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    CHT
    Earnings call· Jun 2025(Q2 FY25)

    CHUNGHWA TELECOM CO Q2 FY25 earnings call CHT

    Aug 5, 2025 Source

    Executive summary

    Chunghwa Telecom Q2 FY25 — Exceeded Forecasts with Strong ICT and Mobile Growth

    Chunghwa Telecom delivered a strong Q2 FY25, surpassing financial forecasts driven by robust performance in its ICT and mobile segments. The company continued to execute its "sea, land, and sky" strategy, enhancing network infrastructure and expanding satellite services. While international subsidiaries faced headwinds, core domestic businesses demonstrated solid growth and operational efficiency.

    Highlights

    5

    • Revenue, operating income, net income, and EPS exceeded the upper end of the company's forecast for Q2 FY25.

    • Q2 FY25 revenue reached a 10-year high for the same period, driven by core business and expanding ICT segment.

    • ICT revenue set a new record for any Q2 since 2021, with group enterprise ICT revenue increasing by 27% year-over-year.

    • Mobile market share rose to 40.7% as of June, reaching a new high in Taiwan.

    • Fixed Broadband ARPU increased by 2% year-over-year, representing TWD 14 per month.

    Concerns

    3

    • International subsidiaries revenue declined by 41% year-over-year due to project-based fluctuations and a high base from the prior year.

    • The International Business Group (IBG) experienced a decline in revenue and income before tax year-over-year.

    • Free cash flow declined by 6.8% year-over-year, primarily due to higher settlement of accounts payable and front-loaded capital expenditures.

    Guidance & targets

    1
    CategoryTargetConfidence
    Full-year Mobile-related CapEx
    Lower than in 2024
    medium materiality
    High

    Segment performance

    3
    SegmentRevenueYoYQoQMargin
    Consumer Business Group (CBG)
    Driven by steady growth in both Mobile and Fixed Broadband ARPU, stable core service revenue, and higher smartphone sales as consumers accelerated purchases in anticipation of potential tariff fluctuation.
    		———increased 4.8% in income before tax
    Enterprise Business Group (EBG)
    Exceeded expectations with strong ICT performance; total revenue rose 12% and ICT revenue grew 37% year-over-year.
    		increased 12%12%—increased 5.4% in income before tax
    International Business Group (IBG)
    Faced headwinds, with revenue and income before tax both declining year-over-year, primarily due to softening demand for international fixed voice services and a decline in international roaming services.
    		declined——declined

    Operational metrics

    22
    Adjusted EBITDA
    TWD 22.58 billion3.5% YoY increase
    Q2 FY25

    EBITDA also recorded modest gains during the quarter.

    Adjusted EBITDA margin
    39.8%stable compared to last year
    Q2 FY25

    The growth reflects continued operational efficiency and healthy cash-generating ability across our core business.

    Adjusted EBITDA
    TWD 45.11 billion3.4% YoY increase
    H1 FY25

    EBITDA increased by 3.4% year-over-year to TWD 45.11 billion for the first half of 2025.

    Adjusted EBITDA margin
    40.09%broadly in line with the same period last year
    H1 FY25

    This reflects stable operational efficiencies.

    Mobile market share
    40.7%rose
    Q2 FY25

    reaching a new high as of June

    5G market share
    38.7%
    Q2 FY25

    maintaining our leading position in this segment

    Mobile service revenue growth
    2%YoY
    Q2 FY25

    supported by robust network quality, the ongoing expansion of our subscriber base and continued 5G migration

    Fixed Broadband ARPU
    2%YoY
    Q2 FY25

    an encouraging sign of value expansion

    Fixed Broadband subscribers (300Mbps+ speeds)
    14%YoY increase
    Q2 FY25

    Nearly 70% of adopters opted for plans with speed of 300 megabit per second and high, including 1 gigabit per second services.

    Multiple packaging growth
    26%YoY
    Q2 FY25

    marking its 14th consecutive quarters of expansion

    Video business subscriptions growth
    6%YoY
    Q2 FY25

    fueled by the growth of Hami video subscribers, particularly among user seeking live sport content

    Video business revenue growth
    5%YoY
    Q2 FY25

    fueled by the growth of Hami video subscribers, particularly among user seeking live sport content

    Consumer cybersecurity services growth
    20%YoY
    Q2 FY25

    contributing to steady revenue gains in line with our expectations

    Group enterprise ICT revenue growth
    27%YoY
    Q2 FY25

    with recurring ICT revenue also rising 25%

    IDC revenue growth
    71%YoY
    Q2 FY25

    IDC and cloud remained the primary revenue drivers

    AIoT revenue growth
    40%YoY
    Q2 FY25

    AIoT service saw a sharp revenue increase largely driven by projects related to the smart energy, smart surveillance, smart building and smart transportation.

    Enterprise cybersecurity revenue growth
    11%YoY
    Q2 FY25

    in response to growing market demand

    5G private network revenue growth
    150%YoY
    Q2 FY25

    for the National Culture Center and Exhibition Home

    International subsidiaries revenue growth
    -41%YoY
    Q2 FY25

    primarily due to the project-based fluctuations resulting from the onetime revenue recognition from the U.S. and the Japan subsidiaries for the same period last year

    Current ratio
    above 100%
    Q2 FY25

    This highlights healthy short-term liquidity and financial flexibility.

    Reported debt ratio
    30.28%
    Q2 FY25

    reflecting the impact of dividend payable recorded at the end of the second quarter

    Adjusted debt ratio
    23.15%slight decrease compared to the year-end 2024
    Q2 FY25

    If we exclude the effect of dividend payable, the adjusted debt ratio would be 23.15%.

    Industry KPIs

    5
    MetricValueDetails
    Postpaid arpa vs ARPUmodest increase
    Postpaid phone net adds39.1%%
    Recurring revenue retention25%%
    Broadband fwa net adds split14% increase%
    Net debt EBITDA deleveraging path0x

    Product announcements

    4
    ProductTypeDetails
    Southeast Asia Japan Cable 2 (SJC2) Stage 2launch
    Asia United Gateway (AUG) East submarine cableexpansion
    OneWeb LEO servicesexpansion
    IOWN (all-photonics network) cross-border co-performancemilestone

    Deals & partnerships

    4
    NTTCollaboration to demonstrate the world's first cross-border co-performance through IOWN (all-photonics network).

    Successfully presented the co-performance at Expo 2025, demonstrating ultra-low latency applications.

    Correctional institutions nationwideDeployment of building remote surveillance platform.

    This project integrated IDC, cybersecurity, AIoT, and VPN capabilities to support smart surveillance operations, highlighted as a newly secured project in Q2 FY25.

    Leading petrochemical companiesImplementation of AI-powered image recognition and automatic optical inspection.

    A contract signed to assist with advanced inspection solutions.

    Taiwan-based high-tech firms (overseas)New contract awards for AIDC AI data center construction expertise.exceeding TWD 1 billion

    New contract awards exceeding TWD 1 billion were secured during Q2 FY25, leveraging proven capabilities in air-cooling and liquid-cooling solutions for overseas projects.

    Risks & headwinds

    5
    International subsidiaries revenue declineQ2 FY25

    41% year-over-year decline

    Mitigation: Continued strategic investment for long-term growth in the United States, Japan, and Southeast Asia; targeting overseas AIDC-related construction projects.

    Softening demand for international fixed voice and roaming servicesQ2 FY25

    Declined revenue and income before tax for IBG

    Global market sentiment uncertaintyOngoing

    Cautious sentiment

    Mitigation: Continue to invest strategically for long-term growth in key international markets.

    Temporary increase in Capital ExpendituresH1 FY25

    11.9% year-over-year increase in H1 FY25

    Mitigation: Disciplined strategic approach to capital allocation; full-year Mobile-related CapEx expected to be lower than in 2024.

    Free cash flow declineQ2 FY25

    6.8% year-over-year decline

    Mitigation: Maintaining a strong cash position and stable operating inflows to support business growth and shareholder returns.

    What to watch in Q3 FY25

    5

    Mobile-related CapEx

    FY25
    CurrentIncreased 11.9% YoY in H1 FY25 due to front-loaded deployment
    TargetLower than in 2024 for the full year

    Why it matters

    Indicates capital discipline and efficient resource allocation, impacting overall financial health.

    full year Mobile-related CapEx will remain on track to be lower than in 2024.

    2 min read6 chapters

    Detailed Narrative

    01

    Strategic Achievements & Network Expansion

    Chunghwa Telecom launched the Southeast Asia Japan Cable 2 (SJC2) Stage 2 in July, enhancing network performance across the Asia Pacific region and supporting bandwidth-intensive applications like AI and cloud computing. The company also announced an investment in the new Asia United Gateway (AUG) East submarine cable, expected to bring revenue after its completion in 2029. Furthermore, Chunghwa Telecom obtained an exclusive commercial license for OneWeb LEO services in Q2 FY25, extending satellite services to in-flight WiFi and maritime applications.

    02

    ESG & Corporate Governance Recognition

    The company received the highest MSCI ESG rating of AAA in May, making it the only Taiwan telecom to achieve this recognition, reflecting strong performance in governance, data privacy, and carbon management. Chunghwa Telecom also earned the prestigious 2025 Taiwan Data Center Services Competitive Strategy Leadership Award from Frost & Sullivan for its AI-ready data center capabilities. Its commitment to corporate governance was reaffirmed by the Taiwan Stock Exchange, recognizing it among the top 5% of listed companies.

    03

    Mobile Market Leadership

    Chunghwa Telecom strengthened its leadership position in Taiwan's mobile market, with its mobile market share rising to a new high of 40.7% as of June. The company also achieved the highest subscriber share among peers at 39.1%, driven by continued growth in postpaid subscribers. Its 5G market share reached 38.7%, maintaining a leading position, which contributed to a 2% year-over-year growth in mobile service revenue and a modest quarter-over-quarter increase in mobile ARPU.

    04

    Fixed Broadband Growth & Value Expansion

    Fixed Broadband revenue increased by 1.8% year-over-year, with ARPU rising approximately 2% year-over-year, or TWD 14 per month. This growth was driven by the success of strategic bundled plans and distinguished offerings of symmetrical uplink and downlink speeds for services above 300 megabits per second. Nearly 70% of adopters opted for plans with speeds of 300 megabits per second and higher, leading to a 14% year-over-year increase in subscribers within this tier.

    05

    Enterprise ICT & AI Data Center Momentum

    The enterprise ICT business demonstrated strong performance, with group revenue increasing by 27% year-over-year and recurring ICT revenue growing by 25%. Core service pillars such as IDC and AIoT were primary revenue drivers, growing 71% and 40% year-over-year, respectively. The company secured new contract awards exceeding TWD 1 billion during the quarter for its AIDC AI data center construction expertise and signed a contract to assist petrochemical companies with AI-powered image recognition.

    06

    International Business Headwinds

    Revenue from international subsidiaries declined by 41% year-over-year, primarily due to project-based fluctuations and a high base from one-time📎 revenue recognition in the U.S. and Japan subsidiaries in the prior year. The International Business Group (IBG) also faced headwinds, with both revenue and income before tax declining year-over-year, mainly due to softening demand for international fixed voice services and a decline in international roaming services.

    AI-generated summary of the company’s earnings call. Not investment advice.