Chunghwa reports lower EBITDA, net income on higher operating costs

1 May 2012

Taiwan’s Chunghwa Telecom (CHT) has reported a drop in net profit for the first three months of 2012 on the back of lower earnings before interest, tax, depreciation and amortisation (EBITDA) which, it said, reflected higher operating costs and expenses. For the quarter ended 31 March 2012 CHT posted an EBITDA of TWD19.4 billion (USD664 million), down 11.8% year-on-year, while income from operations decreased by 18.7% to TWD11.3 billion. As a result, the company recorded net profits of TWD9.5 billion, representing a decline of almost 20% compared to the corresponding period a year earlier. Total revenues, however, proved a more positive financial indicator, with CHT generating consolidated turnover of TWD55.4 billion, an increase of 5.6% from 1Q11. Revenues from mobile services were TWD25.6 billion, accounting for the bulk of the company’s total sales (46.2%), while domestic fixed line business represented 34.3% (TWD19 billion, down 1.1% year-on-year), followed by internet (11.2%), international fixed line (6.6%) and other (1.7%). Consolidated revenue growth, CHT noted, was primarily driven by higher turnover from value added services and increased handset sales, although offset by a decline in mobile voice revenue and drops in domestic long-distance (DLD) and broadband revenue resulting from recent tariff cuts mandated by the National Communication Committee (NCC).

At end-March 2012 CHT recorded a total of 10.091 million mobile subscribers, an increase of 3.1% against the same date a year earlier, with 6.180 million of those being 3G subscribers. In addition, at the end of the quarter under review the telco’s FTTx subscriber base had reached 2.527 million, accounting for 55.8% of all the company’s fixed broadband users, with ADSL accesses numbering 2.001 million at that date.

Commenting on the results, Dr. Shyue-Ching Lu, CHT’s chairman and CEO, noted: ‘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.’

Taiwan, Chunghwa Telecom