SmarTone net sinks 85%

SmarTone’s full-year income dived 85%, the company announced Tuesday as it warned of “continuing intense competition” in the Hong Kong mobile market.

 

The recession hit demand for mobile phones, services and roaming, SmarTone said as it delivered earnings of HK$61.65 million ($7.9 million) for the 12 months to June 30.

 

Revenue shrank 9% to HK$3.70 billion, with handset sales down 30%, service revenue off 5% and blended ARPU declining 7% to HK$220.

 

Roaming revenue was “substantially” below last year’s level, the company said.

 

Data revenue increased 16% but was unable to “offset the continuing decline in local tariffs and the lower roaming revenue,” chairman Raymond Kwok said. 

 

He said while the economy had improved recently, the business environment remained “very challenging.”

 

“On-going competition in the local market is expected to result in lower tariff and higher handset subsidies,” he warned.

 

“In the light of the difficult economy and continuing intense competition, profitability will remain under pressure and improvement is uncertain.”