Business Context and Reporting Period
This Form 6-K filing by Chunghwa Telecom Co., Ltd. (Taiwan) is dated August 10, 2021. The report summarizes corporate announcements, consolidated financial results for the six months ended June 30, 2021, and operating results for July 2021. The company operates as a telecommunications provider in Taiwan, focusing on mobile services, broadband, and ICT projects.
Key Financial Metrics
Consolidated Results (Six Months Ended June 30, 2021)
| Metric | Value (NT$) |
|---|---|
| Operating Revenue | 99,702,130,000 |
| Gross Profit | 36,750,983,000 |
| Net Operating Income | 22,386,668,000 |
| Profit Before Tax | 22,785,290,000 |
| Net Profit Attributable to Parent | 17,752,472,000 |
| Basic EPS | 2.29 |
| Total Assets | 517,759,939,000 |
| Total Liabilities | 145,100,892,000 |
| Equity Attributable to Parent | 361,222,414,000 |
Note: Financial figures are presented under Taiwan-IFRSs. Under IFRSs, net profit attributable to the parent for the six months was NT$18,553 million with an EPS of NT$2.39.
July 2021 Operating Results
- Net Sales: NT$16.56 billion (up 1.62% year-over-year).
- Operating Costs and Expenses: NT$12.92 billion.
- Operating Income: NT$3.64 billion.
- Income Before Tax: NT$3.82 billion.
- Net Income Attributable to Parent: NT$2.97 billion.
- EPS: NT$0.38.
Material Changes and Drivers
Revenue growth in July 2021 was driven by increased Application VAS revenue from financial technology projects, mobile service revenue growth due to 5G subscriber expansion, and higher data communications and broadband access revenue attributed to stay-at-home demand. These gains were partially offset by a decrease in ICT project revenue. For the first seven months of 2021, net sales increased 3.57% year-over-year to NT$116.26 billion.
Guidance, Outlook, and Corporate Actions
Guidance and Outlook
July 2021 results met the third-quarter revenue guidance previously announced. Operating income, pretax income, and EPS all exceeded the company's guidance for the period.
Dividend Distribution
The Board approved a cash dividend of NT$4.306 per share for the 2020 earnings distribution. The ex-dividend date is August 25, 2021, with the record date set for August 31, 2021. Distribution is expected on September 28, 2021.
Material Transactions and Investments
- Nankang Multifunction Building: Approved construction of a 13-story building with Taipei City Government. Estimated cost is NT$2.72 billion, with completion expected by the end of 2024. Budget increase capped at NT$182.3 million.
- Co-construction Project: Authorized co-construction on company-owned land in Sanchong, New Taipei City, with subsidiary Light Era Development Co., Ltd.
- Asset Acquisition: Acquired right-of-use assets (cabinet lease) from subsidiary Chief Telecom Inc. for NT$947.96 million over an 8-year term to support IDC business.
- Related Party Transaction: Purchased Broadband Aggregation Network MSER equipment from affiliate Taiwan International Standard Electronics Ltd. for NT$305.77 million.
Risks and Contingencies
The filing notes unrealized losses on financial derivative transactions (non-trading purpose) of NT$2.27 million and NT$12.38 million for settled and outstanding positions, respectively. No specific new risks were detailed beyond standard operational disclosures.
Investor Verification Checklist
- Verify the reconciliation of financial results between Taiwan-IFRSs and IFRSs, specifically regarding the timing of income tax recognition on unappropriated earnings.
- Confirm the final budget and timeline for the Nankang Multifunction Building project with the Taipei City Government.
- Monitor the impact of 5G subscriber growth on long-term mobile service revenue versus the decline in ICT project revenue.
- Review the terms of the related-party transaction for MSER equipment to ensure pricing aligns with procurement regulations.
- Track the execution of the dividend distribution schedule and shareholder ratification on August 20, 2021.