Chunghwa Telecom Co., Ltd · TWSE:2412
Chunghwa Telecom — Q1 2009 Earnings Presentation
27 slides from Chunghwa Telecom's earnings presentation, Apr 29, 2009
Slide 1: 1Q 2009 Operating Results
1Q 2009 Operating Results April 29, 2009
Slide 2: Disclaimer
Disclaimer Note Concerning Forward-looking Statements This press release contains forward-looking statements. These statements constitute “forward-looking” statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934,
Slide 3: Dividend Payout: Committed to a Strong Dividend Policy
Dividend Payout Committed to a Strong Dividend Policy Dividend Yield Capital Management Dividend Yield 6 7.7% 7.4% 7.4% 8% • The board approved the 7% 3rd round of capital reductions in Apr 2009 5 6% 4 5.8% 5% Cash (NT$) • Cumulative cash returns Yield 3 4% 2 3% of NT$28.8bn to 2% shareholders in th
Slide 4: Financials Overview
Financials Overview
Slide 5: Financials: Income Statement
Financials: Income Statement ROC GAAP (Consolidated) (NT$bn) 2007 2008 Growth Rate Q1 2008 Q1 2009 Growth Rate Revenue 197.39 201.67 2.2% 50.96 49.12 (3.6 %) EBITDA 100.16 96.74 (3.4%) 26.14 23.36 (10.7 %) Operating Profit 60.35 58.57 (3.0%) 16.43 14.13 (14.0 %) Net Income 48.25 45.01 (6.7%) 10.72 1
Slide 6: Financials: Costs & Expenses
Financials: Costs & Expenses ROC GAAP (Consolidated) (NT$bn) 2007 2008 Growth Rate Q1 2008 Q1 2009 Growth Rate Operating Costs 106.65 113.55 6.5% 28.18 28.15 (0.1%) Operating Expenses 30.39 29.55 (2.8%) 6.35 6.84 7.72% Marketing 23.73 22.73 (4.2%) 4.73 5.13 8.4% General and 3.42 3.68 7.5% 0.89 0.95
Slide 7: Financials: Business Segment Revenues
Financials: Business Segment Revenues ROC GAAP (Consolidated) (NT$bn) 2007 2008 Growth Rate Q1 2008 Q1 2009 Growth Rate Internet & Data 49.23 50.05 1.7% 12.53 12.47 (0.5%) Mobile 73.67 72.30 (1.9%) 18.13 17.57 (3.1%) Fixed line 59.10 57.08 (3.4%) 14.41 13.13 (8.9%) Local 35.75 34.55 (3.3%) 8.64 8.11
Slide 8: Financials: Cash Flow
Financials: Cash Flow ROC GAAP (Consolidated) Jan-Dec Jan-Dec (NT$bn) Growth Rate Q1 2008 Q1 2009 Growth Rate 2007 2008 Net Cash Flow from 88.96 91.87 3.3% 18.59 16.05 (13.6%) Operating Activities CAPEX (25.07) (30.12) 20.1% (5.46) (4.70) (13.8%) Free Cash Flow 63.89 61.75 (3.4%) 13.13 11.35 (13.6%)
Slide 9: Effective and Efficient Capital Expenditures
Effective and Efficient Capital Expenditures Capital Expenditure (NT$bn) 35 • Capex spending will remain 30.1 30 27.7 between NT$30bn and NT$32bn 25.1 over the next 2 to 3 years 25 • Future investments continue to Capex (NT$bn) 20 focus on core businesses and on 15 migrating mobile and data 10 custo
Slide 10: 2009 Forecast
2009 Forecast ROC GAAP (Parent Company Only) Growth (NT$bn) Q1 2009 Q2 2009E Rate Q2 2008 Q2 2009E Growth Rate Revenue 45.21 45.60 0.9% 46.64 45.60 (2.2%) EBITDA 22.93 22.98 0.2% 25.01 22.98 (8.1%) Operating Profit 13.77 13.82 0.4% 15.53 13.82 (11.0%) Net Income 10.79 10.79 0.1% 12.51 10.79 (13.8%)
Slide 11: Business Overview
Business Overview
Slide 12: Chunghwa Telecom Overview
Chunghwa Telecom Overview Market Leader in Mobile Communication, Internet & Data and Fixed-line Services Integrated Services Provider Revenue Breakdown with Dominant Market Positions • Mobile Mobile 35.8% – #1 Mobile subscribers – 35.1% market share(b) (8.98 mm subs) – #1 Mobile revenue (a) Other 12
Slide 13: Taiwan's Leading Internet and Data Provider
Taiwan’s Leading Internet and Data Provider Broadband Subscribers Strategies Thousand • Migrate ADSL subs to FTTx to offer 4,252 4,284 4,305 4,322 4,311 4,310 quality network service and 15.1% 18.2% increase revenue 12.6% 21.9% 24.8% 27.7% • Retain lower speed subs through 16.2% 14.8% 14.0% competit
Slide 14: Increasing Access Speeds and Fiber Deployment
Increasing Access Speeds and Fiber Deployment Expanding FTTx Fiber SubscriptionsOfferings at the Speed of Light Rising Average Bandwidth Per User Well-received Broadband Services Mbps 5 4.33 4.49 4 • Transitioning subscribers to higher 3 2.56 2.66 access speeds and expanded 2 1.60 2.14 bandwidth 1 0
Slide 15: Number One Mobile Provider
Number One Mobile Provider Mobile Subscribers Strategies • Focus on mobile VAS – Increase smart phone subs with Thousand mPro packages 8,870 8,947 8,978 9,000 8,656 8,699 8,724 8,779 – Grow data card subs base 1,993 2,291 2,588 2,894 3,240 3,562 • Continue migrating 2G subs to 7,000 3853 3G – 3.85 m
Slide 16: Mobile VAS Promotional Initiatives
Mobile VAS Promotional Initiatives 1Q09 Data Revenue: 11.7% of Mobile Revenue Successful Mobile VAS Rollout Mobile Internet Subscriptions • Successful “emome” VAS platform • Mobile internet service subs: 108.7% continuing to generate growth YoY growth – Total VAS grew by 18.5% YoY as of 1Q’09 • Expe
Slide 17: New Mobile Devices Driving Network Usage
New Mobile Devices Driving Network Usage • Providing world-class devices to enhance user experiences and build loyalty – Ex: iPhone 3G, HTC Diamond, Samsung i908 • Performance of iPhone 3G services* (launched on Dec 13, 2008) – New growth catalyst (iPhone subscriptions over the period) – 25% of iPho
Slide 18: Meeting Customer Demand for Convergence
Meeting Customer Demand for Convergence MOD/IPTV Subscribers Cross-Platform Solutions Thousand • Conduct cross-platform service operation, 800 marketing and advertising 676 686 700 • Provide integrated bill for multiple services 591 600 • Supply debit cards for services 508 57.7% 500 435 • Improve c
Slide 19: Regulation
Regulation
Slide 20: Regulatory Update
Regulatory Update • The 3rd year tariff reduction of a three-year plan Mobile(2G) Tariff Fixed to Mobile Calls: 4.886% Prepaid: 4.958% Regulations Package with highest rate: 4.887% ADSL ADSL access: 5.35% • The ISPs avoid the risk of legal problems over the questionable content by following the Copy
Slide 21: Outlook
Outlook
Slide 22: Green Initiatives
Green Initiatives • CHT’s carbon footprint calculation: – CHT represented 0.3% of total carbon emission in the country in ‘07 – Awarded the ISO14064-1 certification by SGS in Dec ‘08 – Emission of greenhouse gases in 2013 is expected to fall back to the level in 2008 due to the company’s energy savi
Slide 23: Q&A
Q&A
Slide 24: Appendix
Appendix
Slide 25: Network Convergence
Network Convergence Traditional Next Generation Network (NGN) Networks Application Layer 3rd party PSTN OSP AP AP (Open Service Platform) Control Plane and Data Plane PLMN (IMS) IP Network Layer /Transport Layer /Access Layer INTERNET Seamless Roaming © 2009 Chunghwa Telecom 24
Slide 26: Continuing Broadband Network Construction
Continuing Broadband Network Construction Fiber Deployment Plan Thousands Port Coverage FTTH 10,000 FTTN/FTTB 83% 90% • FTTx access expected to ADSL Coverage 78.2% 81.7% exceed ADSL access by year 9,000 71% 77% 531 831 1131 1431 80% 2011 8,000 171 70% • FTTx coverage expected to 11 7,000 8 58.3% 2,9
Slide 27: New Opportunities via NGN
New Opportunities via NGN HomeMarket Home Market PersonalMarket Personal Market EnterpriseMarket Enterprise Market • Entertainment • Video Phone • M-Office • Surveillance • M-commerce • FMC • Health Care • Location Based • IP-VPN • Information Services • IP Centrex/IP PBX • Education • Social Networ