Chunghwa Underperforms in 3Q - Analyst Blog
30 10월 2012 - 9:45PM
Zacks
Chunghwa Telecom Co.
Ltd. (CHT) declared weak financial results for the third
quarter of 2012. Quarterly total revenue was approximately $1,822.4
million, showing a 2.3% drop year over year. Third-quarter GAAP net
income was approximately $341.7 million, down by 14.6% year over
year. Net earnings per ADR were 45 cents, down 10% year over
year.
Quarterly operating income was
$405.4 million, down 12.8% year over year. Operating margin was
22.2% compared with 24.9% in the year-ago quarter. Third-quarter
2012 EBITDA was $679 million, down 7.6% year over year. Quarterly
EBITDA margin came in at 37.3% compared with 39.4% in the
prior-year quarter. During the third quarter of 2012, Chunghwa
generated around $528.3 million cash from operations, down 17.2%
year over year. Capital expenditure during the reported quarter,
was around $279 million, up 25% year over year.
At the end of the third quarter of
2012, Chunghwa had approximately $1,300.6 million of cash &
cash equivalents and a little over $56 million of outstanding debt
on its balance sheet compared with $3,501.3 million of cash &
cash equivalents and $60 million of outstanding debt at the end of
2011.
Segment wise
Revenue
The Mobile Communications segment
accounted for approximately $833.5 million of the total
third-quarter 2012 revenue, up 4.7% year over year. The Internet
segment accounted for $202.7 million, down 6.1% year over year. The
Domestic Fixed-line Communications segment generated $634.5 million
in revenue, down 7.7% year over year. International Fixed-line
Communications segment generated $129.3 million, up 2.2% year over
year. Other Business segment generated the remaining $22.4 million,
down by a whopping 44.3% year over year.
In the third quarter, Broadband
access (including ADSL and FTTx) revenue was around $161.5 million,
down 3.7% year over year. Mobile VAS revenue was nearly $179.2
million, up 36.5% year over year. Internet VAS revenue was around
$21.8 million, up 5.4% year over year. Handset sales revenue was
$214.1 million, up 14% year over year.
Subscriber Statistics as of
September 30, 2012
Total Broadband subscriber base was
more than 4.564 million, out of which FTTx subscriber base was
around 2.67 million, accounting for 58.5% of total broadband
subscriber base. Broadband subscribers signing up for 50M
connections were over 818,000. HiNet subscriber base was 3.77
million, up 2.6% year over year. Mobile subscriber base was 10.21
million, up 2.5% year over year. Mobile Internet subscriber base
was 2.22 million, up by a significant 68.5% year over year.
Management expects its mobile Internet subscriber base to reach
2.45 million by the end of 2012. International /Domestic Fixed-line
subscriber base was 11.85 million. Multimedia-on-demand (MOD)
subscriber base was more than 1.17 million.
2012 Outlook
Chunghwa reaffirms its financial
outlook for fiscal 2012, provided in February 2012. Total revenue
is estimated around $6,177 million, down 1.9% year over year.
Operating costs and expenses will be approximately $4,702 million,
up 1.8% year over year. Income from operations is estimated to be
approximately $1,475 million, down 11.9% year over year. Net income
will be around $1,282 million, down 16.8% year over year. EBITDA
will be approximately $2,521 million, down 7.3% year over year.
EBITDA margin will be 40.8% compared with 43.2% in fiscal 2011.
Recommendation
Chunghwa faces stiff competition
from Taiwan Mobile Company and Far EasTone Telecommunications Co.
Ltd. The company entered into agreements with China Telecom
Corp. Ltd. (CHA) and China Unicom Ltd.
(CHU) to access software from their application stores for
providing premium services to its subscribers. We maintain our
long-term Neutral recommendation on Chunghwa. Currently, it holds a
short-term Zacks #3 Rank (Hold) on the stock.
CHINA TELCM-ADR (CHA): Free Stock Analysis Report
CHUNGHWA TELECM (CHT): Free Stock Analysis Report
CHINA UNICOM (CHU): Free Stock Analysis Report
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