Chunghwa Telecom Announces First Quarter 2010 Guidance
TAIPEI, Taiwan, Feb. 9 /PRNewswire-Asia-FirstCall/ -- Chunghwa Telecom Co., Ltd. ("CHT" or "the Company", TAIEX: 2412; NYSE: CHT) today announced its parent-company only guidance for the first quarter 2010. Based on the current estimates, for the first quarter 2010, revenue is expected to be NT$45.46 billion, income before income tax is expected to be NT$13.94 billion and EPS is expected to be NT$1.17.
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(NT billions except 1Q10E 4Q09 1Q09A %changes
EPS) unaudited QoQ YoY
Revenue 45.46 47.44 45.21 (4.2) 0.6
Gross profit 21.43 21.47 21.45 (0.2) (0.1)
Operating Expenses 7.76 8.46 7.68 (8.3) 1.0
Operating Income 13.67 13.01 13.77 5.1 (0.7)
Income before income
tax 13.94 13.27 14.02 5.0 (0.6)
Income after income tax 11.29 10.54 10.79 7.1 4.6
EPS after tax 1.17 1.09 1.11 7.3 5.4
EBITDA 22.45 21.88 22.93 2.6 (2.1)
EBITDA Margin% 49.38 46.12 50.72 7.1 (2.6)
Acquisition of
property, plant
and equipment,
long-term
investments 5.57 8.21 4.47 (32.2) 24.6
Disposal of property,
plant and equipment,
long-term
investments -- -- -- -- --
As compared to the same period last year, first quarter 2010 revenue is expected to increase by NT$0.25 billion to NT45.46 billion, equivalent to 0.6% increase year over year. This increase is mainly attributed to the increase of fiber, value-added services as well as ICT services including IDC, cloud computing and green technology, under the current tariff condition imposed by National Communications Commission (NCC). However, it is important to note that the new NCC tariff reduction plan to be initiated starting April 1, 2010, may cause some revenue pressure for the remainder of fiscal year 2010. Operating costs and expenses for the first quarter 2010 are expected to increase by NT$0.35 billion, equivalent to 1.1%. This increase is primarily due to anticipated higher marketing expense. Income before tax for the first quarter 2010 is expected to be NT$13.94 billion, a decrease of 0.6% compared to NT$14.02 billion for the same period last year. Income after tax for the first quarter 2010 is expected to increase by NT$0.5 billion, representing 4.6%, to NT$11.29 billion as compared to NT$10.79 billion for the same period last year. This increase is mainly because of income tax reduction. As a result, EPS is expected to be NT$1.17, representing an increase of 5.4% as compared to NT$1.11 for the same period in 2009.
On sequential basis, first quarter 2010 revenue is expected to be NT$45.46 billion, representing a decrease of 4.2% compared to that of fourth quarter 2009. This is primarily because in the fourth quarter 2009, Chunghwa completed several corporate customer projects resulting in a relatively higher revenue base for the fourth quarter 2009. Operating costs and expenses for the first quarter 2010 are expected to decrease by NT$2.64 billion, equivalent to 7.7% quarter over quarter to NT$31.79 billion. This is mainly because the costs associated with the corporate customer projects were relatively high for the fourth quarter 2009. Income before tax for the first quarter 2010 is expected to increase by 5% sequentially to NT$13.94 billion as compared to NT$13.27 billion for the fourth quarter 2009. Income after tax for the first quarter 2010 is expected to be NT$11.29 billion, representing a 7.1% increase as compared to NT$10.54 billion for the fourth quarter 2009, mainly due to income tax reduction. As a result, EPS is expected to increase by 7.3% sequentially to NT$1.17 as compared to NT$1.09 for the fourth quarter 2009.
About Chunghwa Telecom
Chunghwa Telecom (TAIEX 2412, NYSE: CHT) is the leading telecom service provider in Taiwan. Chunghwa Telecom provides fixed-line, mobile and Internet and data services to residential and business customers in Taiwan.
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, as amended, and as defined in the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as "will," "expects," "anticipates," "future," "intends," "plans," "believes," "estimates" and similar statements. Chunghwa may also make written or oral forward-looking statements in its periodic reports to the U.S. Securities and Exchange Commission on forms 20-F and 6-K., in its annual report to shareholders, in press releases and other written materials and in oral statements made by its officers, directors or employees to third parties. Statements that are not historical facts, including statements about Chunghwa's beliefs and expectations, are forward- looking statements. Forward-looking statements involve inherent risks and uncertainties that could cause actual results to differ materially from the forward-looking statements. A number of important factors could cause actual results to differ materially from those contained in any forward-looking statement. Investors are cautioned that actual events and results could differ materially from those statements as a result of a number of factors including, but not limited to: extensive regulation of telecom industry; the intensely competitive telecom industry; our relationship with our labor union; general economic and political conditions, including those related to the telecom industry; possible disruptions in commercial activities caused by natural and human induced events and disasters, including terrorist activity, armed conflict and highly contagious diseases, such as SARS; and those risks outlined in Chunghwa's filings with the U.S. Securities and Exchange Commission, including its registration statements on Form F-1, F-3, F-6 and 20-F, in each case as amended. Chunghwa does not undertake any obligation to update any forward-looking statement, except as required under applicable law.
This release is not an offer of securities for sale in the United States. Securities may not be offered or sold in the United States absent registration or an exemption from registration. Any public offering of securities to be made in the United States will be made by means of a prospectus that may be obtained from the issuer or selling security holder and that will contain detailed information about the company and management, as well as financial statements.
Special Note Regarding Non-GAAP Financial Measures
A body of generally accepted accounting principles is commonly referred to as "GAAP". A non-GAAP financial measure is generally defined by the SEC as one that purports to measure historical or future financial performance, financial position or cash flows but excludes or includes amounts that would not be so adjusted in the most comparable U.S. GAAP measure. We disclose in this report certain non-GAAP financial measures, including EBITDA. EBITDA for any period is defined as consolidated net income (loss) excluding (i) depreciation and amortization, (ii) total net comprehensive financing cost (which is comprised of net interest expense, exchange gain or loss, monetary position gain or loss and other financing costs and derivative transactions), (iii) other expenses, net, (iv) income tax, (v) cumulative effect of change in accounting principle, net of tax and (vi) (income) loss from discontinued operations.
In managing our business we rely on EBITDA as a means of assessing our operating performance. We believe that EBITDA can be useful to facilitate comparisons of operating performance between periods and with other companies because it excludes the effect of (i) depreciation and amortization, which represents a non-cash charge to earnings, (ii) certain financing costs, which are significantly affected by external factors, including interest rates, foreign currency exchange rates and inflation rates, which have little or no bearing on our operating performance, (iii) income tax and tax on assets and statutory employee profit sharing, which is similar to a tax on income and (iv) other expenses or income not related to the operation of the business.
EBITDA is not a measure of financial performance under ROC GAAP. EBITDA should not be considered as an alternate measure of net income or operating income, as determined on a consolidated basis using amounts derived from statements of operations prepared in accordance with ROC GAAP, as an indicator of operating performance or as cash flows from operating activity or as a measure of liquidity. EBITDA has material limitations that impair its value as a measure of a company's overall profitability since it does not address certain ongoing costs of our business that could significantly affect profitability such as financial expenses and income taxes, depreciation, pension plan reserves or capital expenditures and associated charges. These non-GAAP measures are not in accordance with or an alternative for GAAP financial data, the non-GAAP results should be reviewed together with the GAAP results and are not intended to serve as a substitute for results under GAAP, and may be different from non-GAAP measures used by other companies. For more information on these non-GAAP financial measures, please see the tables captioned set forth at the end of this release and which shall be read together with the accompanying financial statements prepared under ROC GAAP.
If you have any questions in connection with the change of accounting policy, please contact the following person:
Contact name: Ms. Fu-fu Shen
Phone: +886-2-2344-5488
Fax: +886-2-3393-8188
Email: [email protected]
Address: CHUNGHWA TELECOM CO., LTD.
21-3 Hsinyi Road, Section 1,
Taipei, Taiwan,
Republic of China
SOURCE Chunghwa Telecom Co., Ltd.
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