Chunghwa Telecom Posts Profits Warning; CEO Retires
Published on: 28th Jan 2014
By: Ian Mansfield
Taiwan's Chunghwa Telecom has issued a profits warning and announced that its CEO is leaving the company with immediate effect.
Revenue for the full year is expected to come in at NT$228.23 billion, which was a tiny bit higher than the previous year, while net profit is expected to fall by 10 percent to NT$44.2 billion.
The EBITDA margin also declines to 33.8% from 35% in 2013.
Operating costs and expenses for 2014 are expected to increase by NT$4.21 billion to NT$184.70 billion. Costs of handset sold are expected to increase along with the promotion of mobile internet packages and customers' migration to 3G. Increase in CAPEX for the Company's fixed and mobile broadband businesses is expected to result in higher depreciation and maintenance expenses. The 4G license acquisition will also increase amortization expenses.
Not counting for the 4G license payment of NT$39.08 billion, CAPEX for 2014 is budgeted to increase by NT$3.72 billion year-over-year to NT$40.13 billion, primarily due to costs associated with the build-out of the 4G network, fiber broadband, mobile network, and cloud infrastructure.
Chunghwa Telecom also announced that Dr. Rick L. Tsai has been named as Chairman and CEO, effective immediately. He replaces Dr. Yen-Sung Lee, who after serving the Company for 40 years, has chosen to retire.
In addition, Dr. Shu Yeh will step down from his position as Chief Financial Officer (CFO) and Executive Vice President (EVP) upon completion of a four-year secondment from the National Taiwan University.
President Mu-Piao Shih will serve as interim CFO.