Business Context and Reporting Period
This Form 6-K filing by Chunghwa Telecom Co., Ltd. covers events and financial updates occurring between September 21, 2009, and October 9, 2009. The company is a foreign private issuer based in Taipei, Taiwan, primarily engaged in telecommunications services.
Key Financial Metrics
September 2009 Performance
- Net Sales: NT$15.65 billion (up 0.85% year-over-year).
- Operating Income: NT$4.32 billion.
- Net Income: NT$3.69 billion.
- Earnings Per Share (EPS): NT$0.35 (Normalized: NT$0.38).
First Nine Months of 2009 (YTD)
- Net Sales: NT$136.60 billion (down 2.47% year-over-year).
- Operating Income: NT$42.15 billion.
- Net Income: NT$33.18 billion.
- Earnings Per Share (EPS): NT$3.11 (Normalized: NT$3.42).
Investment Activity
- Disposal of Parvest Euro Bond Fund: Sold 39,406.28 units for a total of NT$320.79 million, realizing a profit of NT$33.39 million.
- Operating Capital: NT$36.74 billion (as of the most recent financial statement referenced).
Material Changes and Operational Updates
- Revenue Trend: While September 2009 showed a slight increase in net sales compared to the prior year, the YTD figure for the first nine months reflects a 2.5% decline in revenue.
- Legal Resolution: GigaMedia withdrew a civil lawsuit claiming NT$500 million in damages for patent tort against Chunghwa Telecom, resolving a contingency announced in June 2008.
- Strategic Discussions: Chunghwa Telecom's ISP subsidiary, HiNet, is in discussions with a China Telecom subsidiary regarding potential co-investment in an ICT company (IENet testing), though no formal agreement exists.
- Acquisition: A subsidiary, Light Era Development Co., Ltd., resolved to acquire 100% of Yao Jung Real Estate Company.
Outlook, Risks, and Management Commentary
- Investor Relations: The company conducted a non-deal road show in Hong Kong on September 22-23, 2009.
- Reporting Amendments: The company amended its 2008 Annual Report to correct information on multiple pages, indicating a focus on regulatory compliance and accuracy.
- Risk Mitigation: The withdrawal of the GigaMedia lawsuit removes a significant potential liability of NT$500 million.
- Capital Structure: The filing notes that reported EPS figures exclude the impact of capital increases; normalized EPS figures are provided for a clearer view of operational performance.
Key Facts for Investor Verification
- Verify the impact of the 2.5% YTD revenue decline on full-year 2009 guidance.
- Confirm the status and potential financial impact of the proposed cross-strait ICT co-investment with China Telecom.
- Review the details of the amended 2008 Annual Report to understand the nature of the corrections.
- Monitor the progress of the acquisition of Yao Jung Real Estate Company by the subsidiary Light Era Development.