Unicom warns to expect an 80% profit slump for H1

China Unicom has warned it expects to report an 80% year-on-year slump in net profit for the first half of the year as a result of a surge in expenses.

In a stock exchange filing, the operator said that selling and marketing expenses grew significantly during the six month period.

New tower usage fees resulting in the outsourcing of tower assets to new joint venture China Tower, higher energy charges and property rentals also contributed to the growth of expenses.

China Unicom reported a profit for 1H15 of 6.99 billion yuan, so the company is estimating a profit fo the period of around 1.4 billion yuan.

The operator noted that this is nonetheless a significant improvement of the 3.36 billion loss – excluding the gain from the tower asset disposals – recorded during the second half of last year.

The filing also states that Unicom’s mobile business has “achieved initial success in overcoming operational challenges.”

As a result the company achieved a net addition of mobile subscribers of 8.39 million during the period. This compares favorably to the operator’s performance last year, when the company recorded net losses of customers for consecutive months.