CITIC Telecom Announces 2021 Annual Results. Reports stability and progress in overall performance with record high business results

CITIC Telecom Announces 2021 Annual Results

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Reports stability and progress in overall performance with record high business results
Profit attributable to equity shareholders reaches HK$1,076 million
Total dividends per share rises by 7.1% yoy to HK22.5 cents

(15 March 2022, Hong Kong) — CITICTelecom International Holdings Limited (“CITIC Telecom” or the “Group”;stock code: 1883), Asia-leading multinational internet-oriented telecommunicationsenterpriseproviding comprehensive services, reported profit attributable to equity shareholders of HK$1,076million for the year ended 31 December 2021, representing a year-on-yearincrease of 5.2%, or a 2.0% increase if the effect of investment propertyvaluation is excluded.

The Group’s total revenue amounted to HK$9,486million, representing a year-on-year increase of 6.3%compared to the previous year. The Group reported HK$7,905 million in revenuefrom its telecommunications services, similar to that of the previous year. Basicearnings per share was up 5.0% to HK29.3 cents.

The Board has recommended a final dividend of HK17.0cents per share for 2021. Together with the 2021 interim dividend of HK5.5cents per share, total dividends per share for 2021 amounted to HK22.5 cents,representing a 7.1% growth over the previous year.

Mr. XIN Yue Jiang, Chairman of CITICTelecom,said, “In 2021, the Company faced a lot of challenges in the businessenvironment, as the global economic conditions remained austere andcomplicated, while the society and the economy continued to be subject to theimpact of the COVID-19 pandemic. The management team and all employees remainedcool-headed and focused on innovative development, maintaining stabledevelopment of existing business, accelerating the achievement of newbreakthroughs and driving new growth. The Group continued to build a strongteam and demonstrated a spirit of striving for progress by promoting the corporate culture of ‘solidarity, coordination, inclusivity and charity’. The Group increased technological innovation, improved its operations management, fulfilled its social responsibility and vigorously planned for the future. The Group reported great achievements in business development, product research and development, network quality and epidemic prevention and control. In 2021, its overall operation grew steadily and achieved record high business results, delivering greater returns to shareholders.

The Group has maintained a healthyfinancial position and a strong cash flow. As at 31 December 2021, the Grouprecorded cash and deposits of approximately HK$1,793 million, sufficient tomeet its financial obligations and contractual capital commitments in thecoming 12 months.

Business Highlights

Companhia deTelecomunicações de Macau, S.A.R.L. (“CTM”) completed the second phase of 5Gnetwork construction to become the first carrier in Macau achieving full indoorand outdoor 5G signal coverage. CTM actively introduced 5G products and 5G roaming tests wereconducted and 5G roaming agreements were reached with carriers from differentcountries and regions in a bid to ensure full preparation for the 5G era. CTMgrasped market demand, sales of mobile handsets and equipment surged 67.3%year-on-year to HK$1,581 million. The continuing pandemic adversely impactedthe Group’s roaming related services revenue. The Group’s mobile servicesrevenue dropped 10.3% to HK$858 million when compared to the previous year. The Macau City Smart Database (Big Data Platform) developedby CTM on a proprietary basis has been commissioned for commercial applicationto provide data analysis and policy support for relevant departments of theMacau SAR Government, and application will be further extended to moreindustries.

Revenue frominternet business increased as driven by rising business internet requirements. The Group’s internet services revenue amounted to HK$1,243 millionfor the year which represented a year-on-year increase of 10.7%. The increase was mainly driven by business internet requirements and the increase in revenue from fibrebroadband service as a result of the service upgrade by existing customers andaround 1.8% increase in the average number of broadband users to approximately200,000 subscribers when compared to the previous year. Moreover, revenue fromthe Group's data centre continued to grow. The construction of CITIC Telecom Tower Data Centre Phase III (B) wassmoothly completed in June 2021 with Tier III accreditation for data centreinfrastructure issued by Uptime Institute, a standardisation organisation fordata centres.

Growth momentum sustained in messagingservices revenue by seizing market opportunities. Revenue from international telecommunications services amounted toHK$2,461 million, similar to that of last year. Due to increasing demand from enterprisemessaging delivery, messaging services revenue surged 33.4% to HK$1,678 millionwhen compared to the previous year.

Bolstering theenterprise solutions market in line with customer requirements. The Groupmaintained its existing business strengths, empowered its cloud, network andsecurity products through intelligence enablement, and vigorously expanded itsinnovative business. CITIC Telecom International CPC Limited (“CPC”), asubsidiary of the Group, expanded its internet access business and SD-WANsolutions business to help corporate customers meet the challenges of mobilityand digitalisation with innovative services. The Group continued to experienceencouraging growth in its enterprise solutions services in Mainland China.However, due to the impact of the pandemic, the progress of the Group’s projects in Macau and Southeast Asia was delayed, resulting in a 1.9% decrease in enterprise solutions revenue to HK$3,165 million when compared to the previous year.

Optimised structure of Southeast Asian subsidiaries in an ongoingfull effort to expand in the regional market. During theyear, the Group further enhanced the efficiency of its Southeast Asiansubsidiaries following a structural optimisation and reorganisation exercise inorder to seek expansion in the Southeast Asian market with full force. TheGroup’ s subsidiary in the Philippines has become operational and contributedto additional revenue to the Group. The Group’ s subsidiary in Indonesia hascommenced the process of applying for a local ISP license in a bid to explorenew business frontiers.

Development Strategies

In Year2022, the development of the global pandemic will remain subject to manyuncertainties and the economic outlook will remain grim and complicated. TheGroup will seize the opportunities for development created by the new engine ofthe digital economy and actively participate in the construction of the digitaleconomy with innovative products, services, models and ecosystems.

Accordingto its policy address, the Macau SAR Government will issue 5G licenses in 2022.CTM will continue to optimise and improve its 5G network and ancillary systemsto ensure the prompt launch of 5G services ahead of its peers in the market.CTM will actively commence the research and development of 5G+ cloudapplications and continue to invest in the construction of “Digital Macau”,working in close collaboration with various sectors in the community to drivethe development of smart city in Macau.

TheGroup will closely monitor new requirements of corporate customers inindustrial digitalisation and maintain its existing strength in services, whileimproving its SD-WAN and cloud servicing regime and enhancing development ofcapabilities in data centre, cloud service centre and information securityservice centre. The Group will drive the development of intelligent innovationto facilitate intelligence enablement for cloud, network and security products,while enhancing abilities in industrial digitalisation such as service industry applications and smart city construction, in order to fulfil new requirements in cloud migration, data tool application and intelligence enablement.

TheGroup will continue to enhance strategic cooperation with Chinese and internationaltelecoms carriers, internet enterprises or other key major customers andprocure development of the functions and business of “cross-border mobilecommunication service platform”, “enterprise messaging service platform” and“global data volume trading platform”, while making major efforts to explorenew businesses and sectors such as IPX and the Internet of Things.

Also,the Group will vigorously seize development opportunities in Greater Bay Areaand Southeast Asia. The Group will maintain close communication with pertinentgovernment authorities on the national “Master Plan for the Construction ofHengqin Guangdong Macao In-depth Cooperation Zone” to identify and exploreopportunities for development in Hengqin Guangdong Macao In-depth CooperationZone and contribute to the integrated development of Zhuhai and Macau. ForSoutheast Asia, the Group will seize opportunities for development presented by the Regional Comprehensive Economic Partnership (RCEP) in close tandem with the requirements of multinational corporations that seek to establish their presence in Southeast Asia, and to identify market potential and expand in the Southeast Asian market with full effort.

Mr. CAIDawei, Chief Executive Officer of CITIC Telecom, said, “In 2022, the Group will seize new opportunities for thedevelopment of the digital economy based on high-quality services, and implementthe ‘ICT-MiiND’ development strategy with a special focus on innovationtargeted at new frontiers such as cloud-net integration, digital transformationand industry application in a full effort to develop a ‘cloud, network,intelligence and security’ platform. We will facilitate the development of aresearch and development regime across Hong Kong, Guangzhou and Zhuhai (Macau),in line with the positioning of the Guangdong-Hong Kong-Macao Greater Bay Areaas a ‘talent centre and command post for innovation’. The Group will increase investment in research and development continuously to enhance its competence in proprietary technology research and development, and make technological contributions to digital economic development, actively positioning itself in major national development plans such as ‘Belt and Road’ and Guangdong-Hong Kong-Macao Greater Bay Area as an enterprise based in Hong Kong and Macau, and accelerate development with innovation and synergies to deliver new value to shareholders.”