Business Context and Reporting Period
This Form 6-K filing by Chunghwa Telecom Co., Ltd. (CHT), dated May 10, 2022, reports material events and financial results for the first quarter of 2022 (ended March 31, 2022) and the month of April 2022. The filing includes announcements regarding senior management appointments, conference call schedules, and detailed financial disclosures comparing Taiwan-IFRSs and IFRSs.
Key Financial Metrics
First Quarter 2022 (Ended March 31, 2022)
- Operating Revenue: NT$51,294,739 thousand (Taiwan-IFRSs)
- Net Income: NT$9,390,977 thousand (Taiwan-IFRSs) / NT$8,893 million (IFRSs)
- Net Income Attributable to Parent: NT$9,059,580 thousand (Taiwan-IFRSs) / NT$8,580 million (IFRSs)
- Basic EPS: NT$1.17 (Taiwan-IFRSs) / NT$1.11 (IFRSs)
- Total Assets: NT$518,374,993 thousand (Taiwan-IFRSs) / NT$518,174 million (IFRSs)
- Total Liabilities: NT$117,992,156 thousand (Taiwan-IFRSs) / NT$120,420 million (IFRSs)
- Equity Attributable to Parent: NT$388,453,257 thousand (Taiwan-IFRSs) / NT$397,754 million (IFRSs)
April 2022 (Single Month)
- Revenue: Approximately NT$17.60 billion
- Income from Operations: Approximately NT$3.99 billion
- Net Income Attributable to Parent: Approximately NT$3.12 billion
- EBITDA: Approximately NT$7.32 billion
- EPS: NT$0.40
Year-to-Date (Ended April 30, 2022)
- Revenue: Approximately NT$68.90 billion
- Net Income Attributable to Parent: Approximately NT$12.18 billion
- EBITDA: Approximately NT$28.66 billion
Material Changes and Comparisons
Sales Growth: Net sales for April 2022 were NT$17,602,247 thousand, representing a 7.72% increase compared to April 2021. For the four-month period ended April 30, 2022, net sales totaled NT$68,896,986 thousand, a 3.70% increase year-over-year.
Accounting Differences: The filing highlights discrepancies between Taiwan-IFRSs and IFRSs. For Q1 2022, consolidated net income under Taiwan-IFRSs was approximately NT$498 million higher than under IFRSs. This difference is primarily attributed to the timing of income tax recognition on unappropriated earnings and the treatment of revenue from connection fees and prepaid cards (deferred under IFRSs vs. recognized upon sale/service under historical Taiwan-IFRSs rules).
Management Commentary, Risks, and Unusual Items
Management Changes
- April 13, 2022: The Board appointed Chau-Young Lin as President of the Information Technology Group, effective April 30, 2022.
- May 6, 2022: Hong-Chan Ma retired as Senior Executive Vice President. Li-Show Wu was appointed to replace him, effective June 30, 2022. Ms. Wu will also act as President of the Enterprise Business Group.
Financial Derivatives and Guarantees
- Derivatives: As of April 2022, the company held forward contracts for non-trading purposes. Outstanding positions totaled NT$186,484 thousand (non-hedge) and NT$505,271 thousand (hedge accounting). Unrealized gains recognized in the year were NT$3,994 thousand and NT$3,265 thousand, respectively.
- Guarantees: Accumulated guarantees for subsidiaries stood at NT$2,899,196 thousand, with a limited amount of NT$500,000 thousand.
- Lending: No funds were lent to other parties in April 2022.
Investor Verification Checklist
- Verify the specific impact of the accounting standard differences (Taiwan-IFRSs vs. IFRSs) on long-term equity and retained earnings, particularly regarding deferred revenue recognition.
- Confirm the strategic implications of the new senior management appointments in the Information Technology and Enterprise Business groups.
- Review the full Q1 2022 conference call presentation (referenced in Exhibit 99.02) for detailed segment performance and guidance not included in this summary.
- Monitor the exposure to financial derivative risks given the outstanding forward contract positions and fair value fluctuations.