Chunghwa Telecom (CHT) Reports 2023 Guidance

Chunghwa Telecom Co., Ltd. (TAIEX: 2412, NYSE: CHT) ("Chunghwa" or "the Company") today reported its guidance for 2023 on a consolidated basis. All figures were prepared in accordance with Taiwan-International Financial Reporting Standards ("T-IFRSs").

Mr. Chi-Mau Sheih, Chairman and CEO of Chunghwa Telecom, stated: "Looking into 2023, Chunghwa will focus on 'sustainability + 5G + innovative transformation' as our core strategy, and will integrate sustainable development with business operation, accelerate 5G network construction and strengthen innovative transformation to create a new growth curve. We focus on our three major business groups – 'Consumer, Enterprise and International Business Groups' – combined with our three technology groups – 'Network Technology Group, Information Technology Group and Telecommunication Laboratories' – to promote the empowerment of operations and technology. In order to drive up business growth, we will strengthen our core capabilities and infrastructure, improve operational resilience, enhance customer insight, improve talent development, reinvest into operations and grasp business opportunities, including net-zero transformation, 5G and 5G enterprise private networks, Forward-looking Infrastructure Development Program 2.0, post-pandemic opportunities and smart applications, among others."

"Given the new market competition landscape in Taiwan due to telecom industry consolidation, we remain confident to maintain our leadership in mobile service revenue and subscriber market share by offering our fastest 5G network and most extensive mobile coverage acknowledged internationally and domestically. Simultaneously, we will continue to accelerate the expansion of 5G enterprise private network and develop 5G smart applications alongside enterprise partners to further propel mobile business revenue and drive the growth of our ICT businesses. In addition, our strategy is to leverage our high-quality fixed broadband quality to enhance speed upgrade and multiple-play services, strengthening the user experience and maintaining growth dynamics in the fixed broadband business. In terms of video services, we will increase investment in MOD content and join together with Hami Video to meet diverse-viewing needs and further increase customer numbers and ARPU, driving the overall revenue growth of video business."

"Chunghwa Telecom fully supports the government's Net-Zero Emissions By 2050 plan, and continues to strengthen its network resilience and information security, providing the most reliable telecommunication services. The Company also strives to capture the business opportunities of ESG sustainability, remote zero-contact opportunities, 5G and digital transformation, by increasing investments in developing emerging businesses. With a focus on enhancing the strategic synergy of the Group, we are devoted to maximizing value for our shareholders, customers, society and employees."

For 2023, the Company expects total revenue to increase by NT$ 4.53~NT$6.05 billion, or 2.1%~2.8%, to NT$221.27~NT$222.79 billion as compared to the un-audited consolidated total revenue of 2022. The increase in revenue is expected to be driven by increases in mobile communications revenue, broadband access revenue, and data communications revenue, as well as revenue coming from the expansion of emerging business in the digital economy.

Operating costs and expenses for 2023 are expected to increase by NT$ 6.60~NT$ 7.30 billion, or 3.9%~4.3%, to NT$176.59~NT$177.29 billion as compared to the prior year. The increase is mainly from the increasing cost of investment in in talents and infrastructure that supports future business development in core and emerging businesses.

Income from operations is expected to decrease by NT$ 0.85~NT$2.17 billion, or 1.8%~4.6% to NT$44.67~NT$45.99 billion as compared to the prior year. Income before income tax, net income attributable to stockholders of the parent and net earnings per share are expected to be NT$44.86~NT$46.58billion, NT$34.55~NT$36.10 billion and NT$4.45~NT$4.65, respectively, representing a decrease of NT$0.69~NT$2.41 billion, a decrease of NT$0.42 ~NT$ 1.97billion and a decrease of NT$0.06~0.26 respectively, year over year.

Acquisition of Property, Plant and Equipment in 2023 is expected to be NT$ 35.31 billion to maintain competitiveness of 5G network and gain the opportunities of emerging businesses. As compared to the prior year, the mentioned acquisition is expected to increase by NT$1.88 billion, owing to strategic investments, including expansion of internet data center, new construction of submarine cable and FTTH for future business opportunities.

Note 1: "Other income and expenses" includes gains (losses) on disposal of property, plant and equipment (PP&E) and investment property, and impairment loss on PP&E and investment property.

Note 2: The calculation of growth rates is based on NT$ thousand.

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