TAIPEI, Taiwan, April 30, 2012 /PRNewswire-Asia-FirstCall/ --
Chunghwa Telecom Co., Ltd. (TAIEX: 2412, NYSE: CHT) ("Chunghwa" or
"the Company") today reported its operating results for the first
quarter of 2012. All figures were prepared in accordance with
generally accepted accounting principles of the Republic of China ("ROC GAAP") on a
consolidated basis.
(Comparisons, unless otherwise stated, are to the prior year
period)
First Quarter 2012 Financial Highlights
- Total consolidated revenue increased by 5.6% to NT$55.4 billion
- Mobile communications revenue increased by 12.0% to
NT$25.6 billion; mobile value-added
services (VAS) revenue increased by 29.2% to NT$4.6 billion
- Internet revenue increased by 1.7% to NT$6.2 billion; internet VAS revenue increased by
1.6% to NT$0.6 billion
- Domestic fixed communications revenue decreased by 1.1% to
NT$19.0 billion
- International fixed communications revenue decreased by 4.0% to
NT$3.6 billion
- Total operating costs and expenses increased by 14.4% to
NT$44.1 billion
- Net income totaled NT$9.5
billion, representing a 19.8% decrease
- Basic earnings per share (EPS) decreased by 18.7% to
NT$1.22
Dr. Shyue-Ching Lu, Chairman and
Chief Executive Officer, said, "We began 2012 with a solid market
leadership for all of our major business segments. For the
first quarter, our growth was driven primarily by mobile business
such as value-added services, increase of mobile internet
subscribers, and innovative mobile service marketing. In
addition, our MOD/IPTV is also gaining traction due to both
increased ARPU and market share. We have executed well
against the interim set-backs from the various business and
regulatory environment. We will continue to poise Chunghwa
Telecom for growth and share gains as markets stabilize. Our
strong market leadership, quality product portfolio, strong cash
generation and healthy balance sheet give us the confidence in
delivering a resilient overall performance."
Chunghwa's total consolidated revenue for the first quarter of
2012 increased by 5.6% year-over-year to NT$55.4 billion, of which 34.3% was from the
domestic fixed business, 46.2% was from the mobile business, 11.2%
was from the internet business, 6.6% was from the international
fixed business, and the remainder was from others. The revenue
growth was primarily due to the increase in mobile VAS revenue and
handset sales. However, this increase was offset by the decline in
mobile voice revenue. Additionally, the decline in Domestic Long
Distance ("DLD") and broadband revenue from the tariff cuts also
partially offset the overall growth.
Domestic fixed revenue totaled NT$19.0
billion, representing a decrease of 1.1% year-over-year. Of
which, local revenues increased by 1.9% year-over-year, mainly due
to the shift of pricing right for fixed to mobile calls. The 32.2%
decline in DLD revenues was due to the mandatory tariff cut
starting 2012. However, the tariff cut stimulated the overall
traffic growth, resulting in less revenue impact than previously
anticipated.
Broadband access revenue, including ADSL and Fiber to the x
("FTTx"), decreased by 9.2% year-over-year to NT$4.7 billion, primarily due to the Company's
voluntary broadband tariff reductions, as well as the mandated the
National Communication Committee ("NCC") tariff reduction.
Total revenue for the mobile business amounted to NT$25.6 billion for the first quarter 2012,
representing a year-on-year increase of 12.0%, mainly due to the
29.2% growth in mobile VAS revenue and 53.7% increase in handset
sales from smartphone promotions, which offset the decline in
mobile voice revenue. The decline in mobile voice revenue resulted
primarily from the fixed to mobile calls pricing right shift, the
marketing campaign and the NCC mandated tariff reduction.
Chunghwa's internet business revenue grew to NT$6.2 billion in the first quarter of 2012,
representing an increase of 1.7% year-over-year, due to the higher
revenue for ICT business and internet VAS, offsetting the HiNet
revenue decline from the tariff cut along with broadband access
services.
International fixed line revenue decreased by 4.0% to
NT$3.6 billion, primarily due to the
decrease in international long distance service revenue as a result
of market competition.
Other revenue increased by 81.6%, primarily due to construction
revenue from the property development subsidiary, Light Era.
Costs and Expenses
Total operating costs and expenses for the first quarter of 2012
amounted to NT$44.1 billion, an
increase of 14.4% compared to the same period of 2011. This
increase was mainly consists of 69.8% from cost of handset sold,
14.6% from corporate solution and ICT project costs and 6.1% from
maintenance and material expenses for broadband service
promotion.
Income Tax
Income tax expense for the first quarter of 2012 was
NT$2.0 billion, representing a 15.7%
decrease compared to NT$2.3 billion
for the same period of 2011. This decrease was due to lower
income from operations.
EBITDA and Net Income
EBITDA for the first quarter of 2012 decreased by 11.8% to
NT$19.4 billion, while income from
operations decreased by 18.7% to NT$11.3
billion. The decreases in both EBITDA and income from
operations reflected higher operating costs and expenses.
The EBITDA margin for the first quarter of 2012 was 35.0%
compared to 41.9% in the same period of 2011, and the operating
margin was 20.4%, compared to 26.6% in the previous year. As
a result, net income decreased by 19.8% year-over-year to
NT$9.5 billion, and EPS decreased by
18.7% year-over-year to NT$1.22.
Capital Expenditure ("Capex")
Total capex for the first quarter of 2012 amounted to
NT$6.7 billion, representing a 52.9%
year-over-year increase. Of the NT$6.7
billion capex figure, 49.8% was used for the domestic fixed
communications business, 29.7% was for the mobile business, 11.9%
was for the internet business, 7.2% was for the international fixed
communications business, and the remainder was for other uses.
Cash Flow
Cash flow from operating activities for the first quarter of
2012 increased by 34.9% year-over-year to NT$13.1 billion. The increase was mainly
because starting 2011, the company adjusted its billing period for
monthly fees one month later to be in line with that for
communication charges, hence account receivable for the first
quarter 2011 increased accordingly.
Business and Operational Highlights
Broadband/HiNet
- As of the end of the first quarter 2012, FTTx subscribers had
reached 2.5 million, accounting for 55.8% of total broadband users.
This year, the Company is continuing its execution on FTTx
migration as well as to increase the total broadband subscriber
base. Although the tariff reductions reduced the revenue, we will
continue migrate customers to higher speed services and provide
high definition programs, such as broadcasting of the coming
Olympic Games, to accelerate the revenue recovery.
- HiNet broadband subscribers totaled 3.7 million at the end of
March 2012, a year-over-year rise of
3.2%.
Mobile
- As of the end of March 2012,
Chunghwa had 10.1 million mobile subscribers, an increase of 3.1%
compared to 9.8 million a year ago.
- As of the end of March 2012,
Chunghwa had 1.8 million mobile internet subscribers compared to
1.5 million subscribers as of the end of 2011, demonstrating the
strong growth momentum that the Company has achieved. As a result,
Chunghwa enhanced its target number for mobile internet subscriber
to 2.35 million by the end of 2012.
- Mobile VAS revenue for the first quarter 2012 rose 29.2%
year-over-year to NT$4.6 billion,
with mobile internet revenue increasing 58.7% year-over-year,
representing the largest contributor to VAS revenue.
Domestic/International Fixed-line
- As of the end of March 2012, the
Company maintained its leading fixed-line market position, with
fixed-line subscribers totaling 12.0 million.
- Until now, Chunghwa's Multimedia-on-demand (MOD) subscriber
number had reached 1.1 million, and is still increasing, indicating
that the enriched content is satisfying customer demands. MOD
ARPU also increased significantly to NT$145 in the first quarter, representing a
growth of 15.7% compared to the same period of 2011.
Financial Statements
Financial statements and additional operational data can be
found on the Company's website at
www.cht.com.tw/ir/filedownload.
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.
SPECIAL NOTE REGARDING NON-GAAP FINANCIAL MEASURES
A body of generally accepted accounting principles is commonly
referred to as "GAAP". A non-GAAP financial measure is generally
defined by the SEC as one that purports to measure historical or
future financial performance, financial position or cash flows but
excludes or includes amounts that would not be so adjusted in the
most comparable U.S. GAAP measure. We disclose in this report
certain non-GAAP financial measures, including EBITDA. EBITDA for
any period 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 expenses,
net, (iv) income tax, (v) cumulative effect of change in accounting
principle, net of tax and (vi) (income) loss from discontinued
operations.
In managing our business we rely on EBITDA as a means of
assessing our operating performance. We believe that EBITDA can be
useful to facilitate comparisons of operating performance between
periods and with other companies 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.
EBITDA is not a measure of financial performance under U.S.
GAAP or ROC GAAP. EBITDA should not be considered as an alternate
measure of net income or operating income, as determined on a
consolidated basis using amounts derived from statements of
operations prepared in accordance with U.S. GAAP or ROC GAAP, as an
indicator of operating performance or as cash flows from operating
activity or as a measure of liquidity. EBITDA has material
limitations that impair its value as a measure of a company's
overall profitability since it does not address certain ongoing
costs of our business that could significantly affect profitability
such as financial expenses and income taxes, depreciation, pension
plan reserves or capital expenditures and associated charges. These
non-GAAP measures are not in accordance with or an alternative for
GAAP financial data, the non-GAAP results should be reviewed
together with the GAAP results and are not intended to serve as a
substitute for results under GAAP, and may be different from
non-GAAP measures used by other companies.
About Chunghwa Telecom
Chunghwa Telecom (TAIEX 2412, NYSE: CHT) is Taiwan's leading telecom service provider. The
Company provides fixed-line, mobile and internet and data services
to residential and business customers in Taiwan.
Contact: Fu-fu Shen
Phone: +886-2-2344-5488
Email: chtir@cht.com.tw
SOURCE Chunghwa Telecom Co., Ltd.