=DJ UPDATE: Hutchison Telecom 2009 Net Profit Jumps; Restates 2008 Results

(Adds chairman's comments on privatization and company's plans to sell Thailand operation.)

    By Lorraine Luk
    Of DOW JONES NEWSWIRES

HONG KONG (Dow Jones)--Billionaire Li Ka-shing's Hutchison Telecommunications International Ltd. (HTX) reported Thursday its net profit last year more than quadrupled from a year earlier due to a hefty gain from the sale of its Israel unit and because it restated its 2008 earnings to reflect a change in accounting.

The results came after the telecom services provider postponed its 2009 earnings release last month noting that it was still in discussions with the U.S. Securities and Exchange Commission over the company's treatment of gains it made from a HK$3.88 billion (US$500 million) sale of telecom towers in Indonesia.

Parent Hutchison Whampoa Ltd. (0013.HK), which owns a 60.4% stake, said in January it will pay as much as HK$4.23 billion ($545 million) to buy out minority shareholders to take over Hutchison Telecom.

Hutchison Telecom said its net profit for the twelve months ended Dec. 31 rose to HK$4.94 billion from a restated HK$1.13 billion in 2008. But the net profit came below the average HK$7.13 billion forecast of three analysts polled by Thomson Reuters. Its 2009 revenue rose 2.7% to HK$1.86 billion from a restated HK$1.81 billion a year earlier.

Hutchison Telecom's 2009 earnings were boosted by a HK$6.33 billion disposal gain from the sale of its 51.3% stake in Partner Communications Co. to Scailex Corp.

Previously, Hutchison had reported net profit of HK$1.88 billion on revenue of HK$23.73 billion in 2008. The company said it had to restate the reported 2008 figures to reflect a change in the treatment of a set of sale-lease back transactions on telecommunication towers in Indonesia. Previously it treated the transaction as an operating lease, but they have now been restated to reflect the transaction as a finance lease. That would mean deferring and amortizing the gain from the sale of the capacity leased back by the company and recognizing depreciation expense on leased assets and interest expense on lease payments as charges.

But Hutchison Telecom said the accounting change doesn't affect its parent company's plans to take over the company.

"We have sought and received confirmation from the offerer that the proposal for privatization remains unaffected by the decision of the company to amend and restate its previously reported accounts for the year ended 31 December 2008," Chairman Canning Fok in a statement.

Fok also said the company remains in talks with state-owned telecommunications operator CAT Telecom Public Company Ltd. to sell its Thailand operation.

Investors had been banking on the company to pay out special dividends from its cash reserves following a spate of earlier asset disposals such as the sale of its mobile-phone assets in India and Israel, but Hutchison Telecom said Thursday it won't pay a dividend for 2009.

The telecom company has, in recent years, disposed of crown jewel mobile-phone assets in India and Israel, and also spun off its profitable Hong Kong and Macau business, Hutchison Telecommunications (Hong Kong) Ltd. (0215.HK). Hutchison Telecom has been left with unprofitable operations in Sri Lanka, Indonesia, and Vietnam.

-By Lorraine Luk, Dow Jones Newswires; 852-2802-7002; lorraine.luk@dowjones.com

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(END) Dow Jones Newswires

March 04, 2010 06:14 ET (11:14 GMT)

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