Hkt Trust And Hkt Ltd · HKEX:6823
Hkt Trust And Hkt — H1 2024 Earnings Presentation
34 slides from Hkt Trust And Hkt's earnings presentation, Jul 25, 2024
Slide 1: 2024 Interim Results
2024 Interim Results For the six months ended 30 June 2024 25 July 2024 – 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 Overview
Business Overview Susanna Hui Group Managing Director
Slide 4: Resilient Performance Despite Challenging Economic Conditions
Resilient Performance Despite Challenging Economic Conditions Total Revenue Total EBITDA Adjusted Funds Flow 2,137 2% YoY 791 320 (US$ million) 2,011 (US$ million) 3% YoY (excluding Mobile Product Sales) 3% YoY 3% YoY (US$ million) 2024 Interim Distribution of Mobile Enterprise 32.92 HK cents Revenu
Slide 5: Differential Integrated Network Connectivity Inside and Out of Home
Differential Integrated Network Connectivity Inside and Out of Home to Enable Tailored, Dynamic Experiences Inside Home 2.5G/5G/10G/50G PON FTTH + WTTH + Wi-Fi 7 Household Usage Outside Home Requirement: Territory-wide 5G Coverage > 2Gbps 5
Slide 6: Inside Home: Combining Seamless Network Connectivity with Diverse Home Solutions
Inside Home: Combining Seamless Network Connectivity with Diverse Home Solutions to Innovate Personal and Professional Experiences First in Hong Kong to Launch 2.5G/5G/10G/50G PON Services & Complete Home Coverage with Wi-Fi Upgrade NEW 50G PON 2.5G / 5G / 10G Service 1G / 2G XGSPON Service Firs
Slide 7: Out of Home: Leveraging Seamless Network Connectivity
Out of Home: Leveraging Seamless Network Connectivity to Co-lead High-Impact Application Advancement in Targeted Private and Public Sectors Targeted Mobile Network Upgrades for High Traffic Areas Enhance indoor & outdoor coverage (+68 new sites) • Added 68 new sites for indoor and outdoor coverage e
Slide 8: Continued Growth of High Value, Loyal Mobile Customer Base
Continued Growth of High Value, Loyal Mobile Customer Base with Premium Network, Service and Quad-Play Offering Continued Growth in Post-paid Customer Base Post-paid Exit ARPU Uplift Despite Intense Competition From 5G and Roaming Recovery 3,433 3,383 192 189 3,305 + 50K YoY (’000) (HK$) H1'22 H1'23
Slide 9: Roaming Activity Returning to Normal
Roaming Activity Returning to Normal and Emerging Potential in Value-add Travel Services via HKT Ecosystem Recovery in Roaming Revenue Recovery in Roaming 98% of Pre-pandemic levels Inbound revenue 64% of Pre-pandemic levels Outbound revenue 104% of Pre-pandemic levels H1'19 H1'23 H1'24 • Witnessed
Slide 10: Continued 5G Adoption and Value Uplift
Continued 5G Adoption and Value Uplift Enabled by Diverse and Integrated Offerings 5G customers reached 1.571 million csl / 1O1O 5G ARPU exceeds 4G ARPU 5G Penetration representing 46% penetration of our post-paid base in June 2024 >55% by almost 40% 46% 41% 35% 1,571 32% 1,399 26% 1,194 5G 21% 1,06
Slide 11: Robust Demand for HKT Home Broadband Services
Robust Demand for HKT Home Broadband Services Stimulated by Our Differential, Comprehensive Offerings Continued Upgrades to FTTH with 2.5G Service Notching the Fastest Growth Further Consumer Broadband Net Adds 1,472 1,468 + 4K YoY 1,028 + 42K YoY 986 Stable Churn Over 50% of net adds Despite from e
Slide 12: Successful Broadcast and Monetisation of UEFA EURO 2024
Successful Broadcast and Monetisation of UEFA EURO 2024TM across All Platforms • Comprehensive live coverage of all 51 matches together with highlights and magazine programmes • Featured popular artists from MakerVille to drive casual football followers for subscription and awareness Direct-to-Consu
Slide 13: Refreshed Now Video Streaming Service
Refreshed Now Video Streaming Service – “Out of the Box” Solution Now Video Streaming Service Offers Seamless Viewing Experience Enlarged Customer Base • Convenience • Now OTT customer base up by 13% yoy • Flexibility of installation • Reflecting early success of the • Personalisation of Now TV cont
Slide 14: Enterprise Business – Healthy Pipeline Despite Market Headwinds
Enterprise Business – Healthy Pipeline Despite Market Headwinds Market Headwinds New Project Wins • SMEs are facing greater Total contract value of new project wins in H1’24 operating pressure > HK$2.5 billion (+27% YoY) • Retailers and F&B businesses are greatly impacted by the Industry-specific So
Slide 15: Elevated Empowerment of Healthcare Sector with Smart Technologies
Elevated Empowerment of Healthcare Sector with Smart Technologies on top of 5G and ICT Infrastructure 5G Hospitals ICT Infrastructure Smart Healthcare Applications 5G Integrated Telecommunications System ICT infrastructure contracts Autonomous Mobile Robot System (AMRS) for 2 additional large-scale
Slide 16: Digital Transformation across Diverse Industries
Digital Transformation across Diverse Industries and Focused Development of High Value, Industry-specific Solutions Mega size systems integration projects support Smart City development and industry transformation Digital Twin System for Operations Communication Systems Upgrade AI-powered Workplace
Slide 17: Integrated, Focused Solutions in Support of Emerging GBA and Overseas Expansion
Integrated, Focused Solutions in Support of Emerging GBA and Overseas Expansion Mainland China Business Achieved a Remarkable growth of 51% YoY Focused Industry Solutions HK Enterprise Expanding into GBA Macau Gaming Industry for Regional Expansion Partnering with HK and Global Enterprises to System
Slide 18: Enriching The Club Digital Ecosystem
Enriching The Club Digital Ecosystem The Club Membership New Collaborations 3.94 ▪ Establishment of rewards alliance 3.78 55% of The Club with regional telcos in Singapore, membership base is Thailand, Indonesia, the Philippines, non-HKT customers Australia and Taiwan to stimulate greater tourist sp
Slide 19: Empowering Merchant and Retail Customers
Empowering Merchant and Retail Customers Growing transactions with a solid base Comprehensive e-payment solution of young & tech-savvy users continues to generate value for local SMEs ▪ Accounts expanded to 3.8 million ▪ Launched POS App Solution in as of June 2024 July to enable SMEs to convert Con
Slide 20: Leading and Innovative HealthTech Platform
Leading and Innovative HealthTech Platform Increasing Engagement as Telemedicine Gains Acceptance Registered Users Doctors and healthcare 395K 200+ + 6% YoY professionals YoY Growth in completed Medical consultation + 12% 23 video consultations service partners Widened Medical Network DrGo Health St
Slide 21: Contributing to a Sustainable Future
Contributing to a Sustainable Future Reward Yourself, Recharge the City Recognition • Joined ViuTV, shopping malls as well as retail, • Shortlisted for The S&P Global F&B and entertainment businesses to encourage Sustainability Yearbook (China Edition) for the public to spend, support local merchant
Slide 22: H1'24 Highlights
H1’24 Highlights Premium Customer 1 Experience Smart, Integrated 4 The only service provider that can offer seamless, reliable, high-speed service Enterprise Solutions inside and out of the home to consumers Integrating the latest technologies such as 5G, robotics, cloud and AI to improve the custom
Slide 23: Financial Review
Financial Review Patrick Poon Chief Financial Officer
Slide 24: Resilient Financial Performance
Resilient Financial Performance (US$ million) H1’23 H1’24 % Change Adjusted Funds Flow 311 320 + 3% Revenue 2,103 2,137 + 2% Revenue (excluding Mobile Product Sales) 1,955 2,011 + 3% EBITDA 770 791 + 3% EBITDA Margin (excluding Mobile Product Sales) 39% 39% Overall EBITDA Margin 37% 37% Profit Attri
Slide 25: TSS Continued to Demonstrate Business Strength and Resilience
TSS Continued to Demonstrate Business Strength and Resilience TSS Business Local TSS Revenue 1,547 Total Revenue 1,498 + 3% YoY 1,046 1,063 Local TSS Revenue Local Data Total EBITDA ITS Revenue 541 551 + 7% YoY Total EBITDA + 2% YoY Other local TSS (US$ million) Broadband Network Broadband Local Dat
Slide 26: Mobile Benefiting from Full Recovery of Outbound Roaming and Deeper 5G Adoption
Mobile Benefiting from Full Recovery of Outbound Roaming and Deeper 5G Adoption Mobile Business Mobile Services Revenue 637 638 Total Revenue 489 512 Steady 468 295 Total EBITDA Revenue + 5% YoY 281 Roaming & IDD Local Core EBITDA (US$ million) (US$ million) H1’23 H1’24 EBITDA Margin 44% 46% H1’22 H
Slide 27: Continued Focus on Driving Operating Efficiencies
Continued Focus on Driving Operating Efficiencies OPERATING EXPENSES 271 • Opex savings of 5% in H1’24, with opex to 257 - 5% YoY 44 revenue ratio further improving to 12.1% 40 78 • Continued focus on operating efficiency and 76 TSS cost optimisation initiatives across all Mobile business segments O
Slide 28: Disciplined Capital Investments to Support Business Growth
Disciplined Capital Investments to Support Business Growth CAPEX 145 • Disciplined capital investments with capex to 141 - 3% YoY revenue ratio improving to 6.6%, well within 50 stated guidance 48 Mobile • Lower Mobile capex reflecting the efficiency TSS gains from capacity upgrades and network Othe
Slide 29: Adjusted Funds Flow
Adjusted Funds Flow YoY (US$ million) H1’23 H1’24 Better/(Worse) EBITDA 770 791 3% Less cash outflows in respect of capital expenditures, customer acquisition costs and licence fees: Capital expenditures (138) (133) Customer acquisition costs and licence fees (102) (92) Fulfilment costs (35) (37) Ri
Slide 30: Income Statement
Income Statement YoY (US$ million) H1’23 H1’24 Better/(Worse) Revenue 2,103 2,137 2% Revenue (excluding Mobile Product Sales) 1,955 2,011 3% Cost of sales (1,062) (1,089) (3)% Opex (271) (257) 5% EBITDA 770 791 3% Depreciation & amortisation expenses (346) (344) Gain on disposal of PPE, net — 1 Net
Slide 31: Solid Financial Position Investment Grade Credit Ratings
Solid Financial Position Investment Grade Credit Ratings As of Jun 2024 (US$ million) As of Dec 2023 As of Jun 2024 Proforma (4) BBB/Baa2 Gross Debt (1) 5,744 5,942 5,072 Investment Grade Rating Gross Debt to EBITDA (2) 3.34x 3.42x 2.92x Cash Balance (3) 219 214 214 Undrawn Facilities 1,632 1,537 1,
Slide 32: Debt Maturity Profile
Debt Maturity Profile Impact of Elevated Interest Rates Cushioned by Healthy Mix of Fixed & Floating Rate Debt As of 30 June 2024 Proceeds of US$870M from Bonds the sale of an interest in the Bank Loans passive network business will be used to repay the 1,089 (US$ million) US$500M bond due 2025 and
Slide 33: Debt Maturity Profile
Debt Maturity Profile Impact of Elevated Interest Rates Cushioned by Healthy Mix of Fixed & Floating Rate Debt As of 30 June 2024 Proforma * Bonds Bank Loans (US$ million) * Proceeds of US$870M from 719 the sale of an interest in the 1,484 passive network business will be used to repay the US$500M b
Slide 34: H1'24 Highlights
H1’24 Highlights Premium Customer 1 Experience Smart, Integrated 4 The only service provider that can offer seamless, reliable, high-speed service Enterprise Solutions inside and out of the home to consumers Integrating the latest technologies such as 5G, robotics, cloud and AI to improve the custom