Chunghwa Telecom Q1 2025 Earnings: Strong Growth Amid Challenges

Chunghwa Telecom ((CHT)) has held its Q1 earnings call. Read on for the main highlights of the call.

Chunghwa Telecom’s recent earnings call for the first quarter of 2025 painted a picture of robust growth and strategic advancements. The company reported impressive increases in net income, EPS, and its ICT business, while maintaining a stronghold in the mobile market. Despite facing challenges such as a decline in free cash flow and operating cash flows, the overall sentiment was positive, highlighting significant achievements and strategic growth.

Increase in Net Income and EPS

Chunghwa Telecom reported a 4.3% year-over-year increase in net income and EPS for the first quarter. This growth was attributed to solid operations across its mobile, fixed-line, and ICT businesses, showcasing the company’s effective management and strategic focus.

Expansion of ICT Business

The enterprise ICT business of Chunghwa Telecom saw a remarkable 13% year-over-year revenue increase. This was driven by strong project revenue recognition and growth in recurring revenue, underscoring the company’s successful expansion in this sector.

Awards and Recognition

Chunghwa Telecom’s efforts were recognized with multiple awards, including the Technology Innovation of the Year by Asian Telecom Awards and a Top 5 ranking for the S&P Global ESG score. These accolades reflect the company’s commitment to innovation and sustainability.

Mobile Market Leadership

The company maintained its leadership in Taiwan’s mobile market, securing a 40.5% revenue share and a 39.1% subscriber share. With a 5G market share of 38.7%, Chunghwa Telecom continues to dominate the mobile sector.

Fixed Broadband Growth

Fixed broadband revenue and ARPU increased by 2.5% and 2.1% year-over-year, respectively. This growth was driven by subscriber speed upgrades, highlighting the company’s focus on enhancing customer experience.

International Expansion

Chunghwa Telecom’s international operations also flourished, with an 8.2% year-over-year increase in revenue from overseas subsidiaries. The growth was particularly strong in ICT services in the United States and Southeast Asia.

Financial Performance

The company’s revenue exceeded NT$55 billion, marking the fifth consecutive year of growth. Both EBITDA and net income reached their highest levels in nine years for a first-quarter period, reflecting strong financial health.

Free Cash Flow Decline

Despite the positive performance, Chunghwa Telecom faced a 17.4% year-over-year decline in free cash flow. This was due to higher settlements of accounts payable and increased capital expenditures, posing a challenge for the company.

Decrease in Cash Flows from Operating Activities

Cash flows from operating activities decreased by 8.6% year-over-year, primarily due to higher settlements of accounts payable. This decline highlights areas where the company needs to focus on improving efficiency.

Decline in Fixed Voice Revenue

The company experienced a continued decline in EBG’s fixed voice revenue, leading to a 3.8% year-over-year decrease in income before tax for the EBG. This trend indicates the challenges faced in the traditional voice service segment.

Forward-Looking Guidance

Looking ahead, Chunghwa Telecom expects continued growth across its key segments. The company anticipates a 2% increase in mobile service revenue and significant growth in value-added services, with multiple-play packages and Hami Video subscribers expected to rise by 33% and 45%, respectively. The enterprise ICT business is projected to continue its upward trajectory, driven by cybersecurity, IDC, and cloud services.

In summary, Chunghwa Telecom’s earnings call for Q1 2025 highlighted a strong performance with strategic growth in key areas. Despite challenges in cash flow and traditional services, the company remains optimistic about future prospects, driven by its leadership in the mobile market and expansion in the ICT sector.