Telecom firms netted handsome profits in first nine months

Taipei, Nov. 4, 2003 (CENS)--Taiwan's top three telecommunications firms, including Chunghwa Telecom Co., Taiwan Cellular Corp., and Far EasTone Telecommunications Co., scored combined earnings of NT$52.5 billion (US$1.54 billion at US$1:NT$33.9) in the first three quarters of this year.

Of them, Chunghwa ranked first with NT$3.77 (US$0.11) in after-tax earnings per share for the first three quarters of this year, followed by TCC with NT$2.21 (US$0.06) and Far EasTone, NT$2.23 (US$0.06).

Both Chunghwa and Far EasTone saw their gains in the first three quarters reach over 80% of their projected annual profit goals for the year, compared to 65% for TCC. Expecting to see continued growth in earnings in the fourth quarter, TCC estimated its whole-year earnings would exceed 80% of its annual profit projection.

Chunghwa, TCC and Far EasTone posted after-tax earnings of NT$36.404 billion (US$1.07 billion), NT$10.122 billion (US$298.58 million) and NT$6.015 billion (US$177.43 million), respectively, in the first three quarters. With total capitalization of NT$170.2 billion (US$5.02 billion), the above-mentioned three companies recorded an average EPS of NT$3.09 (US$0.09).

Despite the handsome earnings, the three telecom carriers suffered slides in pretax and after-tax profit rates in the first nine months because they launched some promotion campaigns amid fierce competition. Chunghwa, TCC and Far EasTone posted 34.2%, 31.25% and 22.03% in pretax profit rates, respectively, in the period.

Chunghwa said it recorded an annual growth of 1.48% in sales revenues in the first three quarters despite the increased competition following the deregulation of the domestic fixed-line telecom service sector.

But the company saw an annual decline of 1.66% in after-tax earnings for the first three quarters because of the fast growth in the number of subscribers, which led to an increase in overheads. The company currently has over eight million and 2.73 million subscribers for mobile phone and asymmetric digital subscriber line (ADSL) services, respectively.

To reduce overhead costs, Chunghwa said it laid off almost 200 employees in July. The company said it targets to keep operating and overhead costs this year in par with those posted last year.