TAIPEI, Taiwan, July 31, 2019 /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 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.)
Second Quarter 2019 Financial Highlights
- Total revenue decreased by 6.6% to NT$
50.11billion.
- Mobile communications revenue decreased by 11% to NT$ 22.90 billion.
- Internet revenue increased by 1.6% to NT$ 7.26 billion.
- Domestic fixed communications revenue decreased by 2.9% to
NT$ 15.92 billion.
- International fixed communications revenue decreased by 4.4% to
NT$ 3.11 billion.
- Total operating costs and expenses decreased by 4.3% to
NT$ 39.8 billion.
- Net income attributable to stockholders of the parent decreased
by 13.1% to NT$ 8.57 billion.
- Basic earnings per share (EPS) was NT$1.10.
Mr. Chi-Mau Shieh, Chairman and
CEO of Chunghwa Telecom, stated, "Even though the market remained
competitive during the second quarter of 2019, we were able to
maintain our leading position in terms of mobile revenue and
subscriber number in Taiwan. To
offset the down-sell triggered by the 499 plan last year, we
continued to migrate our subscribers to higher value plans, and we
saw continuous increase of iPhone users. In our broadband business,
we experienced a slight subscriber loss in the first half of this
year due to cable competition. However, we also noticed that our
subscribers continued to migrate to higher-speed fiber services.
Going forward, we will remain focused on providing multi-service,
home-centric digital plans to attract more subscribers."
"This was another robust quarter for our MOD/IPTV business. We
continued to be the largest video platform in Taiwan, reaching 2.08 million subscribers. We
also introduced a flexible package plan, which allows our customers
to make their own packages fully based on their preferences, and
expect to help us further increase our subscriber base, enhance
current customer stickiness, and differentiate ourselves from our
competitors. To seek more opportunities and to maximize revenue in
our ICT business, we will focus on selected verticals. We have
acquired several Fintech projects in the financial industry to
leverage our advantages in the IDC and information security
business, and we aim to develop our AI- and IoT-related
capabilities to enhance overall ICT performance. We are confident
in the strength of our business and our ability to further fuel our
sustainable development for our shareholders in the years to come,"
Mr. Shieh concluded.
Revenue
Chunghwa Telecom's total revenues for the
second quarter of 2019 decreased by 6.6% to NT$ 50.11 billion.
Mobile communications revenue for the second quarter of 2019
decreased by 11.0 % to NT$ 22.90
billion. This was mainly due to the decrease in mobile
service revenue resulted from market competition and VoIP
substitution, offset by the increase in handset sales revenue.
Internet business revenue for the second quarter of 2019
increased by 1.6 % year over year to NT$
7.26 billion. The increase was primarily attributable to
higher application value-added service revenue.
Domestic fixed revenue for the second quarter of 2019 decreased
by 2.9 % year over year to NT$ 15.92
billion, mainly due to the decrease of local telephone
service revenue by 7.1% to NT$ 6.51
billion, primarily driven by the increased mobile and VoIP
substitution.
International fixed communications revenue decreased by 4.4 % to
NT$ 3.11 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 second quarter of 2019 decreased by 4.3 % year
over year to NT$ 39.80 billion,
mainly due to lower personnel and interconnection costs.
Operating Income and Net Income
Income from operations
for the second quarter of 2019 decreased by 14.5 % to NT$ 10.30 billion. The operating margin was
20.6%, as compared to 22.5% in the same period of 2018. Net income
attributable to stockholders of the parent decreased by 13.1% to
NT$ 8.57 billion. Basic earnings per
share was NT$1.10.
Cash Flow and EBITDA
Cash flow from operating
activities for the second quarter of 2019 decreased by 6.8% to
NT$ 15.96 billion.
Cash and cash equivalents, as of June
30th, 2019, decreased by 16.6 % to NT$ 36.58 billion as compared to that as of
June 30th, 2018.
EBITDA for the second quarter of 2019 decreased by 4.6 % to
NT$ 19.11 billion. EBITDA margin was
38.1%, as compared to 37.3% 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 June 30th, 2019, the number of FTTx
subscribers reached 3.63 million, accounting for 81.4% of the
Company's total broadband users. Moreover, the number of
subscribers signing up for speeds of 100Mbps or higher increased by
10.6% year over year, reaching 1.50 million.
HiNet broadband subscribers decreased by 1.2% year over year to
3.66 million as of June
30th, 2019.
Mobile
As of June
30th, 2019, Chunghwa Telecom had 10.60
million mobile subscribers, representing a 0.8% year-over-year
increase.
Fixed line
As of June
30th, 2019, the Company maintained its leading
position in the fixed-line market, with a total of 10.30 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.