China Unicom CEO confident of turnaround despite 80% drop in H1 net profit

China Unicom insisted it had laid the foundations for future success during the opening half of 2016, despite recording a near 80% year-on-year drop in net profit during the period.

 

The operator saw its net profit fall to CNY1.4 billion (€186 million/$211 million) in the opening six months of 2016, which the South China Morning Post noted was the biggest drop recorded by the company since 2000, when it listed on the Hong Kong stock exchange.

 

China Unicom’s earnings statement revealed that revenue declined 3.1% year-on-year to CNY140 billion and EBITDA fell 18.2% to CNY41.2 billion during the first half of 2016.

 

The operator stated that it focused on delivering “long-term sustainable development” as part of a broader growth strategy during the period. As a result, China Unicom has built “a more solid foundation” for future development that the operator believes will boost growth momentum moving forward.

 

China Unicom’s chairman and CEO Wang Xiaochu told journalists that the company is close to a turnaround, the South China Morning Post reported. Wang said the operator increased its focus on costs and strengthened its underlying capabilities during the period, setting it up for a gradual turnaround in performance.

 

Beyond the headline figures, China Unicom stated that it generated CNY73 billion in mobile service revenues during the opening half of 2016, some 0.6% down on the 2015 period. However, the operator noted that the rate of decline in the first six months of 2016 was lower than the 8% year-on-year drop in mobile service revenues recorded through the first half of 2015.

 

The operator added 8.39 million mobile subscribers in the first half of 2016, taking its total mobile customer base to 260.7 million by end-June. Some 72.4 million of those subscribers were on 4G contracts, and the operator said the next-generation mobile technology would be key to its future earnings turnaround.