Taiwan Mobile declares record margins for May

Taiwan Mobile Co (台灣大哥大), the nation's No. 3 mobile operator, said yesterday that margins excluding tax and depreciation set a six-month record last month on improved cost efficiency, which would help the company achieve its second-quarter financial forecast.

The EBITA margin, an approximate measure of a company's operating cash flow, rallied to 46.73 percent last month.

That brought consolidated net income up by around 21 percent to NT$1.53 billion (US$47.2 million) last month, from NT$1.26 billion in April -- ?flat compared to earnings a year ago. Sales were almost unchanged at NT$4.95 billion versus NT$5.02 billion last year.

Taiwan Mobile president Harvey Chang (張孝威) said improving cost efficiency was the main factor behind the significant growth, as the mobile market was quite stable in Taiwan.

"Though the momentum overall in the mobile industry is weakening, the company has been making every effort to effectively use its expenses," Chang said in a statement released yesterday.

"We expect to hit the second-quarter target in terms of after-tax profits," he added.

Taiwan Mobile forecast in April that pre-tax income for the second-quarter would increase by 54 percent to around NT$5 billion from NT$3.23 billion in the first three months of the year.

With substantial progress last month, Taiwan Mobile is catching its nearest rival Far EasTone Telecommunications Co (遠傳電信), but still lagging behind Chunghwa Telecom Co (中華電信).

Chunghwa Telecom, the nation's top phone company, posted a 15-percent drop at NT$3.7 billion in net income, or NT$0.39 a share, for last month, compared to NT$4.4 billion in April, according to the operator's statistics. Last month's figure deducted from January-April net income. The company did not provide year-on-year figures for comparison.

Chunghwa Telecom chief financial officer Hank Wang (王漢朝) said in a phone interview yesterday that the company was still reviewing the results and could not give a specific reason for the decline.

Sales last month dropped 3 percent to NT$15 billion from April. Chunghwa Telecom projected that net income for this year would slide to NT$44.2 billion, or NT$4.56 a share, from last year. Sales are expected to be flat at NT$184.2 billion versus NT$183.38 billion.

Far EasTone, however, posted a 2-percent increase in pre-tax income to NT$1.45 billion, or NT$0.38 a share, for last month, compared to NT$1.42 billion. Sales also grew 4 percent during the same period.

On the Taiwan Stock Exchange, shares of Far EasTone and Chunghwa Telecom rose 2.43 percent and 1.86 percent to NT$37.9 and NT$60.3 respectively, while Taiwan Mobile shares lost 1.96 percent to NT$30.