China Telecom Corporation (728) H1 2024 earnings summary

Executive summary

• Operating revenues for H1 2024 reached RMB268.0 billion, up 2.8% year-over-year; service revenues were RMB246.2 billion, up 4.3% year-over-year, outpacing industry growth.

• EBITDA rose 4.7% to RMB76.8 billion; net profit attributable to equity holders increased 8.2% to RMB21.8 billion; basic EPS was RMB0.24.

• Strong growth in Industrial Digitalisation, cloud, and digital transformation initiatives, with subscriber value and technological innovation driving performance.

• Interim dividend of RMB0.1671 per share (pre-tax), up 16.7% year-over-year, representing over 70% payout of attributable profit.

• Advances in sci-tech innovation, AI, quantum, and green transformation, with enhanced shareholder returns and social responsibility fulfillment.

Financial highlights

• Mobile communications service revenues grew 3.6% year-over-year to RMB105.2 billion; mobile value-added and applications revenue up 17.1%.

• Wireline and Smart Family service revenues increased 3.2% to RMB64.0 billion; Smart Family business revenue up 14.4%.

• Industrial Digitalisation revenue reached RMB73.7 billion, up 7.2%, accounting for 30% of service revenues.

• China Telecom Cloud revenue reached RMB55.2 billion, up 20.4% year-over-year; public cloud revenue up 26%.

• Free cash flow was RMB15.5 billion; capital expenditure stood at RMB47.2 billion.

Outlook and guidance

• CapEx-to-revenue ratio to remain under 20% for 2024; capital expenditure for H1 2024 was RMB47.2 billion.

• Commitment to increase cash dividend payout to above 75% of attributable profit within three years from 2024.

• Focus on maintaining favorable revenue and EBITDA growth, with net profit growth projected to outpace revenue.

• Continued emphasis on Cloudification, Digital Transformation, and technological innovation.