Chairman’s Message
HTAL Operations and 2023 Financial Results
Hutchison Telecommunications (Australia) Limited (ASX: HTA) (“HTAL” or the “Company”, and together with its controlled entity, the “Group”) reports a statutory net loss of $124.0 million for the year ended 31 December 2023, compared with a net loss of $398.4 million for the comparative year ended 31 December 2022. This represented a $274.4 million decrease in net loss when compared to the year ended 31 December 2022.
This is because in the comparative year ended 31 December 2022, the Group recognised a one-off non-cash impairment loss of $444.6 million on its 25.05%(1) interest in TPG Telecom Limited (“TPG”) due to the carrying amount having exceeded the recoverable amount, which was determined by referencing an indicative share price, including a significant influence premium given the parcel of shareholding and significant influence held by HTAL. However, in 2023, no further impairment has been recognised as the recoverable amount is judged to be in excess of the carrying amount of investments.
HTAL’s revenue represents interest income. For the year ended 31 December 2023, revenue increased to $0.9 million from $0.2 million for the comparative year ended 31 December 2022, driven by the increase in interest rates, as well as higher cash and cash equivalents during 2023. HTAL’s operating expenses for the year ended 31 December 2023 increased to $1.8 million from $1.7 million for the comparative year ended 31 December 2022.
The 2023 results included $123.1 million share of net loss of equity-accounted investments in Vodafone Hutchison (Australia) Holdings Limited (“VHAH”)(2) and TPG. Compared to $47.7 million share of net profit in 2022, this represented a decrease in share of net profit of $170.8 million. The movement was primarily driven by a $75.2 million increase in HTAL’s share of VHAH’s net finance costs and a $95.6 million decrease in HTAL’s share of TPG’s net profit (after consolidation adjustments). The increase in the share of VHAH’s net finance costs was attributable to an increase in interest rates. The decrease in the share of TPG’s net profit was primarily attributable to an increase in TPG’s net finance costs reflecting an increase in lease interest costs arising from the full-year lease interest cost impact of the tower assets sale and leaseback transaction concluded in 2022, a new tower lease agreement signed in 2023, and higher average interest rates on debt, partly offset by higher service revenue. The decrease in sharing was also impacted by the lack of any one-off accounting gains recognised by TPG in 2023 whereas in 2022 TPG recognised a one-off accounting gain from the sale of TPG’s passive tower assets.
HTAL’s wholly owned subsidiary Hutchison 3G Australia Holdings Pty Limited (“H3GAH”), which holds the Group’s 11.14% direct interest in TPG, received dividends of $37.3 million from TPG during the year 2023. These dividends were advanced to HTAL on an interest-free basis. Part of the proceeds from the interest-free advance was used to fund a $5.4 million repayment of a borrowing facility granted by a subsidiary of the ultimate parent entity, CK Hutchison Holdings Limited. The facility was terminated on 30 June 2023. Additionally, VHAH received dividends of $93.1 million from TPG during the year 2023.
TPG 2023 financial results
TPG announced a total revenue of $5,533 million, earnings before interest, tax, depreciation and amortisation (“EBITDA”) of $1,875 million, and a net profit after tax of $49 million for the year ended 31 December 2023, compared to $5,415 million revenue, EBITDA of $2,135 million and a profit of $513 million respectively for the year ended 31 December 2022.
For further details and an explanation of TPG’s results for the year ended 31 December 2023, you may refer to TPG’s 2023 annual report which was lodged with the ASX on 26 February 2024.
HTAL remains committed to its investment in TPG and will continue to support TPG in the future.
Frank John Sixt
Chairman
(1) HTAL’s 25.05% ownership interest in TPG comprises 11.14% interest directly held by H3GAH, a wholly owned subsidiary of HTAL, and an attributed 13.91% interest indirectly held by H3GAH through VHAH, a company domiciled in the United Kingdom in which H3GAH has a 50% shareholding. VHAH has a direct 27.82% interest in TPG.
(2) VHAH holds a direct 27.82% interest in TPG. VHAH is a company domiciled in the United Kingdom and in which H3GAH holds a 50% interest.