CHT - Earnings call transcript Q2 2021 | Chunghwa Telecom Co., Ltd.

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Operator

Good afternoon, ladies and gentlemen. Welcome to Chunghwa Telecom Conference Call for the Company’s Second Quarter 2021 Operating Results. [Operator Instructions] For your information, this conference call is now being broadcasted live over the Internet. Webcast replay will be available within an hour after the conference is finished. Please visit CHT IR website, www.cht.com.tw/ir, under the IR Calendar section.

turn to to like I’d it Ms. over Now Investor Tsai, the of Director Angela Relations. Ms. ahead. please Tsai, go

Angela Tsai

call. This you. for our results Welcome Relations Tsai, Chunghwa to conference XXXX quarter Thank second Angela Telecom. is Director of Investor

President: Joining me on Chen, call today Chief Officer. and Kuo, Financial are: our Vincent Harrison the our

session. by to management After Slide of of operational On financial an highlights. our the by business our today’s call, statement. providing followed discussion During from will a on move we question-and-answer will begin note harbor please overview this quarter, X, and safe

President will President I turn Now, the call please, over to ahead. Kuo. go Kuo,

Harrison Kuo

number three Tsai. Thank continue report overall our of end of performance. quarter sign-ups Angela XXXX XXXX end year. to the earnings In to quarter, In accumulative are which by business of to business, pleased we our X our Hello, our expect the you, ahead level of our of by to the million second million and opportunities sign-ups meet of quarter alert everyone, welcome XG stay-at-home XG enhance is second this the and that exceeded mobile call. X COVID-XX schedule under guidance

mid as handsets applications to growth expect the vertical variety end and our peers. XG go introduce continue and low churn, maintain a out of to We develop innovative to XG we XG enterprise network

of quality uplift positive we monthly turned in first stations customers time continued average extensions in Moreover, to basis in than experience and have second year. to mobile we XX% year-over-year postpaid to coverage and XG and this award contracts XG of XG these our the mainly quarter a XG we our services, provide this end report According the base postpaid of fees. stations contributed X,XXX growth XG the the expect adopt accelerated more by on the have mobile due renewed their quarter Taiwan an to year. to quarter, expected, to ARPU subscribers of XG at As best the who this first-ever services base approach XX,XXX July, and and deployment contributions second and received

endeavor leading our Taiwan's maintain will status mobile market. We to in

for Next, fixed quarter. service up the second demand in drove COVID-XX broadband also

higher net Broadband on from a year-over-year uplift. of result ARPU subscriber of to of of devices continued its XX% XXX turned by quarter our to to popularity the number demand and work also Wi-Fi The adds megabit increased year-over-year. applications. as sign-in support continued second Our home the online our in positive The home-centric increased or year-over-year capabilities. learning quarter-over-quarter. XXX% basis by Subscriber per of for second home subscribers broadband number migration approximately increase increased MOD a

introduce Olympic XK to forecasted on and simulation first-ever experience. MOD was on VR Hami cutting-edge process and platform to In our technologies the Game continue we July enhance As Tokyo exclusively – viewing we quality the video. delivered

building XG XG Our VR the enable multi-angle event. of technology this contests services demonstrated have for broadcasting plus performance the further in headsets VR doing and engage our to we during bundled

continue to digital convergence. in to services our We grow video expect the

Now allow lines. our each business me of to

Turning to X. Slide

revenue update an market a In subscriber share we business. the leading XX% the mobile in our of of see IoT, can You of to market continue our the maintain second XX.X% quarter, position the excluding a share SIMs. mobile with and market

application both revenue mobile revenue. positive customer majors best increase post-payment service among three the the adds net are among which revenue contributed and mobile remains and our our highest quarter, adds of peers. with turned our the rate churn big the and year-over-year, The increasing During the postpaid value-added

which year-over-year, were of in connection business The stemming overall opportunities further can X increased broadband our on quarter. in turn by new services higher-speed to competition XX% broadband for update from in to second continue, X% increased mobile we We per expect number other our Slide believe by normal. year-over-year. an benefits performance. We above ARPU about which XXX success reasonable megabits the higher, pleased migrating stay-at-home the our for relatively second enhance to set the fees up and or subscribers of replaced our subscribers that Please

revenue customers Our contributions VPN service grew from as well. enterprise

connection, In demand adds of to years to we that to for second under out two our gigabit roll higher observed were addition, coupled per we net transformation, response innovative the for digital service we positive begun ongoing in new the demand encouraged applications subscriber to with customer third In after Hami see decrease. has requiring turn speed the quarter, expect normal.

will leading both We are -- the Taiwan. in status in In overall mobile platform XXXX for for demand second as our quarter XXXX, service second video trend of and slide illustrates X growing multi-IPTV quarter largest broadband the confident, video In quarter-over-quarter of a increased, our numbers performance. maintain subscriber upward digital we our maintain business that the business. and we to COVID-XX platform as of result successfully continue Hami under the alert

increase Tokyo both broadcasting a viewership the that of due encouraging. as exceeding is addition, has World at week upsell record, MOD In first well, and the Olympics in the mainly Cup, services. VOD hit the channel during which Taiwan in expected Games, to ARPU successful achieved the year-over-year of advertising and XXXX revenue X% FIFA

our sell-up highest package XX% and price PASS tiered number choose packaging. almost price ALL of doubled subscribers, quarter-over-quarter channel SVODs the Our

revenue in project by ICT from stream. X year-over-year, year-over-year cloud content multi because respectively. mainly broadband and increased to revenue ICT and X% on and Cyber by bundled fixed video [Technical XX% update forward, of project ICT by and delays. we emerging year-over-year, turn due to our to some in video, home and to an slide continue public services, Please revenue revenue to Overall, of XX% enhance drive with business. our revenue performance second recognition revenue our business for home-centric the XX% ICT the XG services. quarter, revenues of Difficulty] continue video service create including and Security sector Moving will grow and smart terms decreased

to However, we the catch this second half expect up of during year.

for overall and further our be project continue technology margin. more will we increase to cater opportunities and to ICT capabilities enhance profit selective more revenue digital forward, to emerging Going

would results. who I review turn to over Chen, our please go Chen, Mt. financial the our call will Vincent to like CFO, Now, ahead.

Vincent Chen

Thank Kuo. slide statement. quarter now highlights you, President Good from turn I which Please our everyone. review second to our provides will afternoon results. income financial XX,

increased of quarter income our Income by increased basis, a second from net total and and operations X.X% the For X.X%. increased X.X% by and revenues expenses on by costs operating increased by XXXX, year-over-year X.X%.

from revenue, period revenue same VoIP total handset provides In in revenue, XX, increased by due our mainly result a XXXX. quarter substitution. fixed which of year-over-year, In decrease XXXX, the in the a broadband mobile of the addition, and revenue to of XX.X% to breakdown EBITDA as margin service Slide business X.X% XX.X% segment. of by voice offset in second increase revenues increased the sales revenue

Moving on to the slide XX.

year second billion period. or in of operating quarter payable. $X.XX accounts of quarter prior compared by and Our shows and increased operating the the increase costs to XX.X% or increase XX and due activities expenses mainly of in $X.XX marketing year-over-year, an attributable from XXXX, increased second of that of depreciation receivable increase to collection to the by This and the expenses. amortization the was the mainly flows X.X% goods accounts sold Slide cash cost billion expenses for

and you cash balance issuance equivalents or XXXX, to was increase relative XX, of June an corporate June the the of our of The an that table XX, primarily increase was may As of increase forecasts. flows cash XX, operating of XX.X% activities. $XX.XX billion, page compares to with financial that bonds cash from results and $XX.XX On XXXX. find due billion

revenue our net XX. quarter the As income, Please performance to measures and income can from expectations. EBITDA all guidance you EPS, exceeded almost for including XXXX, turn see QX slide operations, and EBITDA our second margin, met our

including business such schedule For quarter XXXX, XG of cable. and spending focuses billion maintain spending is XXXX, CapEx, budgeted our we line our XXXX the XXXX, the was In XG IDC in of XG of XG deployment. second construction our station submarine and peak. we that our our capital track in in accelerating base on investment with network, forecast Therefore, as $XX.X

turn our President and would awards recognitions. I to the introduce to over call to like Kuo Now

Harrison Kuo

Vincent. you, Thank

recognitions Next quarter. second XX our mobile speed illustrates coverage, XG awards in from the responsibility. corporate destination Highlighting slide our and social and sustainability governance

to our advantage demand. will leverage integrated our to quality infrastructure continue Going with meet forward, to provide services we customer network

are open floor we Now the for questions.

Operator

you. Thank

[ph] We our Instructions] please. question-and-answer are from is HSBC. first [Operator Lao from Shaile ahead Go question now beginning coming The session.

Unidentified Analyst

This is Shaile HSBC. [ph] from Lao

of like I ask So about stations, base base to the would target stations. XG

you So at the XXk in report the year, target, be it? the that target annual -- the of end by is now mentioned have increased your so should

Harrison Kuo

asking. your thank and Hello you Yes. for

completed stations year. be will about construction five-year is of the by three It this end base original within the be XX,XXX that years. On completed expected will

you. Now we have more than X,XXX stations. Thank base

Operator

is next Chan Thank Lisa question you. please. coming Go [Indiscernible]. The ahead [ph] from from

Angela Tsai

Yes.

think target I HSBC's to -- base year. the the back need Sorry, original question for the about for to stations I this XG

target, our I question. to not I about were we clarify think, original want think clear that question. I really the the

that this question I approach right? is think the thinking year. by -- we now the for will I XX,XXX -- original was our think of base station XG end are you. number your And the XX,XXX. about this year, number Thank about original we target

Operator

you. Thank

please. from Chan Lisa ahead, having are we Now [Indiscernible]. Go

Unidentified Analyst

us more just have -- color for of third fourth quarter one Thanks give for quarter taking We for my year's you question this could question. outlook? or

Harrison Kuo

for Okay. Thank question. you your

of of So services very despite exciting still because see our the the results outbreak second revenues. pandemic, -- from broadband year, the mobile a we revenues also the half but

some confident and half, yes, momentum ahead our for second stream our we can will on confident forecast although, track full generation for we turbulence expect going we we we'll in second the that the half, keep and meet So, revenue also year. are will are -- that the the but

Unidentified Analyst

Thank you.

Operator

Sara question Morgan from please. next Thank The is coming Stanley. ahead you. Go from Wang

Sara Wang

Thank have you. three I questions.

the or any is that, guidance? question but profit year, total is target our numbers, station target revenue then, is so question base we remain first budget previously second regarding change full the XX,XXX unchanged. And CapEx say, that, in there the XX,XXX, XG now So

I change in lower if ask proposition structure on, is price And ICT. may expected? the or than a CapEx my there's question So then, is third the

say, percentage one next would for say, revenue you. ICT outlook terms on management Thank growth, the you -- revenue years? some you -- provide would please a or in year So next or or, two contribution as of of

Harrison Kuo

you, Thank for Sara asking. Okay.

profit we still first our at year So for the question, regarding guidance, full forecast this the revenue point. maintain

although, but the – pandemic. than So tend we the performance expected, uncertainty is of our better because of

stay in a want any provide we'll making manner, still changes. But we our if more conservative updates, we forecast. make So -- our to make

to XXk base although, of revise XG, CapEx from we our the in our So also our cost for always more right, XXk, the for and of our time don't right so Yeah your second we for target equipment by as budget, question XG CapEx increased on station and also goes the base use number a the we XG we precise XG manner, network because the lower. be will big the data. deploy construct, stations

money you. capital some So expenditures. now some and save Thank we'll

Angela Tsai

As services for the Tokyo the Olympics third recent question Games. MOD the think I about IPTV

I also I -- is for percentage think think think oh, I quarter mentioned our of our we growth, okay, ICT I Oh, the second close about And MOD outlook ICT you are okay? pretty the about sorry. ICT ICT. experienced pretty I good. business, talked contribution. -- I'm there's services think revenue,

the compared this mentioned little next we lower. yeah just year the year about in So continue for some projects continue public increase continue have next next the it last for already big with -- earlier, think year to the to size Yeah. the I for grow. year is number we a Last year, believe having government revenue a so will coming year ICT to sure. large and side bit the mentioned quarter but early for is years the But and because will after bit the percentage the this -- year we we business

the increase. revenue our be -- percentage consolidated should should for so for -- accounted And

for sure. this should be -- for accounted percentage for -- question. Yeah. think, double-digit of I out But is

Sara Wang

double-digit further right? is just clarify to growth Sorry, this rate,

Angela Tsai

for -- for check, year, rates me So the for rates for whole already are really Yes. growth the the second quarter, we yes, double-digit. let double-digits quarter for also second not growth the the

Sara Wang

And see. the I percentage? what's then,

Angela Tsai

in with government mentioned about because already But is which guidance budget -- compared our of the mentioned about revenue, our think I number -- total project last the the project compared think last lower -- formation year, we the had with that project. year government year, even year, let ICT, original for I we this budget me say -- this year in in this that, revenue

So about the be ICT I'm sure. gross gross total number around revenue for talking like double talking not revenue about like this we the year, should consolidated digits should be -- for the number. were

to small I accounted last revenue. But number than little should think a for the gross that lower revenue gross consolidated lower XX% be of -- should -- the number the of the total like be total year. number, the than that ICT

If be question. I the think large year, this project earlier hope you last this that explained the explain should we exclude, year. happened I gross, your okay? number already

Sara Wang

got Yeah, you. it. Thank

Operator

Thank you. is from And coming in and please. now The Instructions] next session. gentlemen, are HSBC. ahead question-and-answer ladies Go our question Anderson from we Neale [Operator

Neale Anderson

there. Good Hi, afternoon.

from in some on Just you the mobile Presumably a also quarter. the benefit being saw year-on-year second revenue question please. year last outlook roaming weaker

it revenue continue XG you. fairly think So revenue? under see will accelerate on, or to Thank how think outlook improve? Do mobile for you you you that from will stay Do steady? here do the

Harrison Kuo

asking. the revenue, the for momentum XG we continue. anticipate will Thank And you Thank you. growth

Neale Anderson

give that by a will on that be reach, you give can of basis, end any indication or growth year-on-year the possible X% indication to you percentage might think So where year? this think you of it is where of currently any

Harrison Kuo

if proprietary you. your is any Thank introduce we question competition want information. to answer information and disclose don't this such irrational To we

Neale Anderson

I see. you. Understood. Thank

Operator

back don't ahead Currently turn over questions. will it we President you. Go have Kuo. Thank please. I further to

Harrison Kuo

Thank you participation. for Goodbye your everyone.

Operator

Thank hour. Calendar Chunghwa There you be www.cht.com.tw/ir participation Kuo. conference. Telecom's the a President visit your you Thank IR for replay in within section. under webcast an Please will

Goodbye. disconnect. may now You

Chunghwa Telecom (CHT) 1 Aug 212021 Q2 Earnings call transcript