Chunghwa Telecom Co Ltd (CHT) 2024 Q3 法說會逐字稿

Good afternoon, ladies and gentlemen, welcome to Chunghwa Telecom conference call for the company's third-quarter 2024 operating results. (Operator Instructions) For your information, this conference call is now being broadcast in live over the Internet. Webcast replay will be available within an hour after the conference is finished.

女士們、先生們下午好，歡迎參加中華電信電話會議，了解公司2024年第三季經營業績。（操作員說明）僅供參考，本次電話會議現透過網路進行現場直播。會議結束後一小時內將提供網路直播重播。

Please visit the CHT IR website, www.cht.com.tw/ir, under the IR Calendar section.

請造訪 CHT IR 網站 www.cht.com.tw/ir，在 IR 日曆部分。

And now I would like to turn it over to Ms. Angela Tsai, Assistant Vice President of Investor Relations. Thank you. Ms. Tsai, please go ahead.

現在我想把它交給投資人關係助理副總裁蔡安琪女士。謝謝。蔡女士，請講。

Thank you. I'm Angela Tsai, Assistant Vice President of the Finance Department for Chunghwa Telecom. Welcome to our third-quarter 2024 results conference call. Joining me on the call today are Rong-Shy Lin, our recently appointed President; and Audrey Hsu, our new Chief Financial Officer. As usual, I would like to remind everyone to read our disclaimers and note the related forward-looking statement on page 2.

謝謝。我是中華電信財務部助理副總裁蔡安琪。歡迎參加我們的 2024 年第三季業績電話會議。今天和我一起參加電話會議的還有我們最近任命的總裁林榮詩 (Rong-Shy Lin)；以及我們新任財務長 Audrey Hsu。像往常一樣，我想提醒大家閱讀我們的免責聲明並注意第 2 頁的相關前瞻性聲明。

Before I turn the call over to President Lin, I would like to briefly introduce our newly appointed President and CFO. President Rong-Shy Lin holds a PhD degree in Computer Science from National Chiao Tung University and has previously served as our Chief Business Officer, Chief Technology Officer, and Chief Information Security Officer, possessing comprehensive experience in business development and technology advancements in the telecom industry.

在我把電話轉給林總裁之前，我想先簡單介紹一下我們新任命的總裁和財務長。林榮世總裁擁有國立交通大學電腦科學博士學位，曾擔任我們的首席商務官、首席技術官和首席資訊安全官，在電信行業的業務發展和技術進步方面擁有豐富的經驗。

Our new CFO, Audrey Hsu, holds her PhD degree in Accounting and Finance from Lancaster University, and was serving as Professor of Accounting at the National Taiwan University. She was also the Associate Dean of International Affairs and Director of GMBA of National Taiwan University.

我們的新任財務長 Audrey Hsu 擁有蘭卡斯特大學會計與金融博士學位，並曾擔任國立台灣大學會計學教授。曾任台灣大學國際事務副院長、GMBA 主任。

We warmly welcome our new executive, President Lin and Dr. Audrey Hsu, to the earnings conference. And now I will turn the call over to President Lin for the business updates, who will be followed by Dr. Audrey Hsu for the financial highlights. Afterwards, we will move on to the Q&A session. President Lin, please go ahead.

我們熱烈歡迎新任高階主管林總裁和 Audrey Hsu 博士參加收益會議。現在我將把電話轉給林總裁，了解業務最新情況，然後由 Audrey Hsu 博士介紹財務摘要。隨後，我們將進入問答環節。林總，請講。

Thank you, Angela, and hello, everyone. Welcome to our third-quarter 2024 results conference call. To begin, I would like to extend a warm welcome from Chungwa Telecom to our new CFO, Audrey Hsu. We are happy to have her join our executive team and participate in today's call.

謝謝你，安吉拉，大家好。歡迎參加我們的 2024 年第三季業績電話會議。首先，我謹向中華電信對我們新任財務長 Audrey Hsu 表示熱烈歡迎。我們很高興她加入我們的執行團隊並參加今天的電話會議。

And now please flip to page 3 for our recent strategic achievements. In the third quarter, we are pleased to announce our continued success in expanding our lead in Taiwan's mobile market. According to the regulator of communications in Taiwan telecoms splendid 5G penetration, in the third quarter remained the highest among peers, which has contributed to our continued growth in our postpaid subscriber numbers from this year.

現在請翻到第 3 頁，了解我們最近的策略成就。在第三季度，我們很高興地宣布我們繼續成功擴大我們在台灣行動市場的領先地位。根據台灣電信監管機構的數據，輝煌的5G滲透率在第三季仍然是同業中最高的，這有助於我們今年以來後付費用戶數的持續成長。

We are agreed to that telecom continued to out pass the industry in terms of subscriber growth. In addition, we achieved a new single quarter revenue record for the third quarter, the highest in the last seven years. Meanwhile, we are especially pleased to see our total ICT revenue reached his third quarter high since 2022, when we transformed our organization to a customer centric structure.

我們一致認為，電信在用戶成長方面繼續領先產業。此外，我們第三季創下了新的單季收入記錄，為過去七年來的最高水準。同時，我們特別高興地看到我們的 ICT 總收入達到了自 2022 年以來第三季的最高水平，當時我們將組織轉型為以客戶為中心的結構。

Our proven success and effective strategy has driven our continued ICT industry leadership. Furthermore, putting us far ahead of our competitors going forward, we are confident in expanding our industry lead. Another area we are continuously developed is advanced networks and the technologies.

我們經過驗證的成功和有效的策略推動了我們在 ICT 行業的持續領導地位。此外，我們有信心擴大我們的行業領先地位，使我們在未來遠遠領先於競爭對手。我們不斷發展的另一個領域是先進的網路和技術。

In the third quarter, we are proud to announce our successful collaboration with entity corporation in launching the world first IOWN all-photonics communication link between Taiwan and Japan. This delivers high speed connectivity with ultra-low latency and the power consumption perfectly suited for the AI-driven future.

在第三季度，我們很自豪地宣布與實體公司成功合作，在台灣和日本之間推出了世界上第一個IOWN全光子通訊鏈路。這提供了具有超低延遲和功耗的高速連接，非常適合人工智慧驅動的未來。

In addition, as the exclusive OneWeb low earth orbit satellite service provider, we are happy to report that the coverage in Taiwan has reached 90% in the third quarter and expected to achieve 100% in the fourth quarter.

此外，作為唯一的OneWeb近地軌道衛星服務供應商，我們很高興地報告，第三季台灣地區的覆蓋率已達到90%，預計第四季將達到100%。

This expansion enhances our network resilience and contributed to related revenue. Furthermore, we are making progress in transitioning our air-cooled solution to liquid cool solution to support Nvidia AI servers which will better enhance IDC's power usage effectiveness and also contributed to the offering of GPU as a service.

此次擴張增強了我們的網路彈性並貢獻了相關收入。此外，我們在將風冷解決方案轉變為液冷解決方案以支援 Nvidia AI 伺服器方面取得了進展，這將更好地提高 IDC 的電源使用效率，也有助於提供 GPU 即服務。

Lastly, in our pursuit of ESG best practice, I am pleased to report that we have officially reviewed. I received SBTi verification for his net zero greenhouse gas emission target. This achievement makes us the first operator in Taiwan to commit to realizing net zero by 2045 ahead of the global accepted 2050 road map.

最後，在我們追求 ESG 最佳實踐的過程中，我很高興地報告說，我們已經進行了正式審查。我收到了 SBTi 對其溫室氣體淨零排放目標的驗證。這項成就使我們成為台灣第一家承諾在全球公認的 2050 年路線圖之前於 2045 年實現淨零排放的營運商。

In addition, we obtained carbon footprint verification for all of our service centers nationwide, setting us apart as the only telecom company in Taiwan to achieve this milestone. Now let's move on to the business overview of the third quarter of 2024.

此外，我們還獲得了全國所有服務中心的碳足跡驗證，使我們成為台灣唯一實現這一里程碑的電信公司。現在讓我們繼續回顧2024年第三季的業務概況。

We are pleased to report another quarter of market share gains in the third quarter of 2024. Our overall subscribers share of Taiwan's mobile market reached to 37.8% achieving a stable year-over-year increase. We are even more excited to see our industry number one 5G subscriber market share reached to 38.8% better than that of overall mobile subscriber share.

我們很高興地報告 2024 年第三季市佔率又成長了一個季度。我們在台灣行動市場的整體用戶佔有率達到37.8%，實現年比穩定成長。更令我們興奮的是，我們產業第一的 5G 用戶市佔率達到了 38.8%，高於整體行動用戶佔有率。

In addition, our revenue share remained over 40%, hitting 40.3% as of the end of September, continuously exceeding our subscriber shares to reflect our healthy growth. As our postpaid subscriber net adds continued to outperform peers along with growing 5G migration and the steady international roaming contributions.

此外，我們的收入份額保持在 40% 以上，截至 9 月底達到 40.3%，持續超過我們的用戶份額，反映了我們的健康成長。隨著 5G 遷移的不斷增長和國際漫遊貢獻的穩定，我們的後付費用戶網路成長繼續優於同業。

Our mobile service revenue recorded that 2% year-over-year increase, maintaining growth for 14 consecutive quarters. In the third quarter, we are glad to see the average monthly fee uplift from 5G migration exhibited a 43% uptick, maintaining healthy momentum. Let's move on to the slide 6 for an update of our outperforming fixed broadband business.

行動服務營收年增2%，連續14個季度維持成長。第三季度，我們很高興看到5G遷移帶來的平均月費上漲了43%，維持了健康的勢頭。讓我們繼續看投影片 6，了解我們表現出色的固定寬頻業務的最新情況。

In the third quarter, we expanded our cross tier upgrade promotion package to include 1 gigabit per second service offering. As a result, our subscriber net adds 1 gigabit per second service doubled during this quarter.

在第三季度，我們擴大了跨層升級促銷套餐，包括每秒 1 吉比特的服務產品。結果，我們的用戶網路增加了每秒 1 GB 的服務，在本季翻了一番。

Moreover, the number of subscribers with speed of 300 megabits per second and above increased by 20% year over year, maintaining double-digit growth and the total number of fixed broadband subscribers also rose.

此外，300兆以上速率用戶數年增20%，維持兩位數成長，固定寬頻用戶總數也有所成長。

Thanks to our successful speed upgrade strategy, our fixed broadband revenue and ARPU continued to increase by 3.4% and 1.5% over year respectively, effectively contributing to our overall performance. Now, let's get a close look at the performance of our business groups.

得益於成功的提速策略，固定寬頻收入和ARPU繼續年比分別成長3.4%和1.5%，有效提升了整體績效。現在，讓我們仔細看看我們的業務部門的表現。

Page 8 presents our performance of our consumer business group. In the third quarter, total CBG revenue increased by 2.1% year over year, driven by several factors including the increase of mobile service revenue due to 5G migration, and the increase in postpaid subscribers. The steady growth of fixed broadband revenue and the increase of OTT revenue generated from our exclusive broadcast of the Paris Olympic Games.

第 8 頁介紹了我們消費者業務部門的業績。第三季度，CBG總營收年增2.1%，受到5G遷移帶來的行動服務收入增加以及後付費用戶增加等多種因素的推動。固定寬頻營收穩定成長，巴黎奧運獨家轉播帶來OTT營收成長。

In addition, the launch of iPhone 16 series during this quarter further drove up the sales revenue by 1.3% and we anticipate that this momentum will continue into the fourth quarter. Although CBG delivered positive revenue growth in the third quarter, its income before tax, slightly decreased year over year, mainly due to the one-time broadcasting fee of the Paris Olympic Games.

此外，本季iPhone 16系列的推出進一步拉動銷售收入成長1.3%，我們預期這一動能將持續到第四季。儘管CBG第三季營收正成長，但稅前收入較去年同期略有下降，主要是由於巴黎奧運一次性轉播費的影響。

Slide 9 further illustrated our CBG highlights. In the third quarter, our multiple play packages, which combine mobile fixed broadband and WiFi services altogether, continued to deliver outstanding year-over-year growth of 65%.

幻燈片 9 進一步說明了我們的 CBG 亮點。第三季度，我們將行動固定寬頻和 WiFi 服務結合在一起的多重遊戲套餐繼續實現了 65% 的出色同比增長。

In terms of applications, our video business demonstrated the significant growth due to our exclusive broadcast of the Paris Olympic Games during this quarter. Subscription to our video platform comprising of MOD and Hami Video successfully succeeded 3 million, maintaining the largest video platform in Taiwan. Compared to the total Olympic Games, new signs up for Hami Video increased [60%], while advertising revenue more than doubled.

在應用方面，視訊業務因本季獨家轉播巴黎奧運而呈現顯著成長。MOD和哈密影片組成的影片平台訂閱量成功突破300萬，維持台灣最大影音平台的地位。與奧運總量相比，哈密影片的新報名人數增加了[60%]，而廣告收入則增加了一倍以上。

Overall, video business-related revenue in the third quarter delivered the double digits year-over-year growth, highlighting the success of our content investment. Other than video applications, our consumer cybersecurity subscription increased by 16% year over year in the third quarter.

整體而言，第三季視訊業務相關營收年增，凸顯了我們內容投資的成功。除視訊應用程式外，第三季我們的消費者網路安全訂閱量年增 16%。

Please turn to slide 10 for an overview of our enterprise business group performance. In the third quarter, EBG's total revenue increased by 5.9% year over year, mainly driven by our robust growth in ICT business, which saw a 22% year-over-year increase in revenue, mainly fueled by the strong performance of our emerging services.

請參閱投影片 10，以了解我們企業業務集團的績效概覽。第三季度，EBG總營收年增5.9%，主要得益於我們ICT業務的強勁成長，ICT業務營收年增22%，主要得益於我們新興服務的強勁表現。

In terms of EBG co services, although we see the ongoing 5G migration and the fixed broadband speed upgrades provided some positive momentum to drive up mobile data revenue and the broadband data communication and the assets revenue. It was not enough to fully offset the revenue decline of mobile voice and the fixed line voice in the third quarter.

就EBG聯合服務而言，儘管我們看到正在進行的5G遷移和固定寬頻速度升級為推動行動數據收入以及寬頻數據通訊和資產收入提供了一些積極動力。不足以完全抵消第三季行動語音和固網語音收入的下降。

Constantly, the decline of voice services also result in the year-over-year decrease of EBG income before tax. Slide 11 provides a detailed picture of our enterprise business highlights. We are excited to report that our ICT emerging business outperformed in the third quarter with revenue increasing by 30% year over year.

語音業務的持續下滑也導致EBG稅前收入年減。幻燈片 11 詳細介紹了我們企業的業務亮點。我們很高興地報告，我們的 ICT 新興業務在第三季表現出色，營收年增 30%。

All our major applications demonstrated that a strong double digit and even triple digit year-over-year growth, not only 5G private network revenue surged due to the 5G ORAN project. While big data analysis revenue doubled, thanks to smart government initiatives. For our AIoT, Cloud and IDC business, we are delighted to see year over year revenue increase of 44% 24% and the 21% respectively.

我們所有的主要應用都表明，同比強勁的兩位數甚至三位數成長，不僅是5G專網收入因5G ORAN項目而激增。由於明智的政府舉措，大數據分析收入翻了一番。對於我們的AIoT、雲端和IDC業務，我們很高興看到營收年增44%、24%和21%。

The gains were mainly due to the completion of AIoT projects in smart energy, smart surveillance and the smart transportation as well as the continued growth in recurring revenues from Cloud and IDC business. Cybersecurity revenue also achieved a 24% growth on year, making the 11 consecutive quarters of year-over-year increase.

收益主要得益於智慧能源、智慧監控、智慧交通等AIoT專案的完成，以及雲端和IDC業務經常性收入的持續成長。網路安全收入也實現了24%的年成長，連續11個季度年增。

It is worth noting that in the third quarter, we successfully developed the first 5G Private Network Backpack, a smaller and lighter 5G private network, capable of receiving satellite signals are quite useful in the remote area and fully complementing our overall network resilience.

值得注意的是，在第三季度，我們成功開發了第一個5G專網背包，這是一個更小、更輕的5G專網，能夠接收衛星訊號，在偏遠地區非常有用，完全補充了我們整體網路的彈性。

Additionally, we secure a flagship project to have a leading franchise retail in Taiwan to integrate network and equipment and offer services such as surveillance, cybersecurity and the cloud solution, et cetera. We value not only the secure the revenue but also the recurring contributions from maintenance and consulting services afterwards.

此外，我們還獲得了一個旗艦項目，在台灣擁有領先的特許經營零售店，以整合網路和設備，並提供監控、網路安全和雲端解決方案等服務。我們不僅重視穩定的收入，也重視事後維護和諮詢服務的經常性貢獻。

Lastly in this quarter, we want another AMI smart energy construction project and further strengthened our position as the leading AMI project operator. With the largest market share of AMI services, we are well positioned to develop and deliver related maintenance and application service going forward.

最後，在本季度，我們希望再有一個 AMI 智慧能源建設項目，並進一步鞏固我們作為領先 AMI 項目營運商的地位。憑藉 AMI 服務最大的市場份額，我們在未來開發和提供相關維護和應用服務方面處於有利地位。

Slide 12 illustrated our international business performance. In the third quarter, IBG total revenue and income tax increased year over year by 1.4% and 11% respectively, mainly due to the vibrant demand for Cloud and IDC solution in the international market as well as contributions from our Japan subsidiary. Excitingly, our European subsidiary in Frankfurt, Germany began operations on July 13.

幻燈片 12 展示了我們的國際業務表現。第三季度，IBG總營收和所得稅年比分別成長1.4%和11%，主要得益於國際市場對雲端和IDC解決方案的旺盛需求以及日本子公司的貢獻。令人興奮的是，我們位於德國法蘭克福的歐洲子公司於 7 月 13 日開始營運。

This milestone underscores our efforts in the European market. Our strategy is to collaborate with European telecom operators and the ICT service provider to promptly offer ICT solution to both Taiwanese and the European enterprise.

這一里程碑凸顯了我們在歐洲市場的努力。我們的策略是與歐洲電信業者和ICT服務供應商合作，及時為台灣和歐洲企業提供ICT解決方案。

We have already secured ICT projects from the high tech industry in the European market. In August, we also joined the IoT World Alliance, opening up potential opportunities in the internet of vehicles and other transnational IoT projects.

我們已經獲得了歐洲市場高科技產業的ICT專案。8月，我們也加入了物聯網世界聯盟，為車聯網和其他跨國物聯網專案開闢了潛在機會。

Now, I would like to turn the call to Audrey for our financial highlights.

現在，我想請奧黛麗了解我們的財務亮點。

Thank you. Thank you, President. Good afternoon, everyone. I'm pleased to share a summary of our financial results for the third quarter of 2024. Starting with our income statement highlights on page 14. In the first two columns, you will see that for the third quarter of 2024, our revenue exceeds $55 billion, marking a seven-year high for this period.

謝謝。謝謝你，總統。大家下午好。我很高興分享我們 2024 年第三季的財務表現摘要。從第 14 頁的損益表重點開始。在前兩列中，您將看到 2024 年第三季我們的收入超過 550 億美元，創下該時期的七年來新高。

This is a 3.6% increase from the same quarter last year. This was primarily driven by the significant growth in our ICT business. Our income from operations and net income, so slight declines of 0.8% and 1% respectively.

這比去年同期增長了 3.6%。這主要是由我們的 ICT 業務的顯著成長所推動的。我們的營運收入和淨利潤分別小幅下降了 0.8% 和 1%。

It is important to note that this these shifts were largely due to two main factors. First, higher manpower costs have impacted our income. This expense reflect our strategic investment this year in maintaining a skilled and motivated workforce which is essential for sustaining our operational momentum and driving future growth.

值得注意的是，這些轉變很大程度上是由於兩個主要因素造成的。首先，人力成本上升影響了我們的收入。這筆費用反映了我們今年在維持熟練且積極主動的員工隊伍方面的策略性投資，這對於維持我們的營運動能和推動未來成長至關重要。

Second, we experience increased broadcast rise fees for the Olympic Games. Secure the invaluable content is a critical step in enhancing our service offerings and supporting our long term growth objectives. Despite this higher cost, our earnings per share for the quarter stood at 1.16 showcasing the underlying strength of our core operations.

其次，奧運轉播費上漲。保護寶貴的內容是增強我們的服務產品和支持我們的長期成長目標的關鍵一步。儘管成本較高，但我們本季的每股盈餘仍達到 1.16，顯示了我們核心業務的潛在實力。

Now, if we move to column five to seven of the table, you look at the first nine months of 2024 revenue grew by 2.1% year over year, driven by continued strong performance in ICT mobile and broadband services. Income from operations and net income decreased by 1.9% and 1.5% year over year. Mainly due to the high base from last year's onetime government compensation related to ST-2 satellite.

現在，如果我們轉到表格的第五列至第七列，您會發現，在 ICT 行動和寬頻服務持續強勁表現的推動下，2024 年前 9 個月的收入同比增長了 2.1%。營業收入和淨利潤較去年同期分別下降1.9%和1.5%。主要是由於去年ST-2衛星相關政府一次性補償基數較高。

Additionally, higher manpower, which were also noted earlier, underscore our investment maintaining a talented workforce. And as you all know, utility costs have also raised then notably impacted by the Taiwan government's decision in April to raise electricity price. The increase has contributed to our higher operational expense.

此外，前面也提到過，人力的增加強調了我們為維持一支有才華的勞動力而進行的投資。眾所周知，受台灣政府四月決定提高電價的影響，公用事業成本也隨之上漲。這一增長導致我們的營運費用增加。

If we exclude the one-time government compensation related to satellite last year, you will find that the net income growth remains positive year over year, underscoring the healthy momentum of our core and ICT operations. The continued growth in revenue reaffirms the importance of strategic investment in future growth such as investing in our employees and expanding content offerings.

如果剔除去年與衛星相關的一次性政府補償，你會發現淨利潤同比仍保持正成長，凸顯了我們核心業務和ICT業務的健康發展勢頭。收入的持續成長再次證明了策略性投資對未來成長的重要性，例如投資我們的員工和擴大內容供應。

For the first nine months, our earnings per share reached 3.64 and the EBITDA margin remained stable, demonstrating our resilience and commitment to long-term value creation. Now, moving on to page 15 for a review of our balance sheet highlights. First as of September 30, 2024, total asset decreased by 2.7% compared to the year end of 2023. The decrease was largely attributed to the decline in property plant and equipment.

前 9 個月，我們的每股盈餘達到 3.64，EBITDA 利潤率保持穩定，展現了我們的韌性和對長期價值創造的承諾。現在，請前往第 15 頁，回顧我們的資產負債表要點。首先截至2024年9月30日，總資產較2023年底下降2.7%。此下降主要歸因於房地產廠房和設備的下降。

Next, total liability decreased by 4.7% relative to the year end of 2023, primarily due to the decrease in accounts payable accrued salary and current tax liability. Additionally, our debt ratio continued to reflect a strong financial position. The debt ratio decreased slightly and net debt over EBITDA remains at zero.

其次，總負債較2023年底下降4.7%，主要是應付帳款、應計工資及當期所得稅負債減少。此外，我們的債務比率繼續反映出強勁的財務狀況。負債比率略有下降，淨負債除以 EBITDA 的比率保持為零。

This conservative debt position aligns with our company policy of minimizing financial risk and ensuring financial flexibility. A low debt level, not only underscores our commitment to fiscal responsibility but also enhancing our resilience against economic uncertainties position us for long-term value creation.

這種保守的債務狀況符合我們最大限度降低財務風險和確保財務靈活性的公司政策。低債務水平不僅強調了我們對財政責任的承諾，而且增強了我們應對經濟不確定性的能力，使我們能夠創造長期價值。

So turning to now -- let's turn to page 15 which provides the summary of our cash flows. First, cash flow from operating activities saw a slight decrease by 0.3% year over year. This was primarily due to the timing of the income tax payment of with a significant portion of income tax being deferred to the fourth quarter of last year.

現在，讓我們翻到第 15 頁，其中提供了我們現金流的摘要。一是經營活動現金流量較去年小幅下降0.3%。這主要是由於所得稅的繳納時間，將有很大一部分所得稅推遲到去年第四季。

So this is purely because of this tax issue. And if we go to the capital expenditure, CapEx, it declines by 15.1% year over year, reflecting our strategic focus on disciplining, spending and prioritization of high impact investment. The reduction is part of our approach to optimize capital allocation ensuring that resources are directed towards projects that yield the highest return.

所以這純粹是因為這個稅收問題。如果我們考慮資本支出（CapEx），它比去年同期下降 15.1%，反映出我們對高影響力投資的紀律、支出和優先順序的策略重點。此次削減是我們優化資本配置方法的一部分，確保資源用於產生最高回報的項目。

Notably, the free cash flow increased by 8.7% compared to the previous year, highlighting the strength of our operational efficiency and effective financial management. The robust free cash flow enhancing our financial flexibility, enabling us to pursue strategic growth opportunities and it can support shareholder return and reinforce our long term sustainability.

值得注意的是，自由現金流較前一年成長8.7%，凸顯了我們營運效率和有效財務管理的實力。強勁的自由現金流增強了我們的財務靈活性，使我們能夠尋求策略成長機會，並可以支持股東回報並加強我們的長期可持續性。

Now let's move on to page 17. Let's turn to the table summarize our operating performance relative to our guidance. In the third quarter of 2024, revenue closely met our target for the period. Key performance indicator including income from operations, net income and EBITDA were all in line with our forecast showcasing our ability to achieve a consistent result.

現在讓我們翻到第 17 頁。讓我們用表格總結一下我們相對於指導的經營績效。2024 年第三季度，收入基本上達到了我們的同期目標。包括營運收入、淨利潤和 EBITDA 在內的關鍵績效指標均符合我們的預測，顯示我們有能力實現一致的結果。

Looking at the first nine months of 2024, revenue remains aligned with our expectations. Importantly, income from operations, net income, EBITDA and EBITDA margin all outperform our guidance. This stronger-than-expected results were driven by steady growth in our core business and improve profitability in our ICT operations, reinforcing the effectiveness of our strategic initiatives.

展望 2024 年前 9 個月，營收仍符合我們的預期。重要的是，營運收入、淨利潤、EBITDA 和 EBITDA 利潤率均優於我們的指導。這一強於預期的業績得益於核心業務的穩定成長和ICT業務獲利能力的提高，增強了我們策略舉措的有效性。

So now I conclude my financial review for the third quarter and our prepared remarks. So thank you for your attention, and we are now pleased to open the conference call for questions.

現在我總結了第三季的財務回顧和我們準備好的評論。感謝您的關注，我們現在很高興開始電話會議提問。

Thank you, Audrey Hsu. Ladies and gentlemen, we will now begin our question-and-answer session. (Operator Instructions)

謝謝你，奧黛麗許。女士們先生們，我們現在開始問答環節。（操作員說明）

Sara Wang, UBS.

王莎拉，瑞銀。

Thank you for the opportunity to ask a question. So actually I have two questions. First is that I understand that the high base last year from government subsidy and also higher electricity actually put pressure on our net profit growth, but just want to be more specific that why profit before tax declined for consumer and enterprise segments, any other sector specific reasons? This is my first question.

感謝您給我提問的機會。所以其實我有兩個問題。首先，我知道去年來自政府補貼的高基數和更高的電力實際上給我們的淨利潤增長帶來了壓力，但我只想更具體地說明為什麼消費者和企業部門以及任何其他特定部門的稅前利潤下降原因？這是我的第一個問題。

And then second is on the enterprise segment. The emerging enterprise application revenue is growing quite fast. May I ask what's the contribution to the total enterprise revenue? Thank you.

其次是企業領域。新興企業應用收入成長相當快速。請問對企業總收入的貢獻有多大？謝謝。

Okay, thank you Sara. So for your first question, I think if I -- my answer is correct you, you asked whether why the profit reduced and revenue increase. As I mentioned that there are a couple of main reasons. The first reason I mean that the -- I think the composition of the satellite is the main -- one of the main reason.

好的，謝謝薩拉。因此，對於你的第一個問題，我認為如果我的答案是正確的，你會問為什麼利潤減少而收入增加。正如我所提到的，有幾個主要原因。第一個原因我的意思是──我認為衛星的組成是主要的──主要原因之一。

And other than that, I think as that our policy this year that we -- the corporate have a new decision to improve the talent pool. So the employee cost increased dramatically. So it is across all segments. So this is the second main factor.

除此之外，我認為我們今年的政策是，我們公司有一個新的決定來改善人才庫。因此，員工成本急劇增加。所有細分市場都是如此。所以這是第二個主要因素。

And the third factor, as you already know that the electricity cost is a major portion in our company, in particular, in like a data center or term a lot of the across the enterprise segment. And I think that the utility cost also take a compared to last year.

第三個因素，如您所知，電力成本是我們公司的主要部分，特別是在資料中心或整個企業部門的許多術語中。而且我認為與去年相比，公用事業成本也有所提高。

I think it also represent a significant portion. And the fourth one is that I think if it for consumer segment, Olympics video content also represent another reason that as I mentioned that the investment in the video content is also our company's strategic purpose.

我認為這也佔了很大一部分。第四個是，我認為如果針對消費細分市場，奧運影片內容也代表了另一個原因，正如我所提到的，對影片內容的投資也是我們公司的策略目的。

And so most of the long-term investments will end up in expense in income statement. So that is the reason that when you read the income statement, you may see the profit reduce a bit. But to us, we do not take it as a loan expense. We take it as a strategy investment for the future. Thank you.

因此，大多數長期投資最終都會在損益表中以費用形式出現。這就是為什麼當你閱讀損益表時，你可能會看到利潤減少。但對我們來說，我們並不將其視為貸款費用。我們將其視為對未來的策略投資。謝謝。

Got it. Thank you very clear. And then just a quick question like the emerging enterprise application revenue. Like what's the percentage contribution to total enterprise revenue? Thank you.

知道了。謝謝你說得很清楚。然後是一個簡單的問題，例如新興企業應用程式收入。例如對企業總收入的貢獻是多少？謝謝。

Hi Sarah. About the enterprise emerging application revenue and the total ICT revenue, we don't separately announce the percentage of our enterprise emerging application revenues versus the ICT total revenue.

嗨莎拉。關於企業新興應用收入和ICT總收入，我們沒有單獨公佈我們的企業新興應用收入佔ICT總收入的比例。

Got it. Thank you.

知道了。謝謝。

Thank you. (Operator Instructions)

謝謝。（操作員說明）

Okay. I think I can present a question we receive from our platform. The question is about that, how the company can -- what's the company's strategy to increase the revenue or the revenue increase strategy going forward?

好的。我想我可以提出一個我們從平台收到的問題。問題是，公司如何增加收入或未來的收入增加策略是什麼？

And another question is about the net profit decrease for the three sectors about the sectors, the net profit decrease the reasons for the decrease for the CBG and EBG, I think our CFO just answered the question. So now we will discuss the our revenue strategy -- revenue increase strategy.

還有一個問題是關於三個部門的淨利潤下降，關於部門的淨利潤下降，CBG和EBG下降的原因，我想我們的CFO剛剛回答了這個問題。所以現在我們將討論我們的收入策略—收入增加策略。

I think there are a couple. I think again that one of the purpose of the cooperation is to maximize shareholder return. And I believe that the profit is always the fundamental main purpose. So our executive team had already -- have worked hard to focus on a couple of the areas to improve our profits in the future.

我認為有幾個。我再次認為，合作的目的之一就是股東回報最大化。而我相信，利潤永遠是根本的主要目的。因此，我們的執行團隊已經努力專注於幾個領域，以提高我們未來的利潤。

So the number one is that we try to focus more on high margin products or service. So in the future that we will try to discontinue or scaling back low margin offerings which reduce the revenue but improve profits. And so this is the one area where we will try to focus and we will exit from non-profit markets or customer segments.

因此，第一個是我們嘗試更專注於高利潤產品或服務。因此，未來我們將嘗試停止或縮減低利潤產品，這將減少收入但提高利潤。因此，這是我們將努力關注的領域，我們將退出非營利市場或客戶群。

And secondly, the size of the company is quite huge. So streamline operation is also an important strategy for our new CEO and President. So our company will undertake an efforts to improve operational efficiency such as automating process, incorporate AI, and/or renegotiated supplier contract, et cetera.

其次，公司規模相當龐大。所以精簡營運也是我們新任CEO和總裁的重要策略。因此，我們公司將努力提高營運效率，例如自動化流程、納入人工智慧和/或重新談判供應商合約等。

So try to streamline operation is quite important to help us to improve our profitability. And third, for the revenue of parts, as you can see for our mobile segments, we keep going continue to grow year on year. And one main reason is because we launched a couple of the programs, something like that points and rewards redemption.

因此，嘗試簡化營運對於幫助我們提高獲利能力非常重要。第三，對於零件收入，正如您在我們的行動部門所看到的那樣，我們繼續逐年成長。一個主要原因是我們推出了一些計劃，例如積分和獎勵兌換。

And as you see, loyalty points is quite important to allow customers to earn rewards over time. And this can often be redeemed for discounts on their bills and this can help improve the customers and the users. And secondly, we will have a lot of the bundling package and many loyalty program will bundle additional service such as streaming, subscription, music, cloud storage, or even IoT device into a single plan to create more value for the customer.

正如您所看到的，忠誠度積分對於讓客戶隨著時間的推移獲得獎勵非常重要。這通常可以兌換為帳單折扣，這可以幫助改善客戶和用戶。其次，我們將有許多捆綁包，許多忠誠度計劃將串流媒體、訂閱、音樂、雲端儲存甚至物聯網設備等附加服務捆綁到一個計劃中，為客戶創造更多價值。

And third, as you know, we have a lot of -- we launched the iPhone 16, so the discounts and subsidies on 5G device. So we believe that there is still a big potential for CHT to increase the 5G penetration rate. So if we continue to implement the strategy in this loyalty program or the bunder service, we believe that we can increase the revenue and also profit.

第三，如你所知，我們有很多——我們推出了 iPhone 16，所以 5G 設備的折扣和補貼。所以我們認為CHT在提升5G普及率方面仍有很大的潛力。因此，如果我們繼續實施該忠誠度計劃或綁定服務中的策略，我們相信我們可以增加收入和利潤。

Thank you. Ladies and gentlemen, we are now in question-and-answer session. (Operator Instructions)

謝謝。女士們、先生們，我們現在進入問答環節。（操作員說明）

There is another question about what kind of the low profits of the service that will be launched? As you know that most of the iPhone sales revenue, it's low, it's negative profit, why? Because it is under the bundle program, because one of the main purpose is not just -- it is under the bundle the program. So it is not -- you may see it, so it is not really low profits.

還有一個問題，會推出什麼樣的低利潤服務呢？大家知道iPhone的銷售收入大部分都是很低的，是負利潤，為什麼呢？因為它是捆綁程序下的，因為主要目的之一不僅僅是——它是捆綁程序下的。所以它不是——你可能會看到它，所以它並不是真正的低利潤。

I mean that the under the iPhone 16, we look at on the contract basis, we do not look at on the separate basis. So if we don't really launch any low profits. So what I want to emphasize is that for all most of our enterprise segments and consumer segments, we will try to streamline operations and to see if there is any product that we can improve the operations and to reduce the cost, and we believe there is a lot of potential.

我的意思是，在 iPhone 16 下，我們以合約為基礎進行考察，而不是單獨考察。所以如果我們不真正推出的話利潤很低。所以我想強調的是，對於我們大部分的企業細分市場和消費者細分市場，我們會嘗試簡化運營，看看是否有任何產品可以改善運營並降低成本，我們相信有。潛力。

Thank you. (Operator Instructions) We are now in question-and-answer session (Operator Instructions)

謝謝。（操作員指示）我們現在進入問答環節（操作員說明）

Thank you. Okay. If there are no further questions, I will turn it back over to President Lin. Thank you.

謝謝。好的。如果沒有其他問題的話，我會轉交給林總。謝謝。

Okay. Thank you very much for your participation. Thank you very much.

好的。非常感謝您的參與。非常感謝。

Thank you, President Lin. And ladies and gentlemen, we thank you for your participation in Chunghwa Telecom conference. There will be a webcast replay within an hour. Please visit www.cht.com.tw/ir under the IR Calendar section. You may now disconnect. Thank you, and goodbye.

謝謝林總。女士們、先生們，我們感謝你們參加中華電信會議。一小時內將進行網路廣播重播。請造訪 www.cht.com.tw/ir 的 IR 日曆部分。您現在可以斷開連線。謝謝你，再見。