TAIPEI,
Taiwan, April 29, 2019
/PRNewswire/ -- Chunghwa Telecom Co., Ltd. (TAIEX: 2412, NYSE: CHT)
("Chunghwa" or "the Company") today reported its un-audited
operating results for the first quarter of 2019. 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.)
First Quarter 2019 Financial Highlights
- Total revenue decreased by 4.3% to NT$51.33 billion.
- Mobile communications revenue decreased by 8.7% to NT$24.48 billion.
- Internet revenue increased by 6.2% to NT$ 7.42 billion.
- Domestic fixed communications revenue increased by 0.2% to
NT$15.79 billion.
- International fixed communications revenue decreased by 6.6% to
NT$2.77 billion.
- Total operating costs and expenses decreased by 4.0% to
NT$40.93 billion.
- Net income attributable to stockholders of the parent decreased
by 4.3% to NT$8.35 billion.
- Basic earnings per share (EPS) was NT$1.08.
Mr. Chi-Mau Shieh, Chairman and
CEO of Chunghwa Telecom, stated, "During the first quarter of 2019,
our operating income, net income and EPS met guidance thanks to
strengths in our emerging business and core business. In the mobile
sector, while other service providers rolled out low-price
unlimited mobile data plans, we were able to maintain both stable
pricing as well as market share in terms of mobile revenue and
subscriber base. We continued to migrate our customers to higher
price plans, and we saw the continuation of subscribers migrating
to higher-speed fiber services in our broadband business as well.
We launched our smart speakers last week, which enables our
customers to enjoy smart home and other AI related services while
further increasing their stickiness to our network."
"This was another robust quarter for our MOD business. We
continued to be the largest video platform in Taiwan with more than 2 million subscribers.
In January, our regulator approved us to freely package MOD
channels in order to meet customer demand, which we believe
benefits our business in the long term. Our ICT services revenue
also grew, and we are fully prepared and optimistic for the
upcoming 5G service launch. Above all, we remain committed to
leveraging our core strengths and market advantages to maximize
value to our shareholders in the face of potential changes to the
competitive landscape. To take our business to the next level and
to return to a growth trajectory, we rolled out a customer-centric
value creation transformation plan this year to strengthen our core
businesses, deploy emerging services, optimize our cost structure,
and further enhance our fundamentals, which include a next
generation network, IT infrastructure, and human resource planning.
We believe strongly in our business, our strategy, and ability to
execute." Mr. Shieh concluded.
Revenue
Chunghwa Telecom's total revenues for the first quarter of 2019
decreased by 4.3% to NT$51.33
billion.
Mobile communications revenue for the first quarter of 2019
decreased by 8.7% to NT$24.48
billion. This was mainly due to the decrease in mobile
service revenue resulted from market competition and VoIP
substitution. Handset sales revenue also decreased due to the
lengthier handset replacement cycle.
Internet business revenue for the first quarter of 2019
increased by 6.2% year over year to NT$7.42
billion. The increase was primarily attributable to higher
application value-added service revenue.
Domestic fixed revenue for the first quarter of 2019 increased
by 0.2% year over year to NT$15.79
billion, mainly due to the increase of ICT project revenue,
offset by the decrease of local telephone service revenue. ICT
project revenue increased by 32.7% to NT$2.32 billion due to the increase of the number
of projects completed and accepted, while local telephone service
revenue decreased by 6.9% to NT$6.46
billion, primarily driven by the increased mobile and VoIP
substitution.
International fixed communications revenue decreased by 6.6% to
NT$2.77 billion, mainly due to lower
international long distance communications revenue as a result
of increased market competition.
Operating Costs and Expenses
Total operating costs and expenses for the first quarter of 2019
decreased by 4.0% year over year to NT$40.93
billion, mainly due to lower cost of goods sold.
Operating Income and Net Income
Income from operations for the first quarter of 2019 decreased
by 5.0% to NT$10.40 billion. The
operating margin was 20.3%, as compared to 20.4% in the same period
of 2018. Net income attributable to stockholders of the parent
decreased by 4.3% to NT$8.35 billion.
Basic earnings per share was NT$1.08.
Cash Flow and EBITDA
Cash flow from operating activities for the first quarter of
2019 increased by 80.6% to NT$13.23
billion.
Cash and cash equivalents, as of March
31st, 2019, increased by 19.1% to NT$37.55 billion as compared to that as of
March 31st, 2018.
EBITDA for the first quarter of 2019 increased by 1.3% to
NT$19.16 billion. EBITDA margin was
37.3%, as compared to 35.3% in the same period of 2018.
Business and Operational Highlights
Broadband/HiNet
The Company continued to execute its strategy of encouraging
FTTx migration. As of March
31st, 2019, the number of FTTx subscribers
reached 3.62 million, accounting for 80.9% of the Company's total
broadband users. Moreover, the number of subscribers signing up for
speeds of 100Mbps or higher increased by 10.5% year over year,
reaching 1.46 million.
HiNet broadband subscribers decreased by 1.4% year over year to
3.67 million as of March
31st, 2019.
Mobile
As of March 31st,
2019, Chunghwa Telecom had 10.59 million mobile subscribers,
representing a 1.8% year-over-year increase.
Fixed line
As of March 31st, 2019,
the Company maintained its leading position in the fixed-line
market, with a total of 10.36 million subscribers.
Financial Statements
Financial statements and additional operational data can be
found on the Company's website at
https://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. 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.