VHA performance remains stable
Vodafone Hutchison Australia has maintained its customer base and financial performance amid challenges in a tough competitive environment.
VHA Chief Executive Officer Iñaki Berroeta said competition in the mobile market remained strong.
“VHA’s performance has remained stable in the face of significant headwinds,” Mr Berroeta said.
“We have maintained our customer base and EBITDA despite declines in revenue and ARPU.
“We continue to focus on our customers and are investing in our digital capability to continually improve customer experience.
“I am very pleased that our customer experience is reflected in the fact that we continue to set new standards as an industry leader in customer service. We have just recorded a new record low rate of TIO complaints – less than three per 10,000 customers – which is less than half the industry average.
“We are also in the process of finalising our plans for a new network vendor in the wake of the Federal Government’s security guidance.”
Mr Berroeta said VHA remained committed to a proposed merger with TPG and was pleased the process had been expedited with a Federal Court hearing due to start in September.
He said a stronger third player in the industry with the scale to increase investment would benefit consumers from improved technology and better value plans.
“The merger would create an entity that will increase our ability to invest in networks, new technologies, and even more competitive plans and products for Australian consumers,” he said.
VHA Full Year results (noting the impact of the global IFRS 16 (“AASB 16”) accounting change effective 1 January 2019*):
• Total mobile customer base grew year on year by 11,754 customers to 5.99 million (a 0.2% increase YoY, although down marginally from the December 18 result of 6.02 million);
• Leading Net Promoter Score among Mobile Network Operators;
• Total revenue decreased 1.7 per cent YoY to $1,738.5 million;
• ARPU was $34.52, a decrease of 5.2% YoY;
• EBITDA# increased 14.3 per cent YoY to $584.6 million (but a 0.9% increase on a like for basis without the AASB 16 accounting change).
• VHA’s net loss increased to $153.4m (or $131.8m on a like for like basis without the AASB 16 accounting change) from $92.3m in the corresponding prior period.
VHA Acting Chief Financial Officer Sean Crowley said the results reflected a slowdown on prior periods primarily due to falling ARPU.
“This was because of falling prices and increased inclusions, although EBITDA remained positive thanks to a continued focus on reducing costs,” he said.
“Our progress in the last number of years has been pleasing and despite the challenges presented we strive to continually innovate and bring greater choice and freedom to consumers.
“We will continue to deliver great value propositions and service to our customers, as demonstrated by our bundle and save loyalty discount feature, and our extremely competitive Fixed NBN offering. In turn, our customers are demonstrating increased loyalty to us.”
Notes to editors
Vodafone Hutchison Australia (VHA) is 50:50 joint venture between Vodafone Group Plc and Hutchison Telecommunications (Australia) Limited. Figures relate to VHA performance for the half
year ended 30 June 2019.
* AASB 16 is the Australian equivalent of the IFRS 16 global accounting standard that became effective for VHA from 1 January 2019. AASB 16 establishes principles for the recognition and
measurement of leasing arrangements which has led to the recognition from 1 January 2019 of “right of use” assets on the Balance Sheet for $1,014m along with corresponding lease liabilities
for $1,068m. EBITDA and net losses for the half-year ended 30 June 2019 accordingly include charges for depreciation of the relevant “right-of-use” assets and interest on the lease liabilities
relating to these assets and liabilities. These charges replace costs which were accounted for as operating expenses in the prior comparative period.
# EBITDA represents VHA’s statutory earnings before interest, tax, depreciation and amortisation.