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Chunghwa Telecom Reports Operating Results for the First Half and Second Quarter of 20051 September 2005
Chunghwa Telecom Co., Ltd (TAIEX: 2412; NYSE: CHT) ("Chunghwa" or "the Company"), reported revenues for the half year ending June 30 of NT$90.7 billion, net income of NT$24.9 billion and fully-diluted earnings per common share (EPS) of NT$2.58, or US$ 0.81 per ADS. The Company also reported earnings for the second quarter of 2005 with revenues of NT$46.2 billion, net income ofWeb site: http://www.cht.com.tw/ir/filedownload NT$12.8 billion and earnings per share (EPS) of NT$ 1.33, or US$ 0.42 per ADS. All figures were prepared in accordance with US GAAP.
Revenues and Costs
For the first half of 2005, total revenues decreased by 1.3% year-over-year. Of the revenues from individual business segments, 36.8% was from fixed-line services, 39.3% was from wireless services and 22.5% was from Internet and data services, with the remainder from other business lines. Of the individual segments, mobile revenues increased by 2.7% while Internet and Data increased by 2.2%. Revenues from Local services decreased by 7.3%, due mainly to the decrease in dial-up minutes and mobile substitution. Revenues from DLD services decreased by 8.0% mainly due to mobile substitution. ILD revenue decreased by 5.3% due to the decline in average usage fee resulting from severe competition, however, the increase of the wholesale revenue partially offset the decline of the retail revenue. Overall, fixed line revenue decreased by 7.0% year-over-year.
For the first half 2005, operating costs and expenses increased by 1.5% year-over-year. This was mainly due to an increase in handset subsidies of NT$400 million and an increase in marketing expenses for the mobile business of NT$254 million. Pension expense also contributed NT$383 million to the increase, owing to changes in actuarial assumptions.
Total revenue for the second quarter 2005 was NT$46.2bn, a 3.6% increase quarter-over-quarter. Of this, 36.5% was from fixed-line services, 39.5% was from wireless services and 22.3% was from Internet and data services, with the remainder from others.
Total operating costs and expenses for the second quarter of 2005 were NT$31.8bn, a 5.3% increase quarter-over-quarter. This was primarily due to increase in maintenance expenses, increased marketing expenses for the mobile business, and handset subsidies.
Businesses Performance Highlights
Internet and Data Services
-- Internet and data revenue for first half 2005 increased by 2.2% year-over-year to
approximately NT$20.4bn. Internet and data revenue in the second quarter of 2005 was
NT$10.3bn, a 2.3 % increase quarter-over-quarter.
-- The total number of internet subscribers was nearly 3.96mn as of Jun. 30, 2005, a 7.1%
increase year-over-year. In the second quarter of 2005, Chunghwa added 91,000 new
subscribers.
-- ADSL subscribers totaled 3.36mn as of Jun. 30, 2005, a 23.3% increase year-over-year.
ADSL subscriber growth has continued and Chunghwa added 160,000 subscribers in the
second quarter of 2005.
Mobile Service
-- Mobile revenue for the first half of 2005 increased by 2.7% year-over-year to NT$35.6bn.
For the second quarter of 2005, mobile revenue increased by 4.6%.
-- At the end of June 2005, mobile subscribers remained at 8.1mn. The company has
continued to clean up inactive prepaid subscribers to increase the quality of total
subscribers.
-- Chunghwa continues to be the leading mobile operator in Taiwan in terms of both
revenue and subscriber market share with 35.2% and 39.3% respectively as of the end of
June 2005.
Fixed Line Services
-- Total fixed line revenues for the first half of 2005 declined by 7.0% to NT$33.4bn, due
mainly to fixed line competition, mobile substitution and continuous migration of dial-up
subscribers to ADSL broadband services. Fixed-line revenue for the second quarter of
2005 was NT$16.8bn, an increase of 1.7% quarter-over-quarter.
-- Chunghwa's total fixed line subscriber base stood at approximately 13.3mn as of Jun. 30,
2005, an increase of 0.6% year-over-year.
In addition to the solid performance, Chunghwa Telecom became a private company after the overwhelmingly successful ADR placement and the concurrent domestic offering. Currently, MOTC is still the major shareholder of the Company, owning 43.88% of the shares, while QFII and employees own 37.95% and 5.15% of the shares, respectively. The Company also announced that the payment date of dividend reflecting the operating results of year 2004 for ADR shareholders will be on September 12th.
Financial Statements
Financial statements and additional operational data can be found on our website at www.cht.com.tw/ir/filedownload .
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.
The financial statements included in this press conference were unaudited, and prepared and published in accordance with U.S. GAAP. Chunghwa Telecom also prepared certain financial statements for the same periods discussed in this press conference under ROC GAAP. Investors are cautioned that there are many differences between ROC GAAP and U.S. GAAP. As a result, our results under U.S. GAAP and ROC GAAP may in many events be substantially different.
The forward-looking statements in this press conference reflect the current belief of Chunghwa Telecom as of the date of this press conference and we undertake no obligation to update these forward-looking statements for events or circumstances that occur subsequent to such date.
For inquiries:
Fufu Shen
Investor Relations
Tel: +886-2-2344-5488
Email: chtir@cht.com.tw
Source: PR Newswire
All trademarks and copyrighted information contained herein are the property of their respective owners.
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