2412.TW - Earnings call transcript Q3 2022 | Chunghwa Telecom Co., Ltd.

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Operator

Good afternoon, ladies and gentlemen. Welcome to Chunghwa Telecom Conference Call for the company’s Third Quarter 2022 Operating Results. [Operator Instructions] For 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 third Angela Telecom. is Director of Investor

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

on by we management and statement. the discussion of of our to segment an performance our will followed business Slide today’s call, note providing quarter, a During in financial by After, highlights. the move will begin On please session. overview the third question-and-answer our X, Harbor Safe

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

Harrison Kuo

robust and results everyone. will an I performance you, to our third our provide hello quarter. in conference Angela the call. third quarter now Thank on Welcome update

on XG see development the In an our overview Let’s X market in positive towards manner. migration for a we of of the quarter, begin mobile Slide operators third mobile of Taiwan’s business. steady

we for for value creating competition. is healthy predict customers, on market Focusing which good

Looking Taiwan steady is into uncertainty. expected market in mobile potential economic remain in to four, the quarter

a market both of subscriber for maintain to and mobile quarter, third four revenue to basis year-over-year subscriber not quarters. our successfully share year-over-year only on terms but terms respectively. leadership the XX.X% in the In we Taiwan’s are our to market, in growth the In achieve revenue also position, and of pleased to consecutive share XX.X% we increased share

share that strategy proving is overall positioned is business attention Our our successful. customer the share than suggesting revenue larger subscriber

turn to grew reflecting particular, migration. prepaid in year-over-year, the members, our to revenue prepaid subscriber numbers enhancing total closer sales third for both increase can increased year-over-year, maintain by business. increased quarter, X.X% segment XG service our our We outperforming increase IoT significantly, of position possibly our look resulting and SIMs. by In are forward. up-sell mobile a leadership excluding we X and In offers. SIMs number to in X.X% confident the the Please the going from due of the subscriber Mobile postpaid attributable success Slide mobile at our that XG

In remain the peers. to our addition, rate our lowest churn continues among

in in for postpaid consecutive maintaining year-over-year quarter, quarters. most extensive in solid our growth With Meanwhile, reached of six the fundamentals, our deployment in face in consolidation. market X.X% upward an average uplift resulting XG. the industry trajectory intense third confident more we its the to leadership migration we mobile from and consumer attributable Taiwan’s fees network Our XG from observed ARPU ability XX% to to are mobile monthly maintain competition

as business. increased you growth our Moving its upward subscriber on ARPU fixed the quarters update fixed of in trend broadband consecutive by quarter, terms our to Slide of broadband X, year-over-year. X.X% business In an XX find continued may for numbers third total

zai are the We speed. thanks to promotional of a upgraded XX% swift effective Su excited quarter, In increased xing. third factors the package pace, swifter to zai see bi upgrade Su bi service at their adoption xing our

increased speeds who migrated for by service XXX up from of of Meanwhile, the peers. those services service to upstream or second or quarter, XXX accumulated our higher below. signups with second, than for in In service second per megabits or speed per paired per speeds signed us addition, XXX second about distinguishes megabits the attributable megabit of higher of year-over-year XX% megabits more which mainly XXX adopters the per their XX.X% speeds from

revenue our and performance, financial and respectively. ARPU the quarter, year-over-year In fixed growth third terms in X.X% X.X% indicating increases broadband of of

of X our the Group our of revenue Business Now, presents Slide Consumer let’s or move on to Business the Consumer performance Group. CBG.

remained year-over-year. X.X% of Business line Consumer Consumer quarter, in service revenue of Su Mobile the Fixed-line zai of promotion while by subscriber the total package. XG bi mainly flat xing positive business revenue results the delighted successful the increases to third and migration. number Business postpaid Group increased due Group delivered each we of Business service year-over-year, for by see year-over-year, are X.X% grew up-sell by As revenue payers Consumer Group to

However, fixed decline to though continued voice decrease, has the even revenue decelerated.

the maintain In particular, contributing Home In of sign-ups, helped by Taiwan. numbers including as our for the number sales for Business continued by XX XX.X% our increased in enhance dramas and revenue platform mainly exclusive our Business Wi-Fi In up year-over-year third monthly September the launch addition, of iPhone better services quarter-over-quarter video year-over-year in subscription-based efforts further promoting exceeding we one-time growth, Group performance. services, Hami subscription instead of largest fixed-broadband to Attracted increased and package iPhone third high-end Wi-Fi multiple-play subscriber fees third growth. quarter, X.X% Group’s XX.X% our and Consumer altogether device our of X.X% the a as invested, Slide by highlights X investment video revenue our year-over-year, the series with to charging early due status the successfully our in signing sales to way mobile, quarter, Group applications. subscribers Video, home-centric Consumer a Consumer the quarter, overall illustrates original achieving for MOD content Business in in we streaming In models. million. us X.X of paving our demonstrated

service the our services. engines, to the XX and boost to XX. to increased Group we an overview ICT quarter. World obtained XX Business X.X% rights FIFA due mainly cyber Cup Business exciting increased launch As its Enterprise is We of XX.X% exclusive of games, Please attributable business. for demonstrating AR due performance. In believe Other turn the are most fourth coming year-over-year and Cup emerging growth significantly revenue our experiences. our on subsidies super Business government quarter, XG to maintained of grants fourth increase growth third Group Group our customers Enterprise quarter, particularly of business attraction, revenue ready XG Slide of technology mainly to cloud combine and trajectory the by the broadcast which the bring World to in the will growth video sign-ups we in up deliver Enterprise also a ICT the basis, security, year-over-year the by robust to our revenue IDC, iPhone Enterprise and will

slightly continued in exceeding revenue although mainly communication revenue delivered transformation the by drive and highlights. Additionally, XG growth. that applications in bring the due up third for year-over-year increased networks multiple-fold access major total XX year-over-year. emerging business demand third most digital accumulated especially year-over-year recurring our increased quarter In our demonstrated data Slide demand private to schools, of XX.X% to speed growth quarter, illustrates as from our revenues, our fixed-line application upgrades enterprise the enterprise decreased performance revenue by strong projects revenues. broadband XX%

our rising clients. cloud In respectively, For revenue Business increase year-over-year by big and related reached see revenue the XX.X%, data international XX%, our delighted analysis, to Group the International growth of IDC Slide performance. services maintaining cloud attributable for business XX and third XX.X% services, to to completion we growth cyber government of XX.X% from and IDC revenue XX.X% some momentum, the its growth. demand global quarter, illustrates owing are year-over-year, security continued while to projects,

Thailand In successful increased of our to network and to introducing XG well September, project Asian abroad. mainly in continue and markets. proving from services its smart cultivate revenue operations, success addition, announced private to replicate in In other due our the manufacturing We contribution as this launch Thailand. plan in subsidiaries the Vietnam model

our Vincent like highlights. I for the financial turn to to would call Now,

Vincent Chen

results. Thank you, President I you Kuo. quarter Good will financial everyone. now walk afternoon, third our through

Slide highlights. Let’s start XX, with income statement

quarter from from costs from as higher and compared deployment. by a access. X.X%, services year and expenses For X.X%. core operations increased businesses, and period. and such XXXX, X.X% mobile the third network income and stable the mainly expenses revenues broadband revenues Net depreciation total by to of operating grew EPS due owing year-over-year higher increased remained expenses completion project by increased Meanwhile, to prior XG ICT on manpower basis, Income to

third and EBITDA our X% quarter. increase Additionally, stable a in Y-o-Y EBITDA remained the margin recorded

balance for Page and payment XX, the by which lower of to total X.X%, decreased is offset acquisition Compared attributed suppliers, of XX Total primarily the to and equipment. on increase plant to property, highlights. of Now move payable. decreased assets sheet payment dividends mainly to owing liabilities equipment and cash equivalents for cash bonds by X.X% accounts XXXX, for December and payable

XX continue our settlement presents by net We the from to level balance Page to of ratio as EBITDA operating our mainly due debt maintain sheet a decreased XX% stays summary healthy Cash of zero. on debt activities payable. X.X% is year, the flows accounts flows. cash over about at and

year-over-year as reached expenditure, capital spending for XXXX. CapEx mobile-related As peak XG XG decreased in capital including

compared to X.X%, by cash year. free period flows Additionally, increased same last

business. concludes subscriber results mainly from XX, Operating us guidance growing guidance. to to due uncertainty to and of all attributable net healthy better-than the developments of challenging higher higher improved strong our a guidance that provide smart broadband our growth expenses expenses. with with exceeded Taken quarter XXXX, beat cash devices support and businesses. of of our respect and goods financial migration, than and forecasts numbers, That our result On third to compares together, our and flows as profitability sold and economic costs businesses businesses our balance results. enable third Slide performance performance financial core a costs the overview Revenue revenue financial manage we QX and XG measures of business table of depreciation sheet financial expected and through due emerging EBITDA to income quarter top our of were forecasts. the core In steady profitability times.

the turn President, to Harrison. me our Let call over

Harrison Kuo

announced you, initiative to our XXXX. third next renewable efforts. transition demonstrate Energy XXX Vincent. our to power In resolution the demonstrates the by ESG in The to quarter, page Thank participate to global Renewable XXX% we

electricity we us corporate realize year, Taiwan secured of use addition, for single allows purchase largest this the XXXX. to renewable which IDCs In agreement XXX% the in power our in

we Chunghwa’s from initiate to recognized plant project, international globally, in Tai badminton been with world planting institutions and tree organizations. ongoing efforts ESG years. Taiwanese next XX,XXX multiple player, trees Additionally, have worked to Tzu-ying, awards receiving aiming famous X

greater will would and Sustainable to Question-and-Answer questions. promote global Thank Session forward, our to our local practices for satisfy like At our Going continue and I this you develop up open ESG UN time, for for attention conference call communities. to good Goals Development your to we the support. the and

Operator

from Go ahead first Neale [Operator Instructions] coming question is HSBC. from Our Anderson please.

Neale Anderson

Two Good you. questions, Thank afternoon. please.

Business as you The Group relates XX%-plus International can sustain this first color you market that any of on such growth? a are type pressures Thank know business to cost in can become. big is interested question energy, quite think be very the areas you. etcetera? you you strong. question Can would And The whether And wages, that inflation if to was I any us general how of give second any on costs. seeing your

Vincent Chen

Okay.

Group, but for question margin disclose XX% margins don’t we – groups to the margin the of about all – for XX%. first So, in roughly of of International the the the EBITDA is business the Business margin our the amount range yet, from

range. this locally. a there around that it’s also because transformation see digital from an overseas and we are So, demand quite demand And there is is the we confident IDC

the be margin believe we So, sustainable. can

question For government the undertaken but about X raised X the have energy ago, basically, we face years ago. inflation, the months your cost so rate pressure or been saving initiative electricity pressures likely the we because from the years second three because do

the offset So, of the our energy from rising utility kind savings bills. operations

answer. So, my that’s

Neale Anderson

much. very you Thank Understood.

Vincent Chen

Thank you.

Operator

[Operator from from ahead Instructions] next please. question The is Go Wang Sara UBS. coming

Sara Wang

opportunity Thank for you asking to questions. this Hi.

only So, a I question. have quick very actually

quarter the am growth, quite I good net just income EBITDA third non-operating operating profit but flat. what year, items? gap we and both that in this is the on So, saw wondering see remained

Harrison Kuo

So, talking if – correctly, I you EPS understand Sara, so actually it basically, remains your about why flat, question right. is are

X%, actually to there EBITDA, right. of X% our growth right. X%, For X%, is Y-o-Y

that’s our, several non-operating have of, because we we So, invested business have investments of made sort in – because capital. venture

And bond same last market. because of our year, period the investments of the actually in some

adjustment. so because there there recorded So, correction, an have a valuation year, valuation gains. is this is But we for market

So, income. heavily affected that our non-operating

Sara Wang

Got clear. you. it. Thank That’s

Harrison Kuo

you. Thank

Operator

from question please. HSBC. Anderson, is coming Neale ahead The next Go

Neale Anderson

Thank trend, Could I you me another the for next XG ask that about year. uplift letting and you expect ask particularly one. how

Thank So, quite be XX%. Do XXXX? think can you into high, it’s that sustained you. still

Harrison Kuo

XG, right. For the

disclose will in information call. the early or in next results more basically, So February January we detailed

Neale Anderson

Okay. Thank you.

Operator

Go [Operator no further of turn back President, questions, over ahead will Kuo. I Q&A Instructions] are there As it End please. to

Harrison Kuo

Thank you for your participation. Bye-bye.

Operator

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

You Goodbye. may disconnect. now

Chunghwa Telecom (CHT) 1 Nov 222022 Q3 Earnings call transcript