电讯盈科(00008) - 2023 - 中期业绩

Performance Highlights and Management Review Performance Highlights In H1 2023, the Group's overall EBITDA increased by 2% to HK$5.631 billion, primarily driven by strong performance from HKT and OTT businesses, despite an expanded loss attributable to equity holders 2023 H1 Key Performance Indicators | Indicator | H1 2023 | Year-on-Year Change | | :--- | :--- | :--- | | Consolidated EBITDA | HK$5.631 billion | +2% | | HKT EBITDA | HK$6.009 billion | +3% | | OTT Business EBITDA | HK$165 million | >800% (over nine times) | | Free TV and Related Business Revenue | HK$390 million | +1% | | Free TV and Related Business EBITDA | HK$83 million | +5% | | Loss Attributable to Equity Holders | HK$486 million | - | | Interim Dividend | HK$9.77 cents per share | - | - The company established a strategic partnership with CANAL+, which will invest a total of US$300 million to accelerate Viu's business development[3][4] Management Review Management notes solid operating performance in H1 2023 for media and telecom businesses amid Hong Kong's economic recovery, with strong growth in OTT and Free TV, and steady performance in HKT Group Overall Financial Performance (H1 2023) | Indicator | Amount (HKD) | Year-on-Year Change | | :--- | :--- | :--- | | Consolidated Revenue | HK$16.85 billion | +1% | | Consolidated EBITDA | HK$5.631 billion | +2% | | Loss Attributable to Equity Holders | HK$486 million | - | | Interim Dividend | HK$9.77 cents per share | - | - OTT business (Viu) performed exceptionally well, with revenue growing 24% to HK$971 million and EBITDA reaching HK$165 million, over nine times that of the same period last year, primarily driven by growth in monthly active users (+8%) and paying users (+21%)[4] - HKT business total revenue increased by 2%, or 3% excluding mobile product sales, primarily benefiting from enterprise digital transformation projects, demand for fiber services, recovery in roaming revenue, and 5G service adoption[4] Segmental Business Financial Review Overall Financial Overview In H1 2023, the Group's consolidated revenue grew 1% to HK$16.85 billion and EBITDA increased 2% to HK$5.631 billion, driven by OTT and HKT, but a 60% surge in finance costs led to a 33% drop in profit before tax and an expanded loss attributable to equity holders Revenue and EBITDA by Business Segment (Six Months Ended June 30, 2023) | Business Segment | Revenue (HK$ Million) | Revenue Year-on-Year Change | EBITDA (HK$ Million) | EBITDA Year-on-Year Change | | :--- | :--- | :--- | :--- | :--- | | HKT | 16,400 | +2% | 6,009 | +3% | | OTT Business | 971 | +24% | 165 | >800% | | Free TV and Related Businesses | 390 | +1% | 83 | +5% | | Other Businesses | 369 | (8)% | (294) | (3)% | | Consolidated | 16,850 | +1% | 5,631 | +2% | - Finance costs significantly increased by 60% year-on-year to HK$1.153 billion, which is one of the main reasons for the pressure on the Group's profitability and the recorded loss[7] Hong Kong Telecommunications (HKT) HKT achieved steady growth in H1 2023, with total revenue up 2% to HK$16.4 billion and EBITDA up 3% to HK$6.009 billion, primarily driven by mobile communication services and local data business HKT Key Financial Data (H1 2023) | Indicator | Amount (HK$ Million) | Year-on-Year Change | | :--- | :--- | :--- | | Total Revenue | 16,400 | +2% | | EBITDA | 6,009 | +3% | | Mobile Communication Service Revenue | 3,815 | +5% | | Adjusted Funds Flow | 2,429 | +2% | - Roaming business significantly recovered, with total roaming revenue in H1 2023 surging by 166% year-on-year, and outbound roaming revenue in June recovering to 80% of pre-pandemic levels[10] - The 5G service customer base continued to expand, reaching nearly 1.2 million as of June 30, 2023, accounting for 35% of total postpaid customers[10] OTT Business The OTT business performed exceptionally well in H1 2023, with revenue significantly increasing by 24% to HK$971 million and EBITDA soaring over 8 times to HK$165 million, driven by strong user growth in Viu video streaming service Viu Operating Indicators (As of June 30, 2023) | Indicator | Quantity | Year-on-Year Change | | :--- | :--- | :--- | | Monthly Active Users (MAU) | 65.5 million | +8% | | Paying Users | 11 million | +21% | - Viu Original content received widespread acclaim, for example, the Korean drama "Taxi Driver 2" topped Viu's market viewership for nine consecutive weeks, driving audience engagement[13] - The strategic partnership with CANAL+ will bring US$300 million in investment to Viu, aiming to accelerate its global market expansion and content creation capabilities[13] Free TV and Related Businesses Free TV and related businesses remained stable in H1 2023, with revenue slightly increasing by 1% to HK$390 million and EBITDA growing 5% to HK$83 million, driven by stable advertising and effective cost control Free TV and Related Businesses Financial Performance (H1 2023) | Indicator | Amount (HK$ Million) | Year-on-Year Change | | :--- | :--- | :--- | | Revenue | 390 | +1% | | EBITDA | 83 | +5% | - Business growth was driven by stable advertising revenue, as well as artist management and event revenue from the increased film, music, and endorsement opportunities for its artists[14] - ViuTV focused on enhancing digital engagement, with registered digital members increasing by 14% year-on-year to over 3 million[15] Other Businesses and Elimination Items Other businesses, primarily enterprise solutions and corporate support services, recorded HK$369 million in revenue and HK$294 million in EBITDA cost, while elimination items reflect inter-segment transactions - Other businesses recorded revenue of HK$369 million and EBITDA cost of HK$294 million in H1 2023[16] - Elimination items reflecting inter-group transactions amounted to HK$1.28 billion[17] Consolidated Financial Analysis Cost Analysis In H1 2023, the Group's cost of sales increased by 2% to HK$8.292 billion, while operating costs before depreciation and amortization decreased by 5% to HK$2.927 billion due to HKT's cost control, though depreciation and amortization rose 3% to HK$3.807 billion from media content investments - HKT's operating cost savings of 4% were primarily due to digitalization of business processes and optimization of sales channels, leading to a reduction in the Group's overall operating cost to revenue ratio from 18% to 17%[19] - Content-related amortization expenses increased from HK$738 million in the same period last year to HK$1.019 billion, primarily due to media businesses' investment in content libraries[19] Profitability Analysis Despite a 2% increase in consolidated EBITDA to HK$5.631 billion, the Group's profitability faced significant pressure due to a 60% surge in finance costs, resulting in a loss attributable to equity holders of HK$486 million from continuing operations - Consolidated EBITDA increased by 2% to HK$5.631 billion, with the margin improving from 32.9% to 33.4%, reflecting improved operating efficiency at HKT and better profitability in the OTT business[20] - Net finance costs increased by 57% from HK$678 million in the same period last year to HK$1.066 billion, primarily due to rising HIBOR[21] - For the six months ended June 30, 2023, loss attributable to equity holders from continuing operations was HK$486 million[26] Liquidity, Capital Resources, and Risk Management Liquidity and Capital Structure As of June 30, 2023, the Group maintained ample liquidity with HK$20.719 billion in unutilized bank credit facilities, despite total debt of HK$51.597 billion and a debt-to-asset ratio of 56% Capital Structure Overview (As of June 30, 2023) | Indicator | Amount (HKD) | | :--- | :--- | | Total Debt | HK$51.597 billion | | Cash and Short-term Deposits | HK$2.563 billion | | Unutilized Bank Credit Facilities | HK$20.719 billion | - Subsidiaries CAS Holding No. 1 Limited and Hong Kong Telecommunications (HKT) Limited both maintained investment-grade credit ratings[27] Capital Expenditure In H1 2023, the Group's capital expenditure slightly decreased to HK$1.141 billion, with HKT accounting for approximately 99%, reflecting the completion of the large-scale 5G network rollout and a shift towards capacity and indoor coverage enhancements - The Group's capital expenditure was HK$1.141 billion, a decrease from HK$1.199 billion in the same period last year, with the capital expenditure to revenue ratio at 6.8%[28] Risk Management and Hedging The Group actively manages foreign currency and interest rate risks without speculative derivatives, benefiting from natural hedging for most transactions and utilizing forward and swap contracts for foreign currency financing - The Group's business is not significantly exposed to risks from foreign exchange fluctuations, primarily due to natural hedging[29] - The Group uses forward and swap contracts to manage exchange rate and interest rate risks arising from foreign currency financing[30] Shareholder Returns and Corporate Governance Interim Dividend The Board declared an interim dividend of HK$9.77 cents per ordinary share for the six months ended June 30, 2023, to be paid on or about September 6, 2023 2023 Interim Dividend Details | Item | Content | | :--- | :--- | | Interim Dividend | HK$9.77 cents per ordinary share | | Record Date | August 22, 2023 | | Payment Date | On or about September 6, 2023 | Human Resources As of June 30, 2023, the Group employed over 16,200 employees globally across 25 countries and cities, with approximately 66% based in Hong Kong, supported by performance bonus and incentive schemes - As of June 30, 2023, the Group's total global employees exceeded 16,200[32] Corporate Governance and Compliance The Audit Committee reviewed the unaudited interim financial information, confirming the company's compliance with the Corporate Governance Code and no purchases, sales, or redemptions of its listed securities during the reporting period - For the six months ended June 30, 2023, the company consistently applied and complied with the principles and all applicable code provisions of the Corporate Governance Code[36] - During the period, neither the company nor any of its subsidiaries purchased, sold, or redeemed any of the company's listed securities[35] Condensed Consolidated Interim Financial Statements Consolidated Income Statement For the six months ended June 30, 2023, the Group recorded a 1% revenue increase to HK$16.85 billion, but rising finance costs led to a 33% decrease in profit before tax and a loss attributable to equity holders of HK$486 million Consolidated Income Statement Summary (Six Months Ended June 30, 2023) | Item (HK$ Million) | H1 2023 | H1 2022 (Restated) | | :--- | :--- | :--- | | Revenue | 16,850 | 16,738 | | Profit Before Tax | 874 | 1,299 | | Profit for the Period | 512 | 825 | | Loss Attributable to Equity Holders of the Company | (486) | (194) | | Basic Loss Per Share | (6.29) cents | (2.51) cents | Consolidated Statement of Financial Position As of June 30, 2023, the Group's total assets were HK$91.826 billion, total liabilities HK$81.045 billion, and total equity HK$10.781 billion, with current liabilities exceeding current assets by HK$4.786 billion Consolidated Statement of Financial Position Summary (As of June 30, 2023) | Item (HK$ Million) | June 30, 2023 | December 31, 2022 | | :--- | :--- | :--- | | Non-current Assets | 78,339 | 78,018 | | Current Assets | 13,487 | 17,046 | | Total Assets | 91,826 | 95,064 | | Current Liabilities | (18,273) | (24,374) | | Non-current Liabilities | (62,772) | (57,925) | | Total Liabilities | (81,045) | (82,299) | | Total Equity | 10,781 | 12,765 | | Equity Attributable to Equity Holders of the Company | 3,803 | 5,554 | Notes to the Financial Statements The notes provide detailed explanations of accounting policies, business segments, discontinued operations, dividends, and receivables, highlighting management's going concern assessment despite net current liabilities Basis of Preparation and Going Concern The financial information is prepared in accordance with HKAS 34, with management affirming the going concern basis despite current liabilities exceeding current assets by HK$4.786 billion, supported by operating cash flows and unutilized credit facilities - As of June 30, 2023, the Group's current liabilities exceeded its current assets by HK$4.786 billion[46] - Management believes that based on the Group's operating cash flows, refinancing capabilities, and HK$20.719 billion in unutilized credit facilities, preparing the financial information on a going concern basis is appropriate[46] Segment Information The Group's operations are assessed by product, comprising HKT, Media Business (OTT and Free TV), and Other Businesses, with HKT contributing the majority of revenue and EBITDA, and Media Business showing the highest EBITDA growth in H1 2023 Revenue and EBITDA by Business Segment (H1 2023) | Business Segment (HK$ Million) | Total Revenue | EBITDA | | :--- | :--- | :--- | | HKT | 16,400 | 6,009 | | Media Business | 1,361 | 248 | | Other Businesses | 369 | (294) | | Elimination Items | (1,280) | (332) | | Consolidated | 16,850 | 5,631 | Dividends The Board declared a 2023 interim dividend of HK$9.77 cents per share, totaling approximately HK$756 million, in addition to the HK$2.201 billion final dividend for 2022 paid during the reporting period Dividend Details (HK$ Million) | Item | Amount | | :--- | :--- | | Declared 2023 Interim Dividend | 756 | | Paid 2022 Final Dividend | 2,201 |