Italy boost puts Wind in Three's sales

By:
James Pearce
Published on:

Italian merger with VimpelCom helped boost sales for Three Europe, as parent CK Hutchison outperformed analyst expectations with annual results

CK Hutchison the Honk Kong giant that owns the Three Group and the Hutchison group of telcos, saw revenue exceed expectations, despite a challenging 2016.

Hutchison, owned by Li Ka-Shing, saw a takeover bid for Telefonica’s UK arm rejected last year, whilst its holdings in the UK were also hurt by June’s Brexit vote, but still posted income of $4.25 billion, above Bloomberg’s estimate of $4.08 billion.

That was a 6% rise year-on-year for the group, which was formed when Li merged Hutchison Whampoa with Cheung Kong Holdings in 2015. However, revenue dipped by 6% to $47.8 billion.

Part of the growth was driven by its UK arm, which saw revenues rise by 4% on 2015 to £2.2 billion. EBITDA at Three UK was also up, to £719 million, a 5% rise on the previous year.

Despite the failed tie-up with O2, which was rejected by European regulators over competition concerns, Three grew its customer base by 618,000 to 11.4 million.

Hutchison did successfully merge its Italian operation in 2016, however, launching Wind Tre as a joint venture with VimpelCom.

The launch helped to boost Three Europe’s revenues by 5% on 2015, when considering local currency changes. Sales in Italy were up by 12% because of the deal, according to Three. It also saw revenues grow in Austria (5%), Denmark (2%) and Sweden (3%).

Li said the outlook remains uncertain due to changes in the market and politics, but claimed the group’s fundamentals remained strong.

"The impact of Brexit negotiations, new U.S. presidential policies and upcoming elections across Europe remain unknown and could affect the economic environment of countries in which the group operates," he said in the results statement.