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China Unicom's FY'17 profits nearly triple YOY amid ownership reform

China Unicom (Hong Kong) Ltd.'s net profit nearly tripled for the year ended Dec. 31, 2017, on the back of cost control and mixed-ownership reform.

The state-owned mobile operator said March 15 that profit attributable to the company's equity shareholders for 2017 was 1.83 billion Chinese yuan, a 192.5% year-over-year increase from 625 million yuan.

The company's 2017 revenue rose slightly to 274.83 billion yuan from 274.20 billion yuan a year earlier. Service revenue was 249.02 billion, up by 4.6% year over year.

China Unicom posted a 2.59 billion yuan pretax profit in 2017, up from 784 million yuan in 2016. It declared a final dividend of 5.2 fen per share.

The Chinese telco also benefited from the completion of the capital injection delivered by the mixed-ownership reform, with its liabilities-to-assets ratio down to 46.8% from 62.9% a year earlier.

The mixed-ownership reform, announced in August 2017, aimed to raise about 77.91 billion yuan from investors, including China's biggest tech companies Tencent Holdings Ltd., Baidu Inc., JD.com Inc. and Alibaba Group Holding Ltd.

In 2017, China Unicom yielded 156.44 billion yuan in mobile service revenue; a 7.9% increase from 145.02 billion yuan a year earlier. Mobile billing subscribers increased by 20.34 million to 284.16 million in total. Average revenue per mobile user was 48 yuan, up from 46.4 yuan year over year.

China Unicom's 4G subscribers rose by 70.33 million to 174.88 million year over year, while fixed-line broadband subscribers reached 76.54 million from 75.4 million over the same period.

For the first two months of 2018, the company added 5.677 million mobile billing subscribers, while overall service revenue rose 8.2% from a year earlier to about 43.22 billion yuan. Profit attributable to the equity shareholders of the company for January to February was 1.76 billion yuan, up by 287% from a year earlier.

China Unicom said CapEx in 2018 is not expected to exceed 50 billion yuan, compared with 42.13 billion yuan in 2017, as it starts investing in new technologies, such as 5G and Narrowband-internet of things.

As of March 15, US$1 was equivalent to 6.32 Chinese yuan.