TAIPEI, Taiwan, Jan. 30, 2019 /PRNewswire/ -- Chunghwa Telecom
Co., Ltd. (TAIEX: 2412, NYSE: CHT) ("Chunghwa" or "the Company")
today reported its un-audited operating results for the fourth
quarter and full year of 2018. All figures were prepared in
accordance with Taiwan-International Financial Reporting Standards
("T-IFRSs") on a consolidated basis.
Due to the adoption of IFRS 15 starting from January 1, 2018, Chunghwa Telecom chose the
modified retrospective method. The figures in 2018 were calculated
in accordance with IFRS 15 while the figures in 2017 were prepared
under the basis before the adoption of IFRS 15.
(Comparisons throughout the press release, unless otherwise
stated, are made with regard to the prior year
period.)
Fourth Quarter 2018 Financial Highlights
- Total revenue decreased by 8.9% to NT$55.46 billion.
- Mobile communications revenue decreased by 13.6% to
NT$25.03
billion.
- Internet revenue increased by 9.9% to NT$8.50 billion.
- Domestic fixed communications revenue decreased by 8.1% to
NT$18.02 billion.
- International fixed communications revenue decreased by 15.4%
to NT$3.0 billion.
- Total operating costs and expenses decreased by 9.8% to
NT$45.45
billion.
- Net income attributable to stockholders of the parent decreased
by 3.0% to NT$8.42 billion.
- Basic earnings per share (EPS) was NT$1.09.
Full Year 2018 Financial Highlights
- Total revenue decreased by 5.3% to NT$215.46 billion
- Mobile communications revenue decreased by 7.7 % to NT$100.94 billion
- Internet revenue increased by 3.1% to NT$29.8 billion
- Domestic fixed communications revenue decreased by 6.2 % to
NT$66.8 billion
- International fixed communications revenue decreased by 1.0 %
to NT$13.4 billion
- Total operating costs and expenses decreased by 4.9 % to
NT$171.94 billion
- Net income attributable to stockholders of the parent decreased
by 8.6 % to NT$35.52 billion
- Basic EPS was NT$4.58
Mr. Yu Cheng, Chairman and CEO of
Chunghwa Telecom, stated, "Competition in the overall market for
the fourth quarter of 2018 remained intense, but we were pleased to
see successful consolidation of our customer base in major
segments. In our mobile business, we kept our leading market
position in mobile subscribers and mobile revenue with market share
of 36.3% and 37.8%, respectively. To maximize growth of mobile
subscribers and mobile revenue, we will offer diversified rate
plans and product portfolio to satisfy differing customer demands
and encourage greater sign-ups of higher price plans in 2019. For
the broadband and the MOD segment, we also maintained our leading
market position in Taiwan with 4.5
million and more than 2 million subscribers respectively in the
fourth quarter. We expect continued growth of MOD subscribers with
our high quality content, such as the exclusive Netflix
4K streaming introduced in
January."
"In 2019, we aim to enhance overall business performance by
making our research, sales and service distribution more efficient.
In particular, we expect our ICT business will rebound as we
develop more ICT-focused solutions with our advantages in
capabilities of cloud operations, big data analysis, and
block-chain technologies. We also aim to further expand our IDC
business, which reported an increase in revenue and traffic volume
in 2018, by continuing the third phase of construction of the
highest rated data center in Banqiao. We remain committed to
diversifying our growth drivers and solidifying our industry
leadership in 2019 and in the years to come," Mr. Cheng
concluded.
Revenue
Chunghwa Telecom's total revenues for the fourth quarter of 2018
decreased by 8.9% to NT$55.46
billion.
Mobile communications revenue for the fourth quarter of 2018
decreased by 13.6% to NT$25.03
billion. Due to increased market competition and VoIP
substitution, mobile service revenue decreased year-over-year, and
smart device sales decreased as well.
Internet business revenue for the fourth quarter of 2018
increased by 9.9% year over year to NT$8.50
billion. The increase was primarily attributable to the
growth of Application VAS revenue.
Domestic fixed revenue for the fourth quarter of 2018 decreased
by 8.1% year over year to NT$18.02
billion, mainly due to lower local telephone service and ICT
project revenue. The decrease in local telephone service revenue
was primarily driven by the increased mobile and VoIP
substitution. Broadband access revenue decreased by 1.0% to
NT$4.58 billion.
International fixed communications revenue decreased by 15.4% to
NT$3.0 billion.
Total revenue for the full year of 2018 decreased by 5.3 % year
over year to NT$215.46 billion.
Operating Costs and Expenses
Total operating costs and expenses for the fourth quarter of
2018 decreased by 9.8% year over year to NT$45.45 billion, mainly due to the lower cost of
goods sold.
Total operating costs and expenses for 2018 decreased by 4.9 %
year over year to NT$171.94
billion.
Operating Income and Net Income
Income from operations for the fourth quarter of 2018 decreased
by 2.1% to NT$10.21 billion. The
operating margin was 18.4%, as compared to 17.1% in the same period
of 2017. Net income attributable to stockholders of the parent
decreased by 3.0% to NT$8.42 billion.
Basic earnings per share was NT$1.09.
Income from operations for 2018 decreased by 6.6 % to
NT$43.62 billion. The operating
margin was 20.3%, compared to 20.5% for 2017. Net income
attributable to stockholders of the parent decreased by 8.6 % to
NT$35.52 billion. Basic earnings
per share was NT$4.58.
Cash Flow and EBITDA
Cash flow from operating activities for the fourth quarter of
2018 decreased by 19.6% to NT$20.11
billion.
Cash and cash equivalents, as of December
31st, 2018, decreased by 4.1% to NT$27.66 billion, as compared to that as of
December 31st, 2017.
EBITDA for the fourth quarter of 2018 decreased by 1.3% to
NT$18.19 billion. EBITDA margin was
32.8%, as compared to 30.3% in the same period of 2017.
EBITDA for 2018 decreased by 4.0 % to NT$75.49 billion, and EBITDA margin was 35.0%,
compared to 34.6% for 2017.
Capital Expenditure ("Capex")
Total Capex for the fourth quarter of 2018 decreased by 10.5% to
NT$9.21
billion.
Business and Operational Highlights
Broadband/HiNet
The Company continued to execute its strategy of encouraging
FTTx migration. As of December
31st, 2018, the number of FTTx subscribers
reached 3.60 million, accounting for 80.3% of the Company's total
broadband users. Moreover, the number of subscribers signing up for
speeds of 100Mbps or higher increased by 10.9% year over year,
reaching 1.42 million.
HiNet broadband subscribers decreased by 1.3% year over year to
3.68 million as of December
31st, 2018.
Mobile
As of December 31st,
2018, Chunghwa Telecom had 10.59 million mobile subscribers,
representing a 1.4% year-over-year increase. The Company also had
9.63 million mobile Internet subscribers, representing a 15.9%
year-over-year increase.
As of December 31st,
2018, the Company accumulated 9.46 million 4G subscribers.
Fixed line
As of December 31st,
2018, the Company maintained its leading position in the fixed-line
market, with a total of 10.42 million subscribers.
(in NT$
billion)
|
2018
|
2017
|
YoY%
|
4Q18
|
Jan.-Dec.
|
4Q18
|
Jan.-Dec.
|
4Q18
|
Jan.-Dec.
|
Revenue
|
55.46
|
215.46
|
60.88
|
227.51
|
-8.9
|
-5.3
|
Operating costs and
expenses
|
45.45
|
171.94
|
50.38
|
180.71
|
-9.8
|
-4.9
|
Other income and
expense (Note 1)
|
0.20
|
0.11
|
-0.07
|
-0.10
|
376.1
|
202.9
|
Operating
income
|
10.21
|
43.62
|
10.43
|
46.70
|
-2.1
|
-6.6
|
Pretax
income
|
10.50
|
44.97
|
10.74
|
48.00
|
-2.3
|
-6.3
|
Net income
attributable to stockholders of the parent
|
8.42
|
35.52
|
8.68
|
38.87
|
-3.0
|
-8.6
|
EBITDA
|
18.19
|
75.49
|
18.42
|
78.60
|
-1.3
|
-4.0
|
EPS(NT$)
|
1.09
|
4.58
|
1.12
|
5.01
|
-3.0
|
-8.6
|
Note 1: "Other income
and expenses" includes gains (losses) on disposal of property,
plant and equipment (PP&E) and investment property, and
impairment loss on PP&E and investment
property.
Note 2: The
calculation of growth rates is based on NT$ thousand.
|
2019 Guidance
For 2019, the Company expects total revenue to increase by
2.4~3.5%, to NT$220.56~NT$222.91 billion as compared to the
un-audited consolidated total revenue of 2018. Operating costs and
expenses are expected to increase by 3.4%~3.7%, to
NT$177.84~NT$178.25 billion as compared to the prior
year. Income from operations is expected to decrease by
2.1%~ increase by 2.3% to NT$42.69~NT$44.63 billion, year over
year. Income before income tax and net income attributable to
stockholders of the parent are expected to be NT$43.82~NT$45.76
billion and NT$34.11~NT$35.68 billion, respectively. Basic earnings
per share is expected to be NT$4.40~NT$4.60. Acquisition of
Material Assets in 2019 is expected to increase by NT$4.64 billion as compared to the prior
year.
(NT$ billion except
EPS)
|
2019(F)
|
2018
(un-audited)
|
change
|
YoY(%)
|
Revenue
|
220.56~222.91
|
215.46
|
5.10~7.45
|
2.4%~3.5%
|
Operating Costs and
Expenses
|
177.84~178.25
|
171.94
|
5.90~6.31
|
3.4%~3.7%
|
Other Income and
Expense
|
(0.03)
|
0.10
|
(0.13)
|
(129.5%)
|
Income from
Operations
|
42.69~44.63
|
43.62
|
(0.93)~1.01
|
(2.1%)~2.3%
|
Non-operating
Income
|
1.13
|
1.35
|
(0.22)
|
(16.3%)
|
Income before Income
Tax
|
43.82~45.76
|
44.97
|
(1.15)~0.79
|
(2.6%)~1.8%
|
Net Income
Attributable to Stockholders of The Parent
|
34.11~35.68
|
35.52
|
(1.41)~0.16
|
(4.0%)~0.5%
|
EPS(NT$)
|
4.40~4.60
|
4.58
|
(0.18)~0.02
|
(4.0%)~0.5%
|
EBITDA
|
78.03~79.95
|
75.49
|
2.54~4.46
|
3.4%~5.9%
|
EBITDA
Margin
|
35.4%~35.9%
|
35.0%
|
0.3%~0.8%
|
|
Acquisition of
Material Assets
|
33.69
|
29.05
|
4.64
|
16.0%
|
Acquisition of Property,
Plant and Equipment
|
28.99
|
28.55
|
0.44
|
1.5%
|
Others
|
4.70
|
0.50
|
4.20
|
850.5%
|
Disposal of Material
Assets
|
3.10
|
0.13
|
2.97
|
2363.0%
|
Financial Statements
Financial statements and additional operational data can be
found on the Company's website at http://www.cht.com.tw/ir
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. In recent years, Chunghwa
has been actively involved in corporate social responsibility and
has won domestic and international awards and recognition. For more
information, please visit our website at www.cht.com.tw
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SOURCE Chunghwa Telecom Co., Ltd.