TAIPEI, Aug. 8, 2023
/PRNewswire/ -- Chunghwa Telecom Co., Ltd. (TAIEX: 2412, NYSE: CHT)
("Chunghwa" or "the Company") today reported its un-audited
operating results for the second quarter of 2023. All figures
were prepared in accordance with Taiwan-International Financial
Reporting Standards ("T-IFRSs") on a consolidated basis.
(Comparisons throughout the press release, unless otherwise
stated, are made with regard to the prior year
period.)
Second Quarter 2023 Financial Highlights
- Total revenue increased by 2.0% to NT$
53.46 billion.
- Consumer Business Group revenue increased by 3.9% to
NT$ 32.76 billion.
- Enterprise Business Group revenue decreased by 1.2% to
NT$ 17.54 billion.
- International Business Group revenue increased by 23.2% to
NT$ 2.17 billion.
- Total operating costs and expenses increased by 2.0% to
NT$ 41.20 billion.
- Operating income increased by 2.0% to NT$ 12.26 billion.
- EBITDA increased by 1.0% to NT$ 22.19
billion.
- Net income attributable to stockholders of the parent increased
by 2.9% to NT$ 9.93 billion.
- Basic earnings per share (EPS) was NT$1.28.
- Above mentioned financial indicators, including operating
income, EBITDA, and net income, all exceeded our proposed
guidance.
"I am very pleased with our strong second-quarter results which
reflect our advantages and resilience in this competitive market,"
said Mr. Shui-Yi Kuo, Chairman and
Chief Executive Officer of Chunghwa Telecom. "Financially, we had a
robust H1 EPS of NTD$2.52, a 6-year high, while our financial
results beat all guidance. We experienced impressive growth across
many business segments; to highlight, our mobile business revenue
maintained 22-month sequential growth, growing 6.4% YoY this
quarter, surpassing competitors. Meanwhile, we experienced
substantial subscriber and ARPU year-over-year progress. Our
Taiwan mobile market revenue share
climbed to 39.9% and subscriber share also climbed to 37.0%. As a
result, our incremental excess revenue share above our subscriber
share increased to 2.9%, reflecting our healthier subscriber
structure and better revenue generation compared to our peers."
President Ivan Lin added, "In terms
of emerging enterprise application, the revenue of certain sectors
also grew significantly, as 5G private network revenue ramped up
fourfold, and big data analysis revenue increased 67% YoY. We are
confident to ride on the digital transformation and AI trends to
seize related business opportunities."
"Our industry outlook remains promising, as we embrace the
post-merger benign market, which may stabilize pricing in the near
term and drive accretive value for our customers in the long run.
The steady penetration of 5G in Taiwan is in line with our expectations,
reinforcing our position as a leader in the telecom industry. With
the largest market share and growth potential in our serviced
sectors, Chunghwa is confident in continuing its leadership in this
competitive landscape."
"At Chunghwa, our vision is to become an international benchmark
recognized for sustainable development, leading the way as a
digital ecosystem enabler, empowering stakeholders to drive
innovation and create value. We embrace digital transformation and
uphold core values of integrity, customers' trust, innovation and
value creation, and commitments and accountability. As we navigate
this dynamic industry, we are fueled by an unwavering spirit of
progress, continuously evolving to meet the changing needs of our
customers and the world. We are enthusiastic about the path ahead
and we greatly appreciate our investors' and customers' long-term
and continuing support as we aim for new heights of excellence,"
Mr. Kuo concluded.
Revenue
Chunghwa Telecom's total revenues for the
second quarter of 2023 increased by 2.0% to NT$ 53.46 billion.
Consumer Business Group's income before tax for the second
quarter of 2023 increased 10.4% YoY thanks to the persistent growth
of telecom services, as well as the lesser manpower expenses and
depreciation expenses. Total revenue increased by 3.9% to
NT$ 32.76 billion. Mobile service
revenue increased 6.4% YoY, mainly due to stable 5G migration and
increase in postpaid subscriber growth. In addition, international
roaming revenue continued to recover and brought in meaningful
contribution. Fixed-line service revenue was flat, while the fixed
broadband revenue grew by 2.9% year over year propelled by the
successful upsell of speed upgrade and growth of home Wi-Fi
service. Sales revenue increased 4.8% YoY mainly due to the
stabilized iPhone supply during the quarter.
Enterprise Business Group's income before tax for the second
quarter of 2023 decreased 11.9% YoY, while revenue decreased by
1.2% to NT$ 17.54 billion, mainly due
to the decrease of text business, which has relatively higher
margin, a higher base of a one-time recognition of large smart
energy projects, and internal carbon fee. In spite of ICT
revenue decrease in the second quarter, mobile service revenue
increased attributable to 5G upselling and the recovery of
international roaming revenue. Sales revenue increased from our
subsidiaries. Fixed-line revenue slightly decreased
year-over-year mainly due to voice decline, although data
communication revenue and broadband access revenue continued to
grow as expected.
International Business Group's income before tax for the second
quarter of 2023 decreased 6.6% YoY owing to non-operating expenses,
such as the foreign currency valuation loss and internal carbon
fee. Excluding the impact, IBG continued to experience strong
growth in profit generation at a double digit growth year over
year. Total revenue increased by 23.2% to NT$ 2.17 billion, mainly driven by increasing
demand of our international private leased circuit, and growing
emerging business, including IDC and cloud services from global
clients.
Operating Costs and Expenses
Total operating
costs and expenses for the second quarter of 2023 increased by 2.0%
to NT$ 41.20 billion, mainly due to
higher cost of goods sold and utility cost.
Operating Income and Net Income
Income from operations
for the second quarter of 2023 increased by 2.0% to NT$ 12.26 billion. The operating margin was
22.9%, as compared to 22.9% in the same period of 2022. Net income
attributable to stockholders of the parent increased by 2.9% to
NT$ 9.93 billion. Basic earnings per
share was NT$1.28.
Cash Flow and EBITDA
Cash flow from operating
activities, as of June
30th, 2023, increased by 3.9% year over year to
NT$ 28.47 billion.
Cash and cash equivalents, as of June
30th, 2023, decreased by 8.3% to NT$ 49.76 billion as compared to that as of
June 30th, 2022.
EBITDA for the second quarter of 2023 was NT$ 22.19 billion, increasing by 1.0% year over
year. EBITDA margin was 41.51%, as compared to 41.90% in the same
period of 2022.
Business Highlights
Mobile
As of June
30th, 2023, Chunghwa Telecom had 12.84 million
mobile subscribers, representing a 5.0% year-over-year increase. In
the second quarter, total mobile service revenue increased by 6.4%
to NT$ 16.17 billion, while mobile
post-paid ARPU excluding IoT SIMs grew 4% year over year to
NT$ 545.
Fixed Broadband/HiNet
As of June 30th, 2023, the number of
broadband subscribers slightly increased by 0.3% to 4.38 million.
The number of HiNet broadband subscribers increased by 0.8% to 3.67
million. In the second quarter, total fixed broadband revenue grew
3% year over year to NT$ 10.91
billion, while ARPU increased 1.1% to NT$ 774.
Fixed line
As of June
30th, 2023, the number of fixed-line subscribers
was 9.27 million.
Financial Statements
Financial statements and
additional operational data can be found on the Company's website
at
http://www.cht.com.tw/en/home/cht/investors/financials/quarterly-earnings
NOTE CONCERNING FORWARD-LOOKING STATEMENTS
This press
release contains forward-looking statements. These statements
constitute "forward-looking" statements within the meaning of
Section 27A of the Securities Act of 1933, as amended, and Section
21E of the Securities Exchange Act of 1934, as amended, and as
defined in the U.S. Private Securities Litigation Reform Act of
1995. These forward-looking statements can be identified by
terminology such as "will," "expects," "anticipates," "future,"
"intends," "plans," "believes," "estimates" and similar statements.
Statements that are not historical facts, including statements
about Chunghwa's beliefs and expectations, are forward-looking
statements. Forward-looking statements involve inherent risks and
uncertainties that could cause actual results to differ materially
from the forward-looking statements. A number of important factors
could cause actual results to differ materially from those
contained in any forward-looking statement. Investors are cautioned
that actual events and results could differ materially from those
statements as a result of a number of factors including, but not
limited to the risks outlined in Chunghwa's filings with the U.S.
Securities and Exchange Commission on Forms F-1, F-3, 6-K and 20-F,
in each case as amended. The forward-looking statements in this
press release reflect the current belief of Chunghwa as of the date
of this press release and Chunghwa undertakes no obligation to
update these forward-looking statements for events or circumstances
that occur subsequent to such date, except as required under
applicable law.
This press release is not an offer of securities for sale in
the United States. Securities may
not be offered or sold in the United
States absent registration or an exemption from
registration. Any public offering of securities to be made in
the United States will be made by
means of a prospectus that may be obtained from the issuer or
selling security holder and that will contain detailed information
about the company and management, as well as financial
statements.
NON-GAAP FINANCIAL MEASURES
To supplement the
Company's consolidated financial statements presented in accordance
with International Financial Reporting Standards pursuant to
the requirements of the Financial Supervisory Commission, or
T-IFRSs, Chunghwa Telecom also provides EBITDA, which is
a "non-GAAP financial measure". EBITDA is defined as
consolidated net income (loss) excluding (i) depreciation and
amortization, (ii) total net comprehensive financing cost (which is
comprised of net interest expense, exchange gain or loss, monetary
position gain or loss and other financing costs and derivative
transactions), (iii) other income, net, (iv) income tax, (v)
(income) loss from discontinued operations.
In managing the Company's business, Chunghwa
Telecom relies on EBITDA as a means of assessing
its operating performance because it excludes the effect of
(i) depreciation and amortization, which represents a non-cash
charge to earnings, (ii) certain financing costs, which are
significantly affected by external factors, including interest
rates, foreign currency exchange rates and inflation rates, which
have little or no bearing on our operating performance, (iii)
income tax (iv) other expenses or income not related to the
operation of the business.
CAUTIONS ON USE OF NON-GAAP FINANCIAL
MEASURES
In addition to the consolidated financial results
prepared under T-IFRSs, Chunghwa Telecom also provide non-GAAP
financial measures, including "EBITDA". The
Company believes that the non-GAAP financial measures
provide investors with another method for assessing its operating
results in a manner that is focused on the performance of its
ongoing operations.
Chunghwa Telecom's management believes investors will benefit
from greater transparency in referring to these non-GAAP financial
measures when assessing the Company's operating results, as well as
when forecasting and analyzing future periods. However, the
Company recognizes that:
- these non-GAAP financial measures are limited in their
usefulness and should be considered only as a supplement to the
Company's T-IFRSs financial measures;
- these non-GAAP financial measures should not be considered in
isolation from, or as a substitute for, the Company's T-IFRSs
financial measures;
- these non-GAAP financial measures should not be considered to
be superior to the Company's T-IFRSs financial measures; and
- these non-GAAP financial measures were not prepared in
accordance with T-IFRSs and investors should not assume that the
non-GAAP financial measures presented in this earnings release were
prepared under a comprehensive set of rules or principle.
Further, these non-GAAP financial measures may be unique to
Chunghwa Telecom, as they may be different from non-GAAP financial
measures used by other companies. As such, this presentation of
non-GAAP financial measures may not enhance the comparability of
the Company's results to the results of other companies.
Readers are cautioned not to view non-GAAP results as a substitute
for results under T-IFRSs, or as being comparable to results
reported or forecasted by other companies.
About Chunghwa Telecom
Chunghwa Telecom (TAIEX 2412,
NYSE: CHT) ("Chunghwa" or "the Company") is Taiwan's largest integrated telecommunications
services company that provides fixed-line, mobile, broadband, and
internet services. The Company also provides information and
communication technology services to corporate customers with its
big data, information security, cloud computing and IDC
capabilities, and is expanding its business into innovative
technology services such as IoT, AI, etc. Chunghwa has been
actively and continuously implemented environmental, social and
governance (ESG) initiatives with the goal to achieve
sustainability and has won numerous international and domestic
awards and recognitions for its ESG commitments and best practices.
For more information, please visit our website at
www.cht.com.tw.
Contact: Angela Tsai
Phone: +886 2 2344 5488
Email: chtir@cht.com.tw
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SOURCE Chunghwa Telecom