Release Date: November 19, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Taiwan Mobile Co Ltd (TPE:3045, Financial) completed the consolidation of over 9,000 base stations three months ahead of schedule, leading to significant cost savings.
- The mobile business showed strong momentum with a 26% year-over-year revenue growth, driven by both the addition of Taiwan Star users and an 8% organic growth in the existing user base.
- Home broadband business reported an 18% year-over-year revenue growth, supported by upselling faster speeds and effective cross-selling strategies.
- Consolidated EBITDA increased by 20% year-over-year, reaching a new record of TWD31.7 billion, driven by merger synergies and Telco Plus strategies.
- The company achieved a low post-monthly churn rate of 0.8%, reflecting effective promotion of unique bundles and customer loyalty strategies.
Negative Points
- The e-commerce business, momo, experienced subdued revenue growth due to a shift in consumer spending towards travel and leisure activities.
- Despite stable gross margins, momo's EBITDA margin declined year-over-year due to investments in new businesses and marketing expenses.
- Financing costs increased as a result of inheriting and refinancing Taiwan Star's debt.
- There was a year-over-year increase in gross debt due to the acquisition of Taiwan Star's borrowing and dividend payments.
- Cash and cash equivalents declined quarter-over-quarter, primarily due to momo's dividend payout.
Q & A Highlights
Q: Congrats on the results. As we are well ahead of guidance, how should we think about merger synergies from 4Q 2024 and onwards?
A: Jamie Lin, General Manager, Director: We expect to continue extracting significant growth from merger synergies in 4Q 2024 and beyond. We will focus on delivering growth through our three strategies: building a sustainable growth foundation in our core Telco business, expanding our Telco Plus strategy with smart solutions for enterprises, and investing in our Telco Plus tech businesses like momo and DTV.
Q: Is the dividend expected to increase next year?
A: George Chang, Chief Financial Officer: It's too early to confirm next year's dividend proposal. However, given the YoY increase in EPS and earnings, despite share dilution, it's possible we could see a higher EPS. Ultimately, the decision will be made by the board next year.
Q: How is the company planning to enhance its Telco Plus offerings?
A: Jamie Lin, General Manager, Director: We are working with strategic partners like Systex, CloudMile, and AppWorks to bring smart solutions to large enterprises, SMEs, and government clients. This will help accelerate our enterprise business in the AI era and strengthen our Telco Plus offerings.
Q: What are the key drivers for the growth in the mobile business?
A: Jamie Lin, General Manager, Director: Key drivers include maximizing 5G conversions, capturing roaming opportunities, and executing our HGF strategies. This has resulted in increased monthly fees for contract renewals and rising ARPU and mobile service revenue.
Q: Can you elaborate on the impact of the T Star merger on financial performance?
A: George Chang, Chief Financial Officer: The T Star merger significantly contributed to our YoY consolidated revenue growth. It also drove a 20% YoY increase in consolidated EBITDA, with operating income reaching an 8-year high due to rental expense savings from base station consolidation.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
