Chunghwa Telecom Reports 2024 Guidance
- None.
- Operating costs and expenses are expected to increase by 4.0%~4.6%, leading to a decrease in income from operations by -2.4%~0.3%.
Insights
The guidance provided by Chunghwa Telecom indicates an expected revenue increase of 2.4% to 3.1% for 2024, driven by growth in core areas such as mobile communications, broadband access and data communications. This is a relatively modest growth rate, which suggests that the company is experiencing stable but not exponential growth within its sector. The projected increase in operating costs and expenses, however, is higher at 4.0% to 4.6%, primarily due to investments in talent and infrastructure. This indicates a strategic move to bolster future business prospects, particularly in emerging businesses and digital transformation initiatives.
From an investment perspective, the forecasted decrease in income from operations of up to 2.4% could be a point of concern, as it may reflect pressure on profit margins despite revenue growth. Nonetheless, the potential increase on the higher end of guidance shows management's confidence in cost control and operational efficiency. The expected capital expenditure on 5G and ESG-related improvements suggests a long-term strategy to remain competitive and adhere to sustainability trends, which could be favorable for investor sentiment.
Chunghwa Telecom's emphasis on enhancing its mobile market revenue and market share through network and service quality improvements is a critical strategic move in a highly competitive telecom industry. The company's investment in original video content and promotion of Taiwanese productions internationally could open new revenue streams and diversify its business model. This is particularly significant as content creation becomes a key differentiator in the telecom sector, merging traditional service provision with digital media.
Additionally, Chunghwa's focus on 5G smart applications and its positioning as an Asia-Pacific information hub aligns with global technological trends and the increasing demand for high-speed, reliable connectivity. Their commitment to digital and AI transformation, coupled with resilience and security enhancements, positions the company favorably in an industry where technological leadership is crucial for maintaining a competitive edge.
The planned increase in capital expenditure for the acquisition of property, plant and equipment, particularly for the deployment of 5G technology and ESG practices, reflects Chunghwa Telecom's alignment with global sustainability trends. The elimination of energy-intensive equipment and investment in internet data centers and submarine cables are indicative of a company proactively adapting to environmental concerns and the need for robust digital infrastructure. Such investments are likely to be well-received by stakeholders increasingly focused on corporate social responsibility.
Chunghwa Telecom's commitment to its core values and visions, including becoming an international benchmark enterprise based on sustainable development, suggests a strategic prioritization of long-term value creation over short-term gains. This approach may enhance the company's reputation and brand value, potentially leading to increased customer trust and loyalty, which are invaluable intangible assets in the current market landscape.
Looking ahead to 2024, Chunghwa Telecom will solidify its leading position in mobile market revenue and market share with outstanding network and service quality. By promoting fixed broadband speed upgrades, the Company aims to deliver the highest quality services, strengthen customer relationships, and enhance user experience to sustain its leading position. Furthermore, by increasing investment in original video content, the Company aims to enhance market share and customer contribution while promoting Taiwanese original productions to the global stage. At the same time, we will continue to implement sustainable transformation, drive digital transformation, embark on AI transformation, enhance resilience and security, and explore opportunities in 5G smart applications, to further advance the innovation and growth for information and communication technology business. In terms of international business, we will continue to strengthen our position as the
For 2024, the Company expects total revenue to increase by NT
Operating costs and expenses for 2024 are expected to increase by NT
Income from operations is expected to decrease by
Acquisition of Property, Plant and Equipment in 2024 is expected to increase by
In response to the global trends in ESG sustainable development, industrial transformation, and alignment with national macro policies, Mr. Shui-Yi Kuo, Chairman and CEO of Chunghwa Telecom, stated, "Looking ahead to the new year, Chunghwa Telecom will continue to uphold the four core values of 'integrity, customer trust, creation of value and innovation, and commitment to accountability.' Meanwhile, we will leverage the Company's four abundant assets: 'customers and partners, technology platforms, infrastructures, and talents,' to advance towards the Company's three major visions: 'becoming an international benchmark enterprise based on sustainable development, becoming a leading brand of digital ecosystem co-creators; and becoming a top-notch technology conglomerate with a market value surpassing a trillion.' Chunghwa Telecom is confident about the future development and looks forward to collaboratively creating a better future with all customers and partners."
(NT$ billion except EPS) | 2024(F) | 2023 (un-audited) | change | YoY(%) |
Revenue | 228.54~230.19 | 223.20 | 5.34~6.99 | |
Operating Costs and Expenses | 183.30~184.27 | 176.21 | 7.09~8.06 | |
Other Income and Expense | (0.01)~0.58 | (0.64) | 0.63~1.22 | ( |
Income from Operations | 45.23~46.50 | 46.35 | (1.12)~0.15 | ( |
Non-operating Income | 0.67~1.08 | 0.64 | 0.03~0.44 | |
Income before Income Tax | 45.90~47.58 | 46.99 | (1.09)~0.59 | ( |
Net Income Attributable to Stockholders of The Parent | 35.66~37.20 | 36.92 | (1.26)~0.28 | ( |
EPS(NT$) | 4.60~4.80 | 4.76 | (0.16)~0.04 | ( |
EBITDA | 85.67~86.95 | 86.01 | (0.34)~0.94 | ( |
EBITDA Margin | 38.5 % | ( | ||
Acquisition of Material Assets | 36.82 | 32.97 | 3.85 | 11.7 % |
Acquisition of Property, Plant and Equipment and Intangible Assets | 34.02 | 30.98 | 3.04 | 9.8 % |
Others | 2.80 | 1.99 | 0.81 | 40.5 % |
Disposal of Material Assets | - | 0.02 | (0.02) | (100 %) |
Note 1: "Other income and expenses" includes gains (losses) on disposal of property, plant and equipment (PP&E) and investment property, and impairment loss on PP&E and investment property.
Note 2: The calculation of growth rates is based on NT$ thousand.
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
This press release is not an offer of securities for sale in
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) certain financing costs, (iii) other expenses or income not related to the operation of the business, (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) other expenses or income not related to the operation of the business, (iv) income tax, (v) (income) loss from discontinued operations.
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
Contact: Angela Tsai
Phone: +886 2 2344 5488
Email: chtir@cht.com.tw
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SOURCE Chunghwa Telecom
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