Chunghwa Telecom Reports Steady Growth in Q2 2024

Chunghwa Telecom Co., Ltd. has reported a modest revenue increase for the second quarter of 2024, even though both income from operations and net income saw slight declines. As Taiwan’s premier telecom operator, the company achieved revenue of TWD 54 billion, the highest for this quarter in seven years.

This revenue growth was mainly fueled by increased earnings from mobile and broadband services, as well as a burgeoning Information and Communication Technology (ICT) division. However, elevated personnel and utility expenses led to a 2.7% decrease in income from operations and a 1% decline in net income. The company’s earnings per share (EPS) was TWD 1.27, while its EBITDA margin remained above 40%.

### Key Takeaways
– Chunghwa Telecom’s Q2 revenue reached TWD 54 billion, marking a seven-year high.
– While income from operations and net income slightly fell, mobile service revenues grew steadily.
– The company achieved 3 million subscriptions on its video platform during the exclusive broadcast of the 2024 Paris Olympic Games.
– Chunghwa Telecom’s AI Factory is designed to assist businesses with AI transformation.
– The company is planning to list Chunghwa Telecom Security as a publicly traded entity and is exploring mergers and acquisitions (M&A).

### Company Outlook
– Chunghwa Telecom forecasts positive growth in both its Consumer Business Group (CBG) and Enterprise Business Group (EBG) for the latter half of the year.
– The company projects a revenue distribution of 40% in the first half and 60% in the second half for its ICT segment.
– It remains receptive to potential M&A to enhance its growth trajectory and market presence.

### Challenges
– The decline in income from operations and net income was largely attributable to rising personnel and utility costs.
– A significant one-time government compensation related to the ST-2 satellite from the previous year created a high base effect that impacted income.

### Strengths
– Chunghwa Telecom has strengthened its position in Taiwan’s telecom market, evidenced by a continuous rise in subscriber share.
– Investments in content and AI development have proven successful, leading to notable growth in video platform subscriptions.
– The company reported a solid balance sheet and an increase in free cash flows by 14.1% year-over-year.

### Drawbacks
– Despite revenue growth, there were slight declines in net income and operational income.

### Q&A Highlights
– The AI Factory aims to support enterprises in their AI transformation by providing AI-driven systems and solutions.
– Chunghwa Telecom’s commitment to sustainability and corporate governance has garnered multiple awards.

Chunghwa Telecom’s strategic emphasis on content investment has yielded significant accomplishments, including reaching 3 million video platform subscriptions during the 2024 Paris Olympic Games. The company’s dedication to AI development and plans for Chunghwa Telecom Security to become a publicly traded entity signal its intent to foster growth and enhance market value. With a healthy debt ratio of 22.79%, Chunghwa Telecom is well-positioned to pursue its growth strategies, including potential mergers and acquisitions, while continuing to identify suitable targets that align with its ICT segment both domestically and abroad.