TAIPEI, July 30, 2020 /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 2020. 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 2020 Financial Highlights
- Total revenue decreased by 4.6% to NT$
47.81 billion.
- Mobile communications revenue decreased by 7.8% to NT$ 21.10 billion.
- Internet revenue increased by 1.0% to NT$ 7.43 billion.
- Domestic fixed communications revenue decreased by 1.2% to
NT$ 15.69 billion.
- International fixed communications revenue decreased by 28.6%
to NT$ 2.18 billion.
- Total operating costs and expenses decreased by 6.6% to
NT$ 37.19 billion.
- Net income attributable to stockholders of the parent remain
flat at NT$ 8.57 billion.
- Basic earnings per share (EPS) was NT$1.10.
Mr. Chi-Mau Shieh, Chairman and
CEO of Chunghwa Telecom, stated, "With the disruptions from the
COVID-19 pandemic persisting, the health and safety of our
employees and their families, as well as our customers and business
partners, have been and will continue to be our top priority."
"Despite the circumstances, we continued to develop our
business, and we are pleased that we were able to launch our 5G
service on June 30, 2020. We believe
this new service will drive our business to a new level and will
allow us to provide more value-added services to both individual
customers and enterprise customers. We are optimistic about 5G's
future growth and aim to acquire more than one million subscribers
over the next year. Furthermore, during the quarter, our core
businesses continued to generate solid results. In our fixed
broadband business, for example, the number of subscriptions for
300 Mbps services increased 81.4% year over year, and Home Wi-Fi
subscriptions increased 120% year over year. In addition, our MOD
business remained a market leader with the largest subscriber base
in Taiwan."
"While we continue to closely monitor market conditions, we
believe we are well positioned to navigate through the pandemic and
macro headwinds. With our strong balance sheet and leading market
position in Taiwan, we are fully
confident in our ability to deliver sustainable value for our
shareholders," Mr. Shieh concluded.
Revenue
Chunghwa Telecom's total revenues for the second quarter of 2020
decreased by 4.6% to NT$ 47.81
billion.
Mobile communications revenue for the second quarter of 2020
decreased by 7.8% to NT$ 21.10
billion. This was mainly due to the decrease in handset
sales revenue and the decrease in mobile service revenue resulted
from market competition, VoIP substitution, as well as the impact
of COVID-19 on roaming revenue.
Internet business revenue for the second quarter of 2020
increased by 1.0% to NT$ 7.43
billion.
Domestic fixed revenue for the second quarter of 2020 decreased
by 1.2% year over year to NT$ 15.69
billion, mainly due to the decrease of local and DLD service
revenue primarily driven by the increased mobile and VoIP
substitution.
International fixed communications revenue decreased by 28.6% to
NT$ 2.18 billion.
Operating Costs and Expenses
Total operating costs and expenses for the second quarter of
2020 decreased by 6.6% year over year to NT$
37.19 billion, mainly due to lower interconnection costs and
cost of goods sold.
Operating Income and Net Income
Income from operations for the second quarter of 2020 increased
by 3.0% to NT$ 10.61 billion. The
operating margin was 22.2%, as compared to 20.6% in the same period
of 2019. Net income attributable to stockholders of the parent
remained flat at NT$ 8.57 billion.
Basic earnings per share was NT$1.10.
Cash Flow and EBITDA
Cash flow from operating activities for the second quarter of
2020 decreased by 17.5% year over year to NT$ 13.17 billion, mainly due to the increase in
accounts receivable.
Cash and cash equivalents, as of June
30th, 2020, decreased by 47.6% to NT$ 19.17 billion as compared to that as of
June 30th, 2019. The
decrease was mainly attributable to the payment of concession fees
for the 5G frequency spectrum auction, which was partially offset
by the increase in short-term bills payable.
EBITDA for the second quarter of 2020 increased by 1.4% to
NT$ 19.37 billion. EBITDA margin was
40.52%, as compared to 38.13% in the same period of 2019.
Business and Operational Highlights
Broadband/HiNet
The Company continued to execute its strategy of encouraging
FTTx migration. As of June
30th, 2020, the number of FTTx subscribers
reached 3.62 million, accounting for 82.8% of the Company's total
broadband users. Moreover, the number of subscribers signing up for
speeds of 100Mbps or higher increased by 11.5% year over year,
reaching 1.67 million.
HiNet broadband subscribers decreased by 1.6% year over year to
3.60 million as of June
30th, 2020.
Mobile
As of June 30th,
2020, Chunghwa Telecom had 11.09 million mobile subscribers,
representing a 4.6% year-over-year increase.
Fixed line
As of June 30th, 2020,
the Company maintained its leading position in the fixed-line
market, with a total of 10.03 million subscribers.
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. 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.