Hkt Trust And Hkt Ltd · HKEX:6823
Hkt Trust And Hkt — H1 2023 Earnings Presentation
32 slides from Hkt Trust And Hkt's earnings presentation, Aug 2, 2023
Slide 1: 2023 Interim Results
2023 Interim Results For the six months ended 30 June 2023 2 August 2023 – Hong Kong
Slide 2: Forward Looking Statements
Forward Looking Statements This presentation may contain "forward-looking statements" that are not historical in nature. These forward-looking statements, which include, without limitation, statements regarding HKT’s future results of operations, financial condition or business prospects, are based
Slide 3: Business Review
Business Review Susanna Hui Group Managing Director
Slide 4: Resilient Business Amidst Continued Economic Headwinds
Resilient Business Amidst Continued Economic Headwinds Total Revenue Total EBITDA Adjusted Funds Flow 2,103 + 2% YoY 770 311 1,955 (US$ million) (US$ million) + 3% YoY (excluding Mobile Product Sales) + 3% YoY + 2.2% YoY (US$ million) Enterprise Mobile Services Revenue Revenue + 10% YoY + 5% YoY 202
Slide 5: Loyal Mobile Customer Base that Values Quality Service
Loyal Mobile Customer Base that Values Quality Service 3,383 + 78K YoY 3,263 3,305 1O1O Customers + 17K YoY Accelerated Growth in Post-paid Customer Base H1'22 H1'23 Despite Competition Continued expansion of (’000) our premium 1O1O H1'21 H1'22 H1'23 customer base 0.9% Post-paid Exit 187 189 Improve
Slide 6: Roaming Revenue Rebounds Following Border Reopening
Roaming Revenue Rebounds Following Border Reopening 63% of Pre-COVID Recovery in levels Roaming Revenue H1'19 H1'22 H1'23 Total roaming revenue in H1’23 more than doubled from H1’22, and reached 63% of pre-COVID levels In June 2023, both number of roamers and consumer outbound roaming revenue su
Slide 7: Deepening 5G Adoption
Deepening 5G Adoption csl / 1O1O 5G customers increased to 1.27 million, 5G Penetration PCM representing 38% penetration of our post-paid base >45% in July 2023 32% 35% 38% 21% 26% 5G 14% Penetration 8% to Total Post-paid 2% 1,270 1,194 Base 1,061 867 680 10 Prime HKT MNO 1 MNO 2 MNO 3 Locations at
Slide 8: Major Network Developments in H1'23
Major Network Developments in H1’23 Enhance Outdoor 5G Coverage Uplift Indoor 5G Coverage 700MHz 3.5GHz 4.9GHz Sha Tin Race Course Continue to improve indoor Cheung Sha Wan 5G coverage in F&B and chain Government office Inland Revenue Tower stores with LampSite technology Hong Kong Palace Museum H
Slide 9: HKT Connects Outlying Islands with Fibre Network
HKT Connects Outlying Islands with Fibre Network HKT has connected outlying islands (Lamma Island / Cheung Chau / Peng Chau) with newly built submarine cables Enabling 10G fibre services, with 4K Now TV channels Enhanced 5G mobile service coverage with 10G backhaul Peng Chau Lamma Island Subma
Slide 10: 2500M – The New Normal for HKT Broadband Service
2500M – The New Normal for HKT Broadband Service Ultra High Speed XGS PON Technology Multi-use Broadband Full Home Coverage 2.5G 5G 10G 1000M 5G Home 2 x 1000M 4 x 1000M (2500M) (5000M) (10000M) + FTTR Internet City-wide coverage and Symmetrical Dedicated downstream bandwidth With Fiber-to-the-Room
Slide 11: Robust Demand Continued for High-Speed, Reliable Home Broadband Services
Robust Demand Continued for High-Speed, Reliable Home Broadband Services Continued Upgrades 1,097 1,107 to FTTH 133 121 986 964 Encouraging Uptake “Broadband Telecom Company of the Year – Hong Kong” and of 2500M VDSL “Infrastructure Initiative of the Year (‘000) Upgrade Service FTTH – Hong Kong” awa
Slide 12: Smart HKT Home Solutions Further Enhance Quality of Living
Smart HKT Home Solutions Further Enhance Quality of Living Smart Living Home Solutions Smart Charge EV Home Charging Solutions Pre-installing Smart Living home solutions in new Smart Charge currently offers EV home charging residential properties solutions across 32 large-scale residential estat
Slide 13: Content Aggregator Now TV Strengthens Line-up with Latest Array of Sports & Entertainment
Content Aggregator Now TV Strengthens Line-up with Latest Array of Sports & Entertainment Enlarged Customer Base Home of Sports Continue to enrich the value of its unrivalled Captured new customer base from sports proposition market consolidation, particularly in the commercial segment Further
Slide 14: 5G Continues to Fuel Digital Transformation for Enterprises
5G Continues to Fuel Digital Transformation for Enterprises 5G Applications Expanding to More Industries and Customers 2022 2023 First in HK New Industry New Industry Smart Retail Smart Healthcare Smart Campus Smart Property Smart Construction 5G Private Network 5G Smart App and IoT to 5G Smart Prop
Slide 15: Integrated Solutions to Spur Growth in Enterprise Segment
Integrated Solutions to Spur Growth in Enterprise Segment Digital Transformation Solutions integrating Connectivity, Cloud Computing and Cybersecurity to AI-Powered Industry Solutions and Enterprise Managed Services Finance Insurance Retail Construction Healthcare Government HKT 2023 Interim Results
Slide 16: Increasing Digital Transformation Demand in GBA as Borders Reopen
Increasing Digital Transformation Demand in GBA as Borders Reopen Integrated Solutions and Enterprise Managed Services to capture opportunities in GBA China Business Achieved 21% YoY Growth with Strong Momentum • Companies expanding from HK to China • China-based companies going out to HK and beyond
Slide 17: AI-enabled, Personalised Digital Services to Club Members
AI-enabled, Personalised Digital Services to Club Members The Club’s Strategy: Focus on Lifestyle Spending with Breadth of Local & International Experience The Club Membership 3.78M 3.63M E-COMMERCE & FINTECH TRAVEL H1'22 H1'23 Lifestyle Spending on The Club HEALTHTECH Travel Insurance Shopping (exc
Slide 18: Scaling for Web 2.0, Ready for Web 3.0
Scaling for Web 2.0, Ready for Web 3.0 Financial Services continue steady growth for both B2B & B2C while strengthening its loyalty ecosystem HKT is selected as part of a consortium participating in HKMA’s e-HKD Pilot Programme Merchants Comprehensive e-payment solution Consumers Growing transac
Slide 19: Leading and Innovative MedTech Platform in Hong Kong
Leading and Innovative MedTech Platform in Hong Kong Increasing Consultations as Telemedicine Gains Acceptance Telemedicine With the pandemic having accelerated the popularisation of healthtech, market demand for DrGo telemedicine platform has maintained its steady growth 371K registered users a
Slide 20: Contribute to a Sustainable Future
Contribute to a Sustainable Future Community Impact Climate Change Resilience Strive and Rise Programme (共創明 Teen) – Support Sustainability-linked loans: development and upward mobility of underprivileged youth Committed about US$2.7 billion through corporate volunteering and activities, e.g. No
Slide 21: Highlights
Highlights 1 Unique Quad Play Experience – Only service provider that can offer voice, broadband, mobile and content to individuals, households, enterprises and government bodies 2 Customer-Centric Approach – Continue to invest in technologies, talent and customer support to provide innovative servi
Slide 22: Financial Review
Financial Review Patrick Poon Chief Financial Officer
Slide 23: Resilient Financial Performance
Resilient Financial Performance (US$ million) H1’22 H1’23 % Change Adjusted Funds Flow 305 311 + 2.2% Revenue 2,071 2,103 + 2% Revenue (excluding Mobile Product Sales) 1,906 1,955 + 3% EBITDA 748 770 + 3% EBITDA Margin (excluding Mobile Product Sales) 39% 39% Overall EBITDA Margin 36% 37% Profit 245
Slide 24: TSS Continued to Demonstrate Business Strength
TSS Continued to Demonstrate Business Strength TSS Business Local TSS Revenue 1,487 1,498 Total Revenue 1,046 + 1% YoY 1,022 Local TSS 1,046 Revenue 1,022 Other local TSS ITS Revenue 526 541 Total EBITDA + 3% YoY Broadband Network Total EBITDA 465 452 Local Data (US$ million) (US$ million) H1'22 H1'
Slide 25: Mobile Benefiting from Gradual Recovery in Roaming
Mobile Benefiting from Gradual Recovery in Roaming Mobile Business Mobile Services Revenue 633 637 Revenue 489 + 1% YoY 459 468 272 281 EBITDA Roaming & Revenue + 3% YoY IDD EBITDA Local Core (US$ million) (US$ million) H1'22 H1'23 H1'21 H1'22 H1'23 EBITDA Mobile Services Margin 43% 44% EBITDA Margi
Slide 26: Continued Focus on Driving Operating Efficiencies
Continued Focus on Driving Operating Efficiencies Operating Expenses Opex savings of 4% in H1’23, with opex to revenue ratio further improving to 12.9% 281 271 - 4% YoY 46 44 Sustained efficiency gains from mobile network operations including improved cell 82 78 site architecture enabling networ
Slide 27: Disciplined Capital Investments to Support Business Growth
Disciplined Capital Investments to Support Business Growth Capex Disciplined capital investments with capex to revenue ratio improving to 152 6.9%, well within stated guidance 145 - 4% YoY Lower Mobile capex reflecting the 56 50 completion of our territory-wide 5G coverage rollout in 2022, with
Slide 28: Adjusted Funds Flow
Adjusted Funds Flow (US$ million) H1’22 H1’23 YoY Better/ (Worse) EBITDA 748 770 3% Less cash outflows in respect of capital expenditures, customer acquisition costs and licence fees: Capital expenditures (146) (138) Customer acquisition costs and licence fees (76) (102) Fulfilment costs (40) (35) R
Slide 29: Income Statement
Income Statement (US$ million) H1’22 H1’23 YoY Better/(Worse) Revenue 2,071 2,103 2% Revenue (excluding Mobile Product Sales) 1,906 1,955 3% Cost of sales (1,042) (1,062) (2)% Opex (281) (271) 4% EBITDA 748 770 3% Depreciation & amortisation expenses (362) (346) Net other gains — 1 Net finance costs
Slide 30: Solid Financial Position, Investment Grade Credit Ratings
Solid Financial Position Investment Grade Credit Ratings (US$ million) As of Dec 2022 As of Jun 2023 Gross Debt (1) 5,664 5,784 BBB/Baa2 Investment Gross Debt to EBITDA (2) 3.38x 3.41x Grade Rating Cash Balance (3) 271 244 Undrawn Facilities 1,854 1,387 Total 2,125 1,631 (1) Gross debt refers to the
Slide 31: Debt Maturity Profile
Debt Maturity Profile Impact of Interest Rate Hike Cushioned by Healthy Mix of Fixed & Floating Rate Debt As of 30 June 2023 Bank Loans 954 580 Bonds (US$ million) 851 750 650 128 500 500 351 300 213 2023 2024 2025 2026 2027 2028 2029 2030 2032 Current mix of fixed and floating rate debt approx. 5
Slide 32: Highlights
Highlights 1 Unique Quad Play Experience – Only service provider that can offer voice, broadband, mobile and content to individuals, households, enterprises and government bodies 2 Customer-Centric Approach – Continue to invest in technologies, talent and customer support to provide innovative servi