Hutchison Telecommunications International said Tuesday its first-half net profit fell sharply largely due to a massive one-off gain it booked last year from the sale of its Indian business.

 But the telecommunications operator, 59.33%-owned by conglomerate Hutchison Whampoa, said first-half net profit from continuing operations soared to HK$1.17 billion from HK$57 million a year earlier on a 68% jump in subscribers to 11.1 million, and the appreciation in the Israeli shekel against the Hong Kong dollar.

Chairman Canning Fok said the firm continues to look for acquisition opportunities in emerging markets, but prices remain elevated. Fok also cautioned that the business environment in the markets the company operates in is becoming more difficult amid the global economic slowdown. "We are also concerned about the availability of capital and credit in view of the global credit crunch," he said.

HTIL said in a statement net profit for the six months ended June 30 fell to HK$1.17 billion (US$150 million) from HK$70.09 billion a year earlier.

The firm's first-half net profit last year was boosted by a HK$69.34 billion disposal gain from the sale of its 67% stake in Indian unit Hutchison Essar Ltd. to U.K.-based Vodafone Group PLC.

Its first-half 2008 revenue rose 22% to HK$11.76 billion from HK$9.64 billion a year earlier.

The company operates second-generation mobile-phone services in Hong Kong, Thailand, Israel, Macau, Sri Lanka, Indonesia and Vietnam, and third-generation services in Israel and Hong Kong. It also has a fixed-line business in Hong Kong.

In March, it said it had HK$35 billion in cash available for investments and it is seeking opportunities in emerging telecom markets.

Fok said in a statement Tuesday the company evaluated a number of opportunities to expand its operations in the first half, but "we continue to see that price expectations for emerging market telecom assets have not been significantly dampened."

But he said the company isn't likely to find an appropriate target within the second half.

Chief Executive Dennis Lui said the company is open to selling its stake in its Thailand joint venture, Hutchison CAT Wireless MultiMedia Ltd., to its partner CAT Telecom Public Co. Hutchison owns a majority stake in the joint venture.

Lui said CAT Telecom has expressed interest in buying the company's stake in the joint venture but they haven't started formal talks on the stake transfer yet.

Lui also said HTIL has no plans to sell its Israeli telecom operations nor any of its assets apart from its operations in Thailand.

"Israel is our core business, so we have no plans to sell it," Lui said at the company's first-half results briefing.

Lui's comment was in response to a report by Israel's Haaretz Newspaper Tuesday that said HTIL is looking to sell its controlling stake in Israeli mobile telecom operator Partner Communications Co. (PTNR).

In the first half,revenue from the company's business in Israel rose 29% to HK$6.99 billion on currency appreciation and subscriber growth. Revenue from Israel accounted for 59% of total first-half revenue, HTIL said.

In Hong Kong and Macau, revenue increased 6.5% to HK$3.75 billion, which accounted for 32% of overall revenue.

HTIL said it completed the sale of indirect interests in Ghana on July 11 and expects to book a disposal gain of about HK$295 million in the second half of 2008.

The company also maintained its capital expenditure for 2008 at HK$7.0 billion.

 Hutchison Telecom's results came as Hutchison Telecommunications Australia said separately Tuesday its first half net loss narrowed on year as it continued to grow its subscriber base and revenue.

Hutchison Telecom Australia, which is 63% owned by Hutchison Whampoa, said in a statement that its net loss for the six months ended June 30 narrowed to A$85.4 million from a loss of A$197.3 million a year ago.

Source:Dow Jones