Costs and ExpensesTotal operating costs and expenses for the first quarter of 2012 amounted to NT$44.1 billion, an increase of 14.4% compared to the same period of 2011. This increase was mainly consists of 69.8% from cost of handset sold, 14.6% from corporate solution and ICT project costs and 6.1% from maintenance and material expenses for broadband service promotion. Income Tax Income tax expense for the first quarter of 2012 was NT$2.0 billion, representing a 15.7% decrease compared to NT$2.3 billion for the same period of 2011. This decrease was due to lower income from operations. EBITDA and Net Income EBITDA for the first quarter of 2012 decreased by 11.8% to NT$19.4 billion, while income from operations decreased by 18.7% to NT$11.3 billion. The decreases in both EBITDA and income from operations reflected higher operating costs and expenses. The EBITDA margin for the first quarter of 2012 was 35.0% compared to 41.9% in the same period of 2011, and the operating margin was 20.4%, compared to 26.6% in the previous year. As a result, net income decreased by 19.8% year-over-year to NT$9.5 billion, and EPS decreased by 18.7% year-over-year to NT$1.22. Capital Expenditure ("Capex") Total capex for the first quarter of 2012 amounted to NT$6.7 billion, representing a 52.9% year-over-year increase. Of the NT$6.7 billion capex figure, 49.8% was used for the domestic fixed communications business, 29.7% was for the mobile business, 11.9% was for the internet business, 7.2% was for the international fixed communications business, and the remainder was for other uses. Cash Flow Cash flow from operating activities for the first quarter of 2012 increased by 34.9% year-over-year to NT$13.1 billion. The increase was mainly because starting 2011, the company adjusted its billing period for monthly fees one month later to be in line with that for communication charges, hence account receivable for the first quarter 2011 increased accordingly. Business and Operational Highlights Broadband/HiNet
- As of the end of the first quarter 2012, FTTx subscribers had reached 2.5 million, accounting for 55.8% of total broadband users. This year, the Company is continuing its execution on FTTx migration as well as to increase the total broadband subscriber base. Although the tariff reductions reduced the revenue, we will continue migrate customers to higher speed services and provide high definition programs, such as broadcasting of the coming Olympic Games, to accelerate the revenue recovery.
- HiNet broadband subscribers totaled 3.7 million at the end of March 2012, a year-over-year rise of 3.2%.
- As of the end of March 2012, Chunghwa had 10.1 million mobile subscribers, an increase of 3.1% compared to 9.8 million a year ago.
- As of the end of March 2012, Chunghwa had 1.8 million mobile internet subscribers compared to 1.5 million subscribers as of the end of 2011, demonstrating the strong growth momentum that the Company has achieved. As a result, Chunghwa enhanced its target number for mobile internet subscriber to 2.35 million by the end of 2012.
- Mobile VAS revenue for the first quarter 2012 rose 29.2% year-over-year to NT$4.6 billion, with mobile internet revenue increasing 58.7% year-over-year, representing the largest contributor to VAS revenue.
- As of the end of March 2012, the Company maintained its leading fixed-line market position, with fixed-line subscribers totaling 12.0 million.
- Until now, Chunghwa's Multimedia-on-demand (MOD) subscriber number had reached 1.1 million, and is still increasing, indicating that the enriched content is satisfying customer demands. MOD ARPU also increased significantly to NT$145 in the first quarter, representing a growth of 15.7% compared to the same period of 2011.