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25th August 2003

Hong Kong : The Hutchison Group’s unaudited profit attributable to shareholders for the half year amounted to HK$6,067 million, a 2% increase compared to the same period last year. Earnings per share amounted to HK$1.42, an increase of 2%.

Inset is Chairman li Ka Shing who issued these results.

These results include a net profit on disposal of investments and provisions of HK$1,922 million representing a profit of HK$1,683 million on the disposal of the Group’s European water businesses and a profit of HK$1,443 million from the disposal of holdings in Vodafone Group and Deutsche Telekom, a release of provisions made in previous years of HK$1,907 million, and a full write-off of the Group’s HK$3,111 million investment in Global Crossing. Excluding exceptional items and the 3G start-up losses in both years, profit attributable to shareholders increased 47%, reflecting healthy continuous growth in the Group’s recurring operations.


The Group’s turnover and EBIT, including the Group’s share of associated companies’
and jointly controlled entities’ turnover and EBIT, are shown by business segment in
Note 2 to the consolidated profit and loss account. Turnover for the period totalled
HK$65,879 million, an increase of 41% over last year, mainly due to additional
turnover contributed by the Kruidvat Group (which was acquired in October 2002),
higher production and commodity prices of Husky Energy, increased throughput in the
ports and related services division and sales of development properties. Total EBIT for
the period was in line with last year and all of the Group’s divisions reported EBIT
ahead of last year, except the telecommunications division, mainly due to the start-up
3G businesses and no dividends being received from Deutsche Telekom.

The Group’s interest expense for the period, including its share of associated companies
and jointly controlled entities’ interest expense and net of the finance and investment
division’s contribution, amounted to HK$1,210 million compared to a net interest
expense of HK$1,804 million in the same period last year. The Group’s net debt to net
capital ratio at 30 June was 18%.

The Group’s 2G and related operations reported turnover of HK$7,055 million and
EBIT of HK$182 million. EBIT was lower than the HK$794 million reported in the
first half last year. Last year’s result included a HK$758 million dividend from
Deutsche Telekom, which paid no dividends this year. Excluding this dividend,
turnover in the Group’s 2G and related operations increased 25% and EBIT increased
406%. The Group currently has over 7.1 million 2G subscribers, an increase of 16%
from the beginning of the year.

In Hong Kong, the Group maintained its position as the largest mobile operator with
approximately 1.7 million subscribers and an approximate 26% market share. This 2G
operation has continued to reduce costs and increase efficiencies, which combined with
average revenue per user in line with last year’s, resulted in EBIT 154% ahead of last
year’s comparable results.

Although affected by a one-time HK$225 million write-off of international bandwidth capacity as a result of Asia Global Crossing’s Chapter 11 bankruptcy process, Hutchison Global Communications, which operates a terrestrial fibre optic network in Hong Kong, reported continued customer growth for its broadband, data and voice services. Excluding this one-time charge, EBIT increased 236%.

In India, the Group’s 2G operations reported EBIT 7% below last year mainly
due to start-up losses in Karnataka, Andhra Pradesh and the city of Chennai, each of
which commenced GSM network services in June last year. Excluding these start-up
losses, EBIT from India’s established operations grew 33%. The Group continues to
penetrate this rapidly growing mobile telecommunications market and currently has a
combined subscriber base of approximately 2.9 million, a 30% increase from the
beginning of the year. In Israel, listed Partner Communications announced a net profit
attributable to shareholders of US$44 million which represented a very significant
improvement over last year’s minimal profit. At 30 June, Partner Communications had
over 1.9 million subscribers and an approximate 29% of the market share. In Australia,
Orange Mobile subscribers increased 6% from the beginning of the year and at 30 June,
subscribers exceeded 278,000. The Orange Mobile operations reported a second
consecutive half year positive earnings before interest expense, taxation, depreciation
and amortisation (“EBITDA”) result of A$12 million, a significant improvement over
the comparable loss of A$16 million incurred in the first half last year.

During the period, the 3G operations in the UK, Italy and Australia commenced
commercial operations. The combined 3G start-up operations reported total turnover of
HK$245 million and a loss before interest expense and taxation (“LBIT”) of HK$3,895
million. The current summer promotional offerings in the UK, Italy, and Australia have
been very well received, resulting in current subscribers of approximately 155,000 in the UK, 300,000 in Italy and 50,000 in Australia, which combined with subscribers in
Sweden and Austria total approximately 520,000 worldwide.

The Group is working with its handset suppliers to ensure an adequate supply of handsets to meet expected strong consumer demand in the fall and Christmas period. In the UK, the continuing roll-out of network coverage is progressing very well and the over 4,300 cell sites now in operation cover over 70% of the UK population and all major cities in the country.

In Italy, network rollout progress is also satisfactory and the over 3,200 cell sites on air
cover over 50% of the population and 70 of the top 100 cities in the country. In
Australia, network coverage extends to the five largest cities with over 500 cell sites on
air. The Group’s 3G operations in Sweden and Austria have started business with a soft
launch and are continuing to roll out their networks in readiness for a fall and Christmas
promotion campaign. Currently, Sweden’s network covers most major cities with over
950 cell sites on air. Full coverage is targeted when the joint venture network is
completed. In Austria, the network covers approximately 30% of the population
including major cities like Vienna, Graz and Linz. In Denmark, network rollout
covering major centres is being completed and business is targeted to commence in the
fourth quarter. In Hong Kong, the construction of the 3G network has been completed
and 3G services are scheduled to be launched after the summer period with a network of
over 1,000 cell sites providing full coverage.