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Chunghwa Telecom considering further share repurchase

Chunghwa Telecom Co (中華電信), the nation's biggest telephone service company, said yesterday it would not rule out extending a stock buyback program to the end of the year as part of its longer-term efforts to boost return on investment.

In the firm's first buyback program, Chunghwa Telecom spent about NT$11.5 billion (US$349.48 million) to repurchase 192 million common shares between February and April this year.

The company's net book value rose to NT$39.65 per share from the previous NT$38.86.

"We will conduct more stock repurchase programs at the proper time and proper prices," said chairman Hochen Tan (賀陳旦) during an investor conference.

After the share buybacks, Chunghwa Telecom's outstanding shares dropped nearly 2 percent to 9.46 billion shares, albeit still higher than its local rivals -- Far EasTone Telecommunications Co's (遠傳電信) 3.87 billion shares and Taiwan Mobile Co's (台灣大哥大) 4.98 billion shares.

"Chunghwa Telecom will gradually reduce its outstanding shares to a proper level ... which could be around 7 billion shares," chief executive officer Hank Wang (王漢朝) said.

Chunghwa Telecom, which is 42 percent owned by the government, may take 10 years to hit that target, Wang said.

As of yesterday, shares of Chungwha Telecom have dropped 10.6 percent to NT$54 since the beginning of this month, as the large-scale share sale was delayed from its original date in the middle of last month.

At the earliest, the plan to sell a total of about 800 million shares in the US and at home would take place late this month, the company said.

Chungwha Telecom said earlier last month that net income declined 8.8 percent to NT$22.19 billion in the first six months due to a one-time outlay for an early retirement program.

The company looked on track to achieve its full-year earnings forecast of NT$44.24 billion, which would be 7 percent lower than the NT$47.65 billion it earned last year.

Sales are expected to rise less than 0.5 percent to NT$184.2 billion this year from NT$183.38 billion last year, it said. However, it is hoping that it could raise the growth rate higher to about 1 percent.

"We are hoping for one to two percent growth," company president Lu Shyue-ching (呂學錦) said.

During the first half, Chung-hwa Telecom generated NT$90.59 billion in revenue, compared with NT$89.72 billion in the same period last year.

Chunghwa Telecom said it would stick to its goal of increasing its third-generation (3G) customer base to 800,000 users by the end of this year. It now has 520,000 3G subscribers, which is still a small share of its total mobile phone subscriber base of 8.29 million.
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