SmarTone Telecommunications Holdings (315) H1 2025 earnings summary

Executive summary

• Profit attributable to shareholders rose 4% year-over-year to HK$256 million, excluding one-off items, amid a highly competitive market with ARPU pressure.

• Total revenue increased 3% year-over-year to HK$3,492 million, driven by higher handset and accessory sales, while service revenue remained steady at HK$2,303 million.

• Customer base expanded to 2.87 million, up 8.5% year-over-year, with 5G penetration at 40%.

• 5G Home Broadband EBITDA grew 20% year-over-year, with strong adoption among renters and new immigrants.

• Enterprise Solutions profit contribution increased 13% year-over-year, leveraging smart city, mega event trends, and expansion into healthcare.

Financial highlights

• EBITDA increased 3% year-over-year to HK$1,279 million, with a stable margin of 37%.

• Service EBITDA margin improved by 1 percentage point to 54%.

• Interim dividend declared at 14.5 cents per share, unchanged year-over-year.

• Core CapEx reduced by 36% year-over-year to HK$122 million; net cash at HK$1,588 million.

• Depreciation, amortization, and loss on disposal decreased 2% to HK$859 million.

Outlook and guidance

• Growth anticipated in 5G Home Broadband, roaming, and enterprise solutions, with continued investment in network quality, AI adoption, and security solutions.

• CapEx spend reduction for the full year anticipated in the high teens percentage.

• Focus on expanding product offerings, including anti-hacking and AI solutions, and leveraging government support for 5G expansion.

• Persistent competitive landscape and ongoing cost control expected.

• Workshops and educational initiatives planned to help customers benefit from new technologies.