended 28 Feb 2017
[April 20, 2017]

HKBN Ltd. Announces FY2017 Interim Results for the 6 Months Ended 28 Feb 2017

Harvesting Begins with an Enhanced Quad-play Strategy

HONG KONG, April 20, 2017 /PRNewswire/ -- HKBN Ltd. ("HKBN" or the "Company"; SEHK stock code: 1310) today announced its unaudited consolidated results for the six months ended 28 February 2017. During the period, the Company accelerated revenue growth in both residential and enterprise businesses, marking the beginning of harvest with an enhanced quad-play strategy and bigger post New World Telecom integration enterprise ambitions. Key highlights from the interim period include:

  • Revenue and Adjusted Free Cash Flow continued to grow year-on-year at 25% and 3% respectively to HK$1,535 million and HK$191 million. EBITDA decreased by 6% to HK$481 million, due to the two-year contract flow over impact of lower residential ARPU from last year arising from the focus on subscriber growth and the start-up investments associated with its mobile entry in September 2016.
  • Since the beginning of the current financial year on 1 September 2016, HKBN's residential focus has pivoted from subscriber growth to revenue market focus, the Company traded off a slow down on net additions for broadband subscriptions at 21,000 (1H2016: 38,000) in return for an acquisition and renewal contract ARPU of HK$192/month for the month of February 2017, which is well above the historical full base residential ARPU of HK$166/month for the six months to 28 February 2017. If the new price points can be maintained, the full base ARPU is expected to converge with the acquisition and renewal contract ARPU as prices flow through the two-year contract cycle.
  • Enterprise business revenue more than doubled, reaching HK$569 million through the full six-month's operation results following the acquisition of the New World Telecom ("NWT") business in March 2016.
  • The Board of Directors has recommended the payment of an interim dividend of 22 HK cents per share (1H2016: 20HK cents per share).

Revenue market focus resulted in higher residential ARPU

Residential revenue grew by 5% year-on-year to HK$941 million as a result of the customer base expansion from last year. The Company's market share by broadband subscriptions increased to 37.6% as of 31 December 2016 (based on the latest available OFCA statistics), up from 37.2% as of 31 August 2016.

Through working closely with its OTT (Over-the-Top) partners, more than half of its residential broadband customers have ordered at least one OTT set-top box to fulfil their entertainment needs. Since launching its OTT entertainment offerings in October 2015, a total of 627,000 set-top boxes have been ordered by residential broadband customers as of 28 February 2017. The launch of mobile services through partnering with two major mobile network operators also constituted a new and important source of residential revenue for the Company. HKBN achieved a solid customer base with 54,000 activated subscribers during the period, and over 100,000 registered mobile subscribers up to mid-April.

Stimulating enterprise revenue growth contributed by full integration with NWT

The Company's enterprise revenue, which comprised a full six-month's operation results following its acquisition of NWT business, doubled to HK$569 million. This growth is indicative that the fully integrated business has increased HKBN's presence and capabilities in the enterprise market. During the period, the Company achieved net additions of 1,000 for a total of 51,000 enterprise customers while its enterprise ARPU maintained at HK$1,467/month. Its market share by broadband subscriptions maintained at 17.8% as of 31 December 2016 (based on the latest available OFCA statistics).

Harvesting begins with an enhanced quad-play strategy

"This interim results mark the beginning of our quad-play harvest," said William Yeung, Chief Executive Officer and Co-Owner, and NiQ Lai, Chief Operating Officer and Co-Owner, of HKBN. "We have a monthly billing relationship with over 870,000 broadband households, representing over one-third of Hong Kong households. We will continue to leverage this to expand from our double-play centric business on broadband and fixed voice to quad-play, which includes OTT and mobile service offerings. We will also focus on harvesting our substantially expanded enterprise network post NWT integration to assertively grow our enterprise customer base, and introduce our broad range of business-imperative solutions to drive sustainable growth."

For details of HKBN's interim results in FY2017, please refer to the announcement:

Appendix: HKBN CEO & COO Letter

About HKBN Ltd.

HKBN Ltd. (SEHK Stock Code: 1310, together with its subsidiaries, the "Group") is an investment holding company. The Group is Hong Kong's largest provider of residential high speed fibre broadband (symmetrical 100Mbps to 1,000Mbps) services by number of subscriptions, and a fast growing enterprise solutions provider. The Group offers a full range of telecommunications solutions for both the residential and enterprise markets, encompassing broadband and Wi-Fi network services, cloud solutions, data connectivity, data facilities, system integration, mobile services, entertainment and voice communications. HKBN owns an extensive fibre network in Hong Kong, which covers over 2.2 million residential homes passed, representing approximately 81% of Hong Kong's total residential units, and 2,300 commercial buildings. HKBN embraces "Make our Hong Kong a Better Place to Live" as its core purpose, and takes great pride in developing its Talents into a competitive advantage. The Group is managed by about 340 Co-Owners who have invested their own savings to buy HKBN shares, representing the majority of supervisory and management level Talents in the Group.

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SOURCE Hong Kong Broadband Network Limited

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