Chunghwa Telecom Reports Un-Audited Consolidated Operating Results for the Fourth Quarter and Full Year of 2023
- Total revenue increased by 3.0% to NT$223.20 billion for the full year 2023
- Consumer Business Group revenue increased by 3.8% to NT$ 137.09 billion for the full year 2023
- International Business Group revenue increased by 27.8% to NT$ 9.19 billion for the full year 2023
- Chunghwa Telecom's 2023 financial results exceeded expectations, achieving six-year record highs in revenue and EPS
- The company remains optimistic about further expansion and growth
- Operating income decreased by 1.0% for the full year 2023
- EBITDA decreased by 0.3% for the full year 2023
- Net income attributable to stockholders of the parent decreased by 1.7% for the fourth quarter of 2023
Insights
The financial results of Chunghwa Telecom indicate a mixed performance with a notable increase in total revenue by 4.0% in Q4 and 3.0% for the full year 2023, which is a positive signal for investors. The growth in the Consumer, Enterprise and International Business Groups suggests a diversified strength across the company's portfolio. However, the decrease in operating income and EBITDA raises concerns about rising costs and potential margin compression. The reported EPS of NT$1.06 for Q4 and NT$4.76 for the full year, exceeding the company's full-year guidance, may be seen as an encouraging sign for shareholders, reflecting efficient cost management despite the increased expenses.
One critical aspect to highlight is the impact of one-time impairments related to the phase-out of 3G network on operating income and net income. Excluding these impairments, both metrics show an increase, indicating underlying operational strength. This adjustment is significant for investors who are assessing the company's performance without the influence of non-recurring items. Furthermore, the growth in 5G subscribers and mobile business revenue suggests that Chunghwa Telecom is successfully navigating the industry's transition to next-generation technology, which could have positive implications for future revenue streams.
The telecommunications industry is highly competitive and Chunghwa Telecom's report of holding more than 60% of the domestic market capitalization is a strong indicator of its market dominance. This is further solidified by the company's leading mobile revenue and subscriber share. The reported 49% increase in monthly fee for 5G migration this quarter suggests that the company is effectively monetizing its 5G investment, which is critical as the industry moves towards more advanced technologies.
The announcement of establishing a subsidiary in Germany reflects the company's strategic initiative for international expansion, particularly in Europe. This move is in line with the broader industry trend of telecom companies seeking growth through global expansion. The positive momentum in the International Business Group, with a 33.4% revenue increase in Q4 and 27.8% for the full year, demonstrates the potential for further international market penetration, which could be a significant growth driver for the company in the coming years.
Chunghwa Telecom's recognition by the Dow Jones Sustainability World Index and the 'AA' ratings from MSCI and S&P Global Ratings underscore the company's commitment to sustainability and corporate governance. These acknowledgments can enhance investor confidence and potentially attract socially responsible investment. The implementation of a 'Compensation Clawback Policy' is a proactive measure to align top management's interests with those of shareholders, which can be viewed positively from a corporate governance perspective.
It is important for stakeholders to consider the long-term implications of these recognitions and policies. Companies that lead in sustainability are often better positioned to manage risks and capitalize on opportunities arising from environmental and social trends. Chunghwa Telecom's focus on sustainability could provide a competitive advantage and contribute to long-term shareholder value.
(Comparisons throughout the press release, unless otherwise stated, are made with regard to the prior year period.)
Fourth Quarter 2023 Financial Highlights
- Total revenue increased by
- Consumer Business Group revenue increased by
- Enterprise Business Group revenue increased by
- International Business Group revenue increased by
- Total operating costs and expenses increased by
- Operating income decreased by
- EBITDA decreased by
- Net income attributable to stockholders of the parent decreased by
- Basic earnings per share (EPS) was
- Excluding one-time impairments, including impairment loss of investment property and telecom equipment caused by the phase-out of 3G network, operating income and net income attributable to stockholders increased by
Full Year 2023 Financial Highlights
- Total revenue increased by
- Consumer Business Group revenue increased by
- Enterprise Business Group revenue increased by
- International Business Group revenue increased by
- Total operating costs and expenses increased by
- Operating income decreased by
- EBITDA decreased by
- Net income attributable to stockholders of the parent increased by
- Basic earnings per share (EPS) was
- Total revenue, net income attributable to stockholders of the parent and EPS exceeded the high-end target of our full-year guidance.
"Chunghwa Telecom's 2023 financial results exceeded expectations, with FY2023 revenue and EPS hitting six-year record highs and achieving four consecutive years of annual growth," said Mr. Shui-Yi Kuo, Chairman and Chief Executive Officer of Chunghwa Telecom. "In the fourth quarter of 2023, we are happy to see that in the new 3-player landscape, Chunghwa Telecom continues to be the largest player in the industry, holding more than
"During the quarter, all three of our business groups reported year-over-year revenue growth, delivering solid results. For our Consumer Business Group, the growth momentum for all core businesses maintained upward trend. In particular, due to the popularity of our popular global package, our international roaming revenue in 2023 surged to exceed pre-COVID-19 levels," said Mr. Chau-Young, Lin, President of Chunghwa Telecom. "Our Enterprise Business Group revenue also increased YoY driven by ICT business and mobile business growth, as revenues from cybersecurity maintained YoY growth for 8 consecutive quarters thanks to climbing market demands. Meanwhile, our International Business Group revenue delivered notable
"In 2023, Chunghwa Telecom was recognized by the Dow Jones Sustainability World Index as No.1 of the world-class telecommunication sustainability leaders. In addition, we not only received 'AA' rating from MSCI, but we were also the only company in the global telecom industry awarded an 'AA' credit rating from S&P Global Ratings," said Mr. Kuo, "Furthermore, to strengthen corporate governance, we implemented a 'Compensation Clawback Policy' to further align the interests of top management and shareholders."
"Our history shows that our business is resilient across economic and market cycles, and our teams continue to deliver solid results. The significant momentum in all business offers us the opportunity to further expand. We remain very optimistic about our outlook to lead the industry in all aspects while creating value for our shareholders," Mr. Shui-Yi Kuo concluded.
Revenue
Chunghwa Telecom's total revenues for the fourth quarter of 2024 increased by
Consumer Business Group's total revenue increased by
Enterprise Business Group's revenue increased by
International Business Group's revenue and income before tax for the fourth quarter of 2023 both increased by
Total revenue for the full year of 2023 increased by
Operating Costs and Expenses
Total operating costs and expenses for the fourth quarter of 2023 increased by
Total operating costs and expenses for 2023 increased by
Operating Income and Net Income
Income from operations for the fourth quarter of 2023 decreased by
Income from operations for 2023 decreased by
Cash Flow and EBITDA
Cash flow from operating activities, as of December 31st, 2023, decreased by
Cash and cash equivalents, as of December 31st, 2023, decreased by
EBITDA for the fourth quarter of 2023 was
EBITDA for 2023 decreased by 0.3 % to
Business Highlights
Mobile
As of December 31st, 2023, Chunghwa Telecom had 13.14 million mobile subscribers, representing a
Fixed Broadband/HiNet
As of December 31st, 2023, the number of broadband subscribers slightly increased by
Fixed line
As of December 31st, 2023, the number of fixed-line subscribers was 9.15 million.
(in NT$ billion)
2023 | 2022 | YoY% | ||||
Oct.-Dec. | Jan.-Dec. | Oct.-Dec. | Jan.-Dec. | Oct.-Dec. | Jan.-Dec. | |
Revenue | 61.86 | 223.20 | 59.50 | 216.74 | 4.0 | 3.0 |
Operating costs and expenses | 50.77 | 176.21 | 48.64 | 170.01 | 4.4 | 3.6 |
Other income and expense (Note 1) | (0.64) | (0.64) | 0.10 | 0.09 | (743.1) | (783.1) |
Operating income | 10.45 | 46.35 | 10.96 | 46.82 | (4.6) | (1.0) |
Income before tax | 10.43 | 46.99 | 10.85 | 47.23 | (3.8) | (0.5) |
Net income attributable to stockholders of the parent | 8.26 | 36.92 | 8.40 | 36.48 | (1.7) | 1.2 |
EBITDA | 20.38 | 86.01 | 20.84 | 86.25 | (2.2) | (0.3) |
EPS(NT$) | 1.06 | 4.76 | 1.08 | 4.70 | (1.7) | 1.2 |
2024 Guidance
For 2024, the Company expects total revenue to increase by NT
Acquisition of Property, Plant and Equipment in 2024 is expected to increase by
(NT$ 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.
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
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 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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