PCCW (8) H2 2020 earnings summary

Executive summary

• 2020 delivered a steady performance through COVID-19; Viu OTT, Free TV and Solutions achieved double-digit growth while services continued uninterrupted.

• Digital transformation demand, increased online content consumption and investment in new products supported performance across enterprise and consumer businesses.

Financial highlights

• FY revenue rose 1% YoY to $4.878B from $4.81B; excluding lower HKT handset sales, service revenue increased 4% to $4.54B from $4.374B.

• Consolidated EBITDA fell 3% to $1.536B, reflecting lower HKT roaming and Solutions project delays; narrowing OTT and Free TV losses partly offset the impact.

• Core OpEx decreased 10% to $660M from $730M, with the OpEx-to-revenue ratio improving to 14% from 16%.

Outlook and guidance

• 2021 revenue growth targeted for Media and Solutions, supported by Viu’s Southeast Asia opportunities and Solutions’ $3.2B secured order backlog.

• OTT business expected to reach break-even within 1–2 years, with improved scale, data analytics and content planning supporting efficiencies.

• 2021 CapEx expected to have no significant spike; data center investment is the main incremental driver, while Viu content spending is expected to track revenue growth.

• Now TV expected to contribute more in 2021, supported by EURO 2020 exclusive broadcasting rights and integration synergies with HKT.

• Fo Tan data center phase two was expected to complete in 2021, with one-third of capacity pre-sold; Tsuen Wan West’s first phase was scheduled for 2022.