Chunghwa Telecom Reports Operating Results for Fiscal Year 2009
TAIPEI, Taiwan, March 30 /PRNewswire-Asia/ -- Chunghwa Telecom Co., Ltd. (TAIEX: 2412, NYSE: CHT) ("Chunghwa" or "the Company"), today reported its operating results for the year ending December 31, 2009. All figures were presented on a consolidated basis and prepared in accordance with generally accepted accounting principles in the Republic of China ("ROC GAAP").
(Comparisons, unless otherwise stated, are to the prior year period)
Financial Highlights for Full Year 2009:
-- Total consolidated revenue decreased by 1.6% to NT$198.4 billion
-- Mobile communications business revenue decreased by 2.6% to NT$86.5
billion; mobile value-added services (VAS) revenue increased by
20.5% to NT$8.45 billion
-- Internet business revenue increased by 2.7% to NT$23.7 billion;
internet value-added services (VAS) revenue increased by 18.0% to
NT$2.0 billion
-- Domestic fixed communications business revenue decreased by 2.2% to
NT$71.5 billion
-- International fixed communications business revenue decreased by
4.3% to NT$15.2 billion
-- Total operating costs and expenses decreased by 0.8% to
NT$142.0billion
-- Net income totaled NT$43.8 billion, representing a decrease of 2.8%
-- Basic earnings per share (EPS) decreased by 2.8% to NT$4.51
Financial Highlights for the Fourth Quarter of 2009:
-- Total consolidated revenue increased by 2.6% to NT$51.1 billion
-- Mobile communications business revenue increased by 1.6% to NT$21.9
billion
-- Internet business revenue increased by 9.5% to NT$6.4 billion
-- Domestic fixed communications business revenue decreased by 0.2% to
NT$18.5 billion
-- International fixed communications business revenue decreased by
6.1% to NT$3.7 billion
-- Total operating costs and expenses decreased by 0.4% to NT$38.0
billion
-- Net income totaled NT$10.6 billion, representing an increase of
24.6%
-- Basic earnings per share (EPS) increased by 24.6% to NT$1.09
Dr. Shyue-Ching Lu, Chairman and Chief Executive Officer of Chunghwa Telecom said, "I am proud that we were able to sustain our overall market leadership and achieve solid results in 2009, despite the challenges brought on by a difficult economic climate, intense competition in the mobile services and broadband access markets and the tragic impact of Typhoon Morakot in Taiwan. We swiftly implemented cost controlling initiatives to address the weakened economic conditions, while also improving our value-added services, MOD/IPTV offering and key Enterprise solutions. Our firm commitment to investments in innovation has not wavered and, moving forward, we plan to continue enhance our VAS, accelerate our fiber deployment and further enrich our MOD/IPTV content in order to execute our growth plan."
Revenue
Chunghwa's total consolidated revenue for full year 2009 decreased by 1.6% year-over-year to NT$198.4 billion, of which 43.6% was from the mobile business, 11.9% was from the internet business, 36.0% was from the domestic fixed business, 7.7% was from the international fixed business and the remainder was from others. The primary reasons for the revenue decline were economic downturn and market competition.
For the mobile business, total revenue for 2009 amounted to NT$86.5 billion, representing a decline of 2.6% year-over-year. The decrease was mainly due to the average revenue per user (ARPU) decline resulting from the market competition and the overall economic environment. Furthermore, the decline in handset sales from the slow economic environment also contributed to the revenue decrease.
Chunghwa's internet business revenue increased by 2.7% year-over-year to NT$23.7 billion in 2009, mainly attributable to the successful promotion for corporate solution and internet VAS revenue growth from internet security services, and on-line music service etc.
For 2009, domestic fixed revenue totaled NT$71.5 billion, representing a decrease of 2.2% year-over-year. Of this, local and DLD revenues decreased by 3.9% to NT$33.2 billion and 12.7% to NT$7.4 billion year-over-year, respectively. The decrease of local revenue was mainly due to the deteriorating economic environment, as well as mobile and VOIP substitution. The decrease of DLD revenue was a result of a mandated interconnection tariff decrease by the National Communication Commission ("NCC") and the economic downturn.
Broadband revenue, including ADSL and FTTx, decreased slightly by 0.3% year-over-year to NT$19.9 billion. Although FTTx revenue increased as more ADSL subscribers migrated to fiber solutions, such an increase did not fully offset the ADSL revenue decrease that was the result of the migration to FTTx, market competition and the mandatory NCC tariff reduction.
International fixed revenue decreased by 4.3%, primarily because of the economic downturn, which resulted in the substitution of cost-saving services, such as VOIP, for traditional International Direct Dialing (IDD) services.
Finally, others revenue increased by 74.3% to NT$1.5 billion in 2009 compared to the same period of 2008.
For the fourth quarter of 2009, total revenue was NT$51.1 billion, representing a 2.6% increase from the same period of 2008. Of this amount, the mobile business contributed 42.9%, the internet business was 12.6%, the domestic fixed business was 36.2%, the international fixed business was 7.3%, and the remainder was from others.
Costs and expenses
Total operating costs and expenses for 2009 were NT$142.0 billion, a decrease of 0.8% compared to 2008. This decrease was mainly due to decrease in depreciation, material & maintenance expenses, as well as decline in cost of sales from Senao due to its decreased sales.
For the fourth quarter of 2009, total operating costs and expenses were NT$38.0 billion, a decrease of 0.4% compared to the fourth quarter of 2008. The decrease can largely be attributed to a decrease in material and maintenance expenses, as well as decreased depreciation expense.
Income Tax
Income tax expense for 2009 were NT$12.7 billion, representing a decrease of 8.3% compared to NT$13.9 billion for 2008. This decrease was mainly due to the decreased operating profit.
EBITDA and Net Income
EBITDA and operating profit for 2009 decreased by 4.2% to NT$92.7 billion and by 3.7% to NT$56.4 billion, respectively, primarily due to the revenue decline. The Company's EBITDA margin and operating profit margin for 2009 were 46.7% and 28.4%, respectively, compared to a 48.0% EBITDA margin and a 29.0% operating profit margin, respectively, for 2008. Net income for 2009 decreased by 2.8% year-over-year to NT$43.8 billion. The primary reason for the net income decrease was the decline in revenue.
EBITDA and operating profit for the fourth quarter of 2009 increased by 4.4% to NT$22.1billion and by12.7% to NT$13.2 billion, respectively. The reasons for these increases were the overall revenue growth and the reduced operating costs and expenses. The EBITDA margin and operating profit margin for the fourth quarter of 2009 were 43.3% and 25.7%, respectively; both are up compared to 42.6% and 23.4%, respectively, for the fourth quarter of 2008.
Net income increased by 24.6% to NT$10.6 billion for the fourth quarter of 2009, primarily due to the NT$1.2 billion financial asset impairment recognized in the fourth quarter in 2008.
Capital Expenditures ("Capex")
Total capex for 2009 amounted to NT$25.5 billion, a 15.4% decrease compared to that of 2008. The decrease of capex was owing to the economic downturn. Of the NT$25.5 billion capex figure, 62.3% was used for the domestic fixed communications business, 19.7% was for mobile business, 8.2% was for internet business, 5.1% was for international fixed communications business and the remainder was for other uses.
Cash Flow
Cash flow from operating activities for 2009 decreased by 15.9% to NT$77.3 billion compared to 2008. This was primarily because of the revenue decline, a NT$4.0 billion increased pension fund contributions due to the income tax rate adjustment in 2010, the NT$3.2 billion income tax refund received in 2008, the 2009 revenue decline as well as the change of other operating assets and liabilities.
For the fourth quarter of 2009, our net cash flow from operating activities decreased by 22.6% year-over-year to NT$27.8 billion. This was primarily because of the increased pension fund contributions as mentioned.
As of December 31, 2009, the Company's cash and cash equivalents totaled NT$73.3 billion, a decrease of 9.9% year-over-year, primarily due to the capital reduction distribution to shareholders in March of 2009.
Businesses Performance Highlights:
Broadband/ HiNet Business
-- Total broadband subscribers were 4.3 million as of December 31,
2009. Chunghwa made important progress over the course of 2009:
There was a strong growth in FTTx subscriptions, with 568,000 net
additions bringing the total to 1.64 million subscribers. ADSL
subscribers decreased by 575,000 to 2.67 million. By the end of
2009, the number of ADSL and FTTx subscriptions with a service speed
greater than 8 Mbps reached 2.0 million, representing 46.8% of total
broadband subscribers, compared to 36.9% at the end of 2008.
-- HiNet subscribers totaled 4.07 million at the end of 2009, which
were 35,000 less year over year.
Mobile Business
-- As of December 31, 2009, Chunghwa had 9.27 million mobile
subscribers, an increase of 3.6% compare to 8.95 million at the end
of 2008.
-- Chunghwa had 1.17 million net additions to its 3G subscriber base
during 2009, recording a 32.9% year-over-year growth, bringing the
total to 4.73 million as of December 31, 2009.
-- Mobile VAS revenue for 2009 was up 20.5% year-over-year to NT$84.5
billion, of which SMS revenue was up 12.3% year-over-year and mobile
Internet revenue was up 54.3% year-over-year.
Domestic/International Fixed-line Businesses
-- As of the end of 2009, the Company maintained its leading fixed-line
market position, with fixed-line subscribers totaling 12.45 million.
Financial Statements
Financial statements and additional operational data can be found on the Company's website at http://www.cht.com.tw/ir/filedownload .
Note Concerning Forward-looking Statements
Please be advised that Chunghwa's 2009 full year annual report including the complete U.S. GAAP reconciled financial statements and footnotes will be part of the Form 20-F to be filed to U.S. SEC. This Form 20-F, or the 2009 full year annual report, will be available at the U.S. SEC and on Chunghwa's website no later than June 30, 2010.
Except for statements in respect of historical matters, the statements made in this press release contain "forward-looking statements" within the meaning of Section 27A of the U.S. Securities Act of 1933 and Section 21E of the U.S. Securities Exchange Act of 1934. Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the actual performance, financial condition or results of operations of Chunghwa to be materially different from what may be implied by such forward- looking statements. Investors are cautioned that actual events and results could differ materially from those statements as a result of a number of factors including, among other things: extensive regulation of telecom industry; the intensely competitive telecom industry; our relationship with our labor union; general economic and political conditions, including those related to the telecom industry; possible disruptions in commercial activities caused by natural and human induced events and disasters, including terrorist activity, armed conflict and highly contagious diseases, such as SARS; and those risks identified in the section entitled "Risk Factors" in Chunghwa's annual reports on Form F-20 filed with the SEC.
The forward-looking statements in this press release reflect the current belief of Chunghwa as of the date of this press release and we undertake no obligation to update these forward-looking statements for events or circumstances that occur subsequent to such date.
About Chunghwa Telecom
Chunghwa Telecom (TAIEX 2412, NYSE: CHT) is the leading telecom service provider in Taiwan. Chunghwa Telecom provides fixed-line, mobile and Internet and data services to residential and business customers in Taiwan.
Contact:
Fu-fu Shen
Tel: +886-2-2344-5488
Email: [email protected]
SOURCE Chunghwa Telecom
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