Thu, Feb 16, 2017 - Page 12 News List

Far EasTone forecasts a 5.5% drop in net income

By Lisa Wang  /  Staff reporter

Far EasTone Telecommunications Co Ltd (遠傳電信), the nation’s No. 3 telecom, yesterday said net income this year would decline 5.5 percent annually primarily due to shrinking voice business and increases in amortization and depreciation costs from 4G licenses and equipment.

The telecom forecast that net income would fall to NT$10.76 billion (US$349.7 million) this year, compared with last year’s NT$11.39 billion and earnings per share would drop from last year’s NT$3.5 to NT$3.3.

However, the company would make every effort to exceed the forecast in terms of earnings before interest, taxes, depreciation and amortization (EBITDA) and earnings per share, Far EasTone president Yvonne Li (李彬) told an investors’ conference.

Far EasTone forecast that EBITDA would grow 1.1 percent from last year’s NT$27.84 billion to NT$28.15 billion.

Responding to an investor’s concern about a poor pricing environment and an erosion of low-cost flat rates for 4G services, Li said the company recently launched a new higher-price plan to cope with price competition.

The new rate carries a minimum monthly fee of NT$798 for unlimited use of the firm’s 4G services in the first year of subscription, Far EasTone said, adding that the monthly charge is higher than the floor rate of NT$699 offered by the nation’s three largest telecoms.

Service revenue is expected to fall 2.8 percent annually to NT$69.6 billion, due to falling voice revenue and further reductions in mobile termination rate, Far EasTone said.

However, total revenue is to remain flat at NT$94.36 billion, aided by revenue growth, mainly from handset sales and mobile commerce, the company said.

The company said its board has approved the distribution of a cash dividend of NT$3.75 per common share, representing a 103 percent payout ratio, adding that it would stick to a high payout ratio.

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