Click here to close now.




















Welcome!

News Feed Item

Chunghwa Telecom Reports Un-audited Consolidated Operating Results for the Fourth Quarter of 2013

TAIPEI, Jan. 29, 2014 /PRNewswire/ -- Chunghwa Telecom Co., Ltd. (TAIEX: 2412, NYSE: CHT) ("Chunghwa" or "the Company") today reported its un-audited operating results for the fourth quarter of 2013. 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.)

Fourth Quarter 2013 Financial Highlights

  • Total revenue increased by 4.6% to NT$58.82 billion
  • Mobile communications revenue increased by 10.5% to NT$28.29 billion
    • Mobile value-added services (VAS) revenue increased by 39.4% to NT$7.71 billion, with mobile internet revenue, the largest contributor to VAS revenue, increasing by 56.2%
    • Handset sales revenue increased by 21.9% to NT$8.70 billion
  • Internet revenue slightly decreased by 0.3% to NT$6.51 billion
    • Internet VAS revenue increased by 3.3% to NT$0.66 billion
  • Domestic fixed communications revenue increased by 0.3% to NT$19.34 billion
  • International fixed communications revenue decreased by 1.2% to NT$3.90 billion
  • Total operating costs and expenses increased by 6.1% to NT$47.82 billion
  • Net income increased by 3.4% to NT$9.36 billion
  • Basic earnings per share (EPS) was NT$1.21

Full Year 2013 Financial Highlights

  • Total revenue increased by 3.0% to NT$228.00 billion, exceeding our prior guidance by 4.7%   
  • Mobile communications revenue increased by 9.7% to NT$110.59 billion
    • Mobile VAS revenue increased by 38.4% to NT$28.38 billion
    • Handset sales revenue increased by 19.7% to NT$33.10 billion
  • Internet revenue increased by 2.7% to NT$25.44 billion
    • Internet VAS revenue increased by 4.4% to NT$2.69 billion
  • Domestic fixed communications revenue decreased by 3.4% to NT$73.55 billion
  • International fixed communications revenue increased by 2.5% to NT$15.71 billion
  • Total operating costs and expenses increased by 5.3% to NT$180.49 billion
  • Net income decreased by 2.3% to NT$39.84 billion, but exceeded our full year guidance by 6.0%
  • Basic EPS was NT$5.14

"2013 was an important year for Chunghwa Telecom. In the past twelve months, not only did we outperform our competitors in growing our mobile business and upgrade many customers to higher speed services, but we also secured licenses to operate the desirable 4G bands in the domestic market," stated Dr. Rick L. Tsai, Chairman and CEO of Chunghwa Telecom.

Dr. Tsai continued, "Heading into 2014, our key focus is on the seamless rollout of 4G services in the second half of the year, with the aim to be not only the first 4G operator in Taiwan, but also the best 4G operator in terms of service and network quality. Even in the increasingly competitive broadband market, we will continue to attract users and drive stickiness through offering attractive promotional plans, which allow customers free upload speed migration. Lastly, we plan to launch ground-breaking 300Mbps speed services helping us to solidify our technological superiority and maintain our market leading position."

Revenue

Chunghwa Telecom's total revenues for the fourth quarter of 2013 increased by 4.6% to NT$58.82 billion, which was comprised of 48.1% mobile, 11.1% internet, 32.9% domestic fixed, 6.6% international fixed, and 1.3% from other businesses.

Mobile business revenue for the fourth quarter 2013 increased by 10.5% to NT$28.29 billion. The increase was primarily due to growth in mobile VAS revenue and handset sales from smartphone promotions, including Senao's open channel sales. This increase offset a decline in mobile voice revenue, which was due to market competition and the National Communication Committee's ("NCC") tariff reductions.

Internet business revenue for the fourth quarter of 2013 decreased by 0.3% to NT$6.51 billion. The decrease was primarily attributable to higher ICT project revenue in the same period of 2012.

Domestic fixed revenue for the fourth quarter of 2013 increased by 0.3% to NT$19.34 billion. Local and DLD service revenue decreased by 6.1% and 4.8%, respectively, mainly due to mobile and VoIP substitution. Broadband access revenue remained flat at NT$4.83 billion.

International fixed revenue decreased by 1.2% to NT$3.90 billion, mainly due to lower international long distance revenue because of VOIP substitution.

Other revenue decreased by 11.8%, primarily due to reduced construction revenue from the property development subsidiary, Light Era.

Total revenue for the full year 2013 increased by 3.0% to NT$228.00 billion, compared to 2012, and was comprised of 48.5% mobile, 11.2% Internet, 32.3% domestic fixed, 6.9% international fixed, and 1.1% other.

Operating Costs and Expenses

Total operating costs and expenses for the fourth quarter of 2013 increased 6.1% to NT$47.82 billion. The increase was mainly due to the rising cost of handsets sold resulting from growth in mobile internet subscribers and handset sales, increases in personnel expenses for Senao's channel expansion and higher ICT project costs during the quarter.

Total operating costs and expenses for 2013 increased by 5.3% year-over-year to NT$180.49 billion, mainly due to the aforementioned reasons occurring during the fourth quarter of 2013.

Income Tax

Income tax expense for the fourth quarter of 2013 increased by 4.1% to NT$1.89 billion.

Operating Income and Net Income

Income from operations for the fourth quarter increased by 2.2% to NT$11.10 billion. The operating margin was 18.9%, compared to 19.3% in the same period of 2012. Net income increased by 3.4% to NT$9.36 billion. Basic earnings per share was NT$1.21.

Cash Flow and EBITDA

Cash flow from operating activities for the fourth quarter of 2013 increased by 22.3% to NT$30.04 billion, mainly due to the land acquisition by the Company's property development subsidiary in 2012 and reduced mobile handset procurement during the quarter.

EBITDA for the fourth quarter of 2013 increased by 0.4% to NT$19.27 billion. The EBITDA margin was 32.8% compared to 34.1% in the same period of 2012. The decrease in EBITDA margin was primarily due to tariff cuts and higher handset sales, which have a lower EBITDA margin than traditional telecom services.

Capital Expenditure ("Capex")

Total capex for the fourth quarter of 2013 decreased by 22.2% to NT$13.11 billion, and was comprised of 54.5% domestic fixed communications, 25.7% mobile, 14.1% internet, 3.6% international fixed communications, and 2.1% others.

Business and Operational Highlights

Broadband/HiNet

  • This year, the Company is continuing to execute its strategy of encouraging FTTx migration. By December 31st, 2013, the number of FTTx subscribers reached 2.96 million, accounting for 64.9% of the Company's total broadband users. Moreover, the number of subscribers signing up for 60Mbps and higher speed connections increased by 25.5%, reaching 1.14 million.   
  • HiNet broadband subscribers increased 0.3% year-over-year, totaling 3.78 million at the end of December 2013.

Mobile

  • As of December 31st, 2013, Chunghwa had 10.66 million mobile subscribers, representing a 3.8% year-over-year increase.
  • In 2013, the Company increased the number of mobile internet subscribers by 58.8% year-over-year, adding over 1.46 million to reach 3.94 million and grow its market share to 34.8%.

Fixed-line

  • As of December 31st, 2013, the Company maintained its leading position in the fixed-line market, with a total of 11.57 million subscribers.

2014 Guidance

Total revenue in 2014 is expected to slightly increase by NT$0.23 billion, or 0.1%, to NT$228.23 billion compared to the unaudited consolidated revenue for 2013. Expected increases in revenue due to on-going promotions for mobile internet and growth in handset sales as well as ICT projects will likely be offset by expected the voice revenue decline and tariff reductions. Broadband revenue is expected to be flat year-over-year due to market competition.

Operating costs and expenses for 2014 are expected to increase by NT$4.21 billion to NT$184.70 billion. Costs of handset sold are expected to increase along with the promotion of mobile internet packages and customers' migration to 3G. Increase in CAPEX for the Company's fixed and mobile broadband businesses is expected to result in higher depreciation and maintenance expenses. The 4G license acquisition will also increase amortization expenses.

Non-operating income is expected to decrease by NT$0.88 billion due to declines in both interest income and gains on disposal of financial assets. Income before income tax and comprehensive income attributable to stockholders of the parent are expected to be NT$44.20 billion and NT$35.84 billion, respectively, representing decreases of NT$4.94 billion and NT$2.86 billion, respectively. Earnings per share is expected to decrease to NT$4.62.

Not counting for the 4G license payment of NT$39.08 billion, CAPEX for 2014 is budgeted to increase by NT$3.72 billion year-over-year to NT$40.13 billion, primarily due to costs associated with the build-out of the 4G network, fiber broadband, mobile network, and cloud infrastructure.

(NT$ billion except EPS)

2014(F)

2013

change

YoY

(unaudited)

(%)

Revenue

228.23

228.00

0.23

0.1

Operating Costs and Expenses

184.70

180.49

4.21

2.4

Other Income and Expense

0

0.8

(0.8)

(100)

Income from Operations

43.53

47.59

(4.06)

(8.5)

Non-operating Income

0.67

1.55

(0.88)

(56.8)

Income before Income Tax

44.20

49.14

(4.94)

(10.1)

Comprehensive Income attributable to stockholders of the parent

35.84

38.70

(2.86)

(7.4)

EPS(NT$)

4.62

5.14

(0.52)

(10.1)

EBITDA

77.10

79.78

(2.68)

(3.4)

EBITDA Margin

33.8%

35.0%



Acquisition of Material Assets

40.86

75.64

(34.78)

(46.0)

Acquisition of Property, Plant and Equipment

40.13

36.41

3.72

10.2

Concession

0

39.08

(39.08)

(100)

Others

0.73

0.15

0.58

386.7

Disposal of Material Assets

0

0.04

(0.04)

(100)

Financial Statements

Financial statements and additional operational data can be found on the Company's website at http://www.cht.com.tw/en/ir/stockit-earningsit.html.

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 principles.

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) 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: [email protected]

SOURCE Chunghwa Telecom Co., Ltd.

More Stories By PR Newswire

Copyright © 2007 PR Newswire. All rights reserved. Republication or redistribution of PRNewswire content is expressly prohibited without the prior written consent of PRNewswire. PRNewswire shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon.

Latest Stories
"We've just seen a huge influx of new partners coming into our ecosystem, and partners building unique offerings on top of our API set," explained Seth Bostock, Chief Executive Officer at IndependenceIT, in this SYS-CON.tv interview at 16th Cloud Expo, held June 9-11, 2015, at the Javits Center in New York City.
Mobile, social, Big Data, and cloud have fundamentally changed the way we live. “Anytime, anywhere” access to data and information is no longer a luxury; it’s a requirement, in both our personal and professional lives. For IT organizations, this means pressure has never been greater to deliver meaningful services to the business and customers.
Digital Transformation is the ultimate goal of cloud computing and related initiatives. The phrase is certainly not a precise one, and as subject to hand-waving and distortion as any high-falutin' terminology in the world of information technology. Yet it is an excellent choice of words to describe what enterprise IT—and by extension, organizations in general—should be working to achieve. Digital Transformation means: handling all the data types being found and created in the organizat...
SYS-CON Events announced today that HPM Networks will exhibit at the 17th International Cloud Expo®, which will take place on November 3–5, 2015, at the Santa Clara Convention Center in Santa Clara, CA. For 20 years, HPM Networks has been integrating technology solutions that solve complex business challenges. HPM Networks has designed solutions for both SMB and enterprise customers throughout the San Francisco Bay Area.
Chuck Piluso presented a study of cloud adoption trends and the power and flexibility of IBM Power and Pureflex cloud solutions. Prior to Secure Infrastructure and Services, Mr. Piluso founded North American Telecommunication Corporation, a facilities-based Competitive Local Exchange Carrier licensed by the Public Service Commission in 10 states, serving as the company's chairman and president from 1997 to 2000. Between 1990 and 1997, Mr. Piluso served as chairman & founder of International Te...
The Software Defined Data Center (SDDC), which enables organizations to seamlessly run in a hybrid cloud model (public + private cloud), is here to stay. IDC estimates that the software-defined networking market will be valued at $3.7 billion by 2016. Security is a key component and benefit of the SDDC, and offers an opportunity to build security 'from the ground up' and weave it into the environment from day one. In his session at 16th Cloud Expo, Reuven Harrison, CTO and Co-Founder of Tufin,...
Container technology is sending shock waves through the world of cloud computing. Heralded as the 'next big thing,' containers provide software owners a consistent way to package their software and dependencies while infrastructure operators benefit from a standard way to deploy and run them. Containers present new challenges for tracking usage due to their dynamic nature. They can also be deployed to bare metal, virtual machines and various cloud platforms. How do software owners track the usag...
SYS-CON Events announced today that MobiDev, a software development company, will exhibit at the 17th International Cloud Expo®, which will take place November 3–5, 2015, at the Santa Clara Convention Center in Santa Clara, CA. MobiDev is a software development company with representative offices in Atlanta (US), Sheffield (UK) and Würzburg (Germany); and development centers in Ukraine. Since 2009 it has grown from a small group of passionate engineers and business managers to a full-scale mobi...
With SaaS use rampant across organizations, how can IT departments track company data and maintain security? More and more departments are commissioning their own solutions and bypassing IT. A cloud environment is amorphous and powerful, allowing you to set up solutions for all of your user needs: document sharing and collaboration, mobile access, e-mail, even industry-specific applications. In his session at 16th Cloud Expo, Shawn Mills, President and a founder of Green House Data, discussed h...
For IoT to grow as quickly as analyst firms’ project, a lot is going to fall on developers to quickly bring applications to market. But the lack of a standard development platform threatens to slow growth and make application development more time consuming and costly, much like we’ve seen in the mobile space. In his session at @ThingsExpo, Mike Weiner, Product Manager of the Omega DevCloud with KORE Telematics Inc., discussed the evolving requirements for developers as IoT matures and conducte...
There are many considerations when moving applications from on-premise to cloud. It is critical to understand the benefits and also challenges of this migration. A successful migration will result in lower Total Cost of Ownership, yet offer the same or higher level of robustness. In his session at 15th Cloud Expo, Michael Meiner, an Engineering Director at Oracle, Corporation, analyzed a range of cloud offerings (IaaS, PaaS, SaaS) and discussed the benefits/challenges of migrating to each offe...
One of the hottest areas in cloud right now is DRaaS and related offerings. In his session at 16th Cloud Expo, Dale Levesque, Disaster Recovery Product Manager with Windstream's Cloud and Data Center Marketing team, will discuss the benefits of the cloud model, which far outweigh the traditional approach, and how enterprises need to ensure that their needs are properly being met.
In their session at 17th Cloud Expo, Hal Schwartz, CEO of Secure Infrastructure & Services (SIAS), and Chuck Paolillo, CTO of Secure Infrastructure & Services (SIAS), provide a study of cloud adoption trends and the power and flexibility of IBM Power and Pureflex cloud solutions. In his role as CEO of Secure Infrastructure & Services (SIAS), Hal Schwartz provides leadership and direction for the company.
In a recent research, analyst firm IDC found that the average cost of a critical application failure is $500,000 to $1 million per hour and the average total cost of unplanned application downtime is $1.25 billion to $2.5 billion per year for Fortune 1000 companies. In addition to the findings on the cost of the downtime, the research also highlighted best practices for development, testing, application support, infrastructure, and operations teams.
The Internet of Everything (IoE) brings together people, process, data and things to make networked connections more relevant and valuable than ever before – transforming information into knowledge and knowledge into wisdom. IoE creates new capabilities, richer experiences, and unprecedented opportunities to improve business and government operations, decision making and mission support capabilities.