Chunghwa’s Q2 profit falls slightly as mobile revenue drops 7% - Mobile World Live

Chunghwa’s Q2 profit falls slightly as mobile revenue drops 7%

01 AUG 2016

Taiwan’s largest operator Chunghwa Telecom posted weak results for Q2, with both profit and revenue in the April-June period falling slightly, and a rise in mobile internet revenue unable to offset a fall in mobile turnover.

Net income fell 0.7 per cent to TWD11.06 billion ($342 million), while EBITDA decreased 2.8 per cent to TWD21 billion. Its EBITDA margin edged down to 37.35 per cent from 37.95 per cent a year ago.

Overall revenue decreased 1.3 per cent to TWD56.20 billion, with mobile service revenue dropping 7.1 per cent to TWD26.48 billion, despite mobile internet revenue expanding 6.6 per cent year-on-year, as its 4G subscriber base grew to 5.7 million as of the end of June.

The operator, with a 32 per cent market share, said the revenue decline was mainly due to the continued drop of equipment sales (falling 19.8 per cent) and mobile voice revenues (down nearly 10 per cent) because of VoIP substitution and market competition. Mobile accounted for 47 per cent of service revenue.

Mobile value-added services (VAS) revenue increased by 5 per cent to TWD10.35 billion, with mobile internet revenue the largest contributor to VAS revenue.

Internet revenue increased by 5.5 per cent to TWD6.83 billion, which was primarily attributed to higher data revenue and application VAS revenue.

Total operating expenses fell 0.9 per cent to TWD43.3 billion due to lower costs of goods sold and depreciation costs, but were offset partly by an increase in ICT project expenses.

Its mobile subscriber base rose 2.5 per cent to 10.9 million, with 4G users rising to 53 per cent of the total. The company also had 6.43 million mobile internet subscribers, representing 16 per cent year-on-year growth.

Rick Tsai, chairman and CEO of Chunghwa Telecom, said: “Our continued focus on streamlining our expansion efforts, operations and expense controls enabled us to outperform our guidance for operating income, net income and EPS during the second quarter of 2016.”

Capex for the quarter decreased by 28.3 per cent to TWD3.43 billion, with mobile accounting for 40 per cent of the total.


Joseph Waring

Joseph Waring joins Mobile World Live as the Asia editor for its new Asia channel. Before joining the GSMA, Joseph was group editor for Telecom Asia for more than ten years. In addition to writing features, news and blogs, he...

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