HKT Trust and HKT (6823) H2 2023 earnings summary

Executive summary

• FY 23 revenue rose 1% to US$4,401M; revenue excluding mobile product sales increased 3% to US$4,022M, EBITDA grew 3% to US$1,718M, and adjusted funds flow (AFF) rose 3% to US$743M.

• Growth in mobile services, local data and enterprise was supported by cost efficiencies, broader 5G adoption and roaming recovery; softer handset sales weighed on total mobile revenue.

Financial highlights

• Profit attributable to holders of share stapled units increased 2% to US$640M; profit for the year was US$643M, up 2% YoY.

• Revenue excluding mobile product sales rose 3% to US$4,022M; EBITDA increased 3% to US$1,718M and adjusted funds flow rose 3% to US$743M.

• Opex declined 12% to US$446M; net finance costs increased to US$273M from US$204M, while effective tax rate fell to 9.0% from 11.5%.

Outlook and guidance

• Roaming recovery was expected to support further improvement in 2024; December total roaming revenue reached almost 90% of pre-pandemic levels.

• 5G SA was ready to support new handsets expected in 4Q24, while 5.5G capabilities are intended to lift speed, latency and reliability.

• China business was on track to achieve HK$1bn revenue, following 32% growth in 2023.

• Management priorities include AFF growth through cross-selling, enterprise expansion, productivity gains and cost efficiencies.