Chunghwa’s net profit slips in 3Q12 and 9M12 as operating costs rise

29 Oct 2012

Taiwanese multi-service operator Chunghwa Telecom (CHT) has released its financial results for the three- and nine-month periods ended 30 September 2012, revealing that net profit in both 3Q12 and 9M12 declined as operating costs increased. For the three-month period, CHT posted a net profit of TWD10.20 billion (USD342 million), down 14.6% year-on-year, while net income in the first nine months of 2012 stood at TWD30.96 billion, representing a decline of 16.5% against the same period a year earlier. Operating costs and expenses for the third quarter of 2012 totalled TWD42.30 billion, up 1.1% y-o-y, with CHT attributing the increase to higher costs for handsets sold by the company’s hardware arm Senao, coupled with higher personnel expenses related to an early retirement programme conducted in the quarter. In 9M12 meanwhile, operating costs and expenses stood at TWD126.14 billion, up 5.7% against 9M11, mainly due to higher costs for handsets sold, maintenance, material, rental and depreciation expenses.

In terms of revenues, CHT reported a total net revenue of TWD54.40 billion in 3Q12, reflecting a 2.3% annual increase. Turnover from mobile services represented the largest slice of the total – 45.7% – while domestic fixed, international fixed and internet accounted for 34.8%, 7.1% and 11.1% respectively; the remainder was from ‘other businesses’. Third quarter mobile revenues increased by 4.7% compared with 3Q11, with higher turnover from value added services (VAS) helping to offset a decline in mobile voice revenue related to increased competition and enforced tariff reductions. In the first nine months of the year CHT generated total turnover of TWD164.01 billion, up 0.9% y-o-y, comprised of 45.8% mobile, 11.1% Internet, 34.4% domestic fixed, 6.9% international fixed, and the remainder from other businesses.

At the end of September 2012 CHT reported a total mobile subscriber base of 10.21 million, up 2.5% against the same date a year earlier. Further, the operator said it had 2.22 million mobile internet subscribers on its books, up 68.5% y-o-y, and prompting it to revise its subscriber targets for the end of 2012 upwards, from 2.35 million to 2.45 million due to such ‘strong growth momentum’. Alongside mobile, CHT said that with it continuing to execute its strategy of encouraging FTTx migration, at end-September 2012 the number of customers accessing high speed broadband via its fibre infrastructure stood at 2.67 million, representing 58.5% of its total broadband user base.

Commenting on the results, CHT chairman and CEO Dr Shyue-Ching Lu noted: ‘We are pleased with our third quarter financial results and we remain on track to meet our full year financial guidance.’

Taiwan, Chunghwa Telecom