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CHT(CHT) - 2021 Q2 - Earnings Call Transcript
CHTCHT(US:CHT)2021-08-01 10:48

Financial Data and Key Metrics Changes - Total revenues increased by 3.8% year-over-year in Q2 2021, driven by higher handset sales, mobile service revenue, and fixed broadband revenue [14][15] - Operating costs and expenses rose by 3.2% year-over-year, primarily due to increased depreciation, amortization, and marketing expenses [15][16] - Net income increased by 4.1%, and EBITDA margin improved to 41.9% from 40.5% in the same period of 2020 [14][15] Business Line Data and Key Metrics Changes - Mobile business maintained a revenue market share of 48.8% and a subscriber market share of 36% [8] - Postpaid ARPU turned positive year-over-year, with customers adopting 5G services contributing an average uplift of 21% to their monthly fees [5][6] - Broadband ARPU increased by 3% year-over-year, with a 52% year-over-year increase in subscribers migrating to higher-speed services [9][10] Market Data and Key Metrics Changes - The number of 5G sign-ups exceeded 1 million by the end of Q2 2021, with expectations to reach 2 million by year-end [5] - Demand for fixed broadband services surged due to COVID-19, resulting in positive net adds for subscribers year-over-year [6][7] - The number of home Wi-Fi devices increased by 650% year-over-year, reflecting the rise in home-centric applications [7] Company Strategy and Development Direction - The company aims to maintain its leading position in Taiwan's mobile market by enhancing 5G services and expanding its base station deployment to approximately 12,000 by year-end [6][8] - Continued investment in ICT and cloud services, with ICT project revenue increasing by 10% year-over-year [12][13] - Focus on integrating video services with fixed broadband and 5G to drive home-centric business performance [12] Management Comments on Operating Environment and Future Outlook - Management expressed confidence in maintaining revenue generation streams despite potential turbulence in the second half of the year due to the pandemic [25][26] - The company plans to keep its full-year revenue and profit guidance conservative due to ongoing uncertainties [26] - Management anticipates continued growth momentum in 5G revenue and mobile services [35] Other Important Information - Cash flows from operating activities increased by 36.1% year-over-year, attributed to improved collection of accounts receivable [16] - The company budgeted $43.1 billion in CapEx for 2021, focusing on 5G network construction and related infrastructure [17] Q&A Session Summary Question: 5G base station target increase - Management confirmed the target for 5G base stations has been increased from 10,000 to approximately 12,000 by year-end due to accelerated construction [20][21][23] Question: Outlook for Q3 and Q4 - Management expects to maintain revenue momentum in the second half of the year despite pandemic challenges [25] Question: Changes in full-year revenue or profit guidance - Management maintains its full-year revenue and profit guidance, remaining conservative due to pandemic uncertainties [26] Question: CapEx structure with increased 5G base station target - Management clarified that while the number of base stations increased, the CapEx budget remains unchanged due to lower equipment costs and more efficient deployment [26] Question: ICT revenue growth outlook - Management indicated that ICT revenue is expected to grow, with contributions increasing in the coming years despite a lower percentage this year due to large projects last year [28][29]