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

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

The Board has recommended a final dividend of HK17.0 cents per share for 2021. Together with the 2021 interim dividend of HK5.5 cents 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 CITIC Telecom, said, “In 2021, the Company faced a lot of challenges in the business environment, as the global economic conditions remained austere and complicated, while the society and the economy continued to be subject to the impact of the COVID-19 pandemic. The management team and all employees remained cool-headed and focused on innovative development, maintaining stable development of existing business, accelerating the achievement of new breakthroughs and driving new growth. The Group continued to build a strong team 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 healthy financial position and a strong cash flow. As at 31 December 2021, the Group recorded cash and deposits of approximately HK$1,793 million, sufficient to meet its financial obligations and contractual capital commitments in the coming 12 months.

Business Highlights

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

Revenue from internet business increased as driven by rising business internet requirements. The Group’s internet services revenue amounted to HK$1,243 million for 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 fibre broadband service as a result of the service upgrade by existing customers and around 1.8% increase in the average number of broadband users to approximately 200,000 subscribers when compared to the previous year. Moreover, revenue from the Group's data centre continued to grow. The construction of CITIC Telecom Tower Data Centre Phase III (B) was smoothly completed in June 2021 with Tier III accreditation for data centre infrastructure issued by Uptime Institute, a standardisation organisation for data centres.

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

Bolstering the enterprise solutions market in line with customer requirements. The Group maintained its existing business strengths, empowered its cloud, network and security products through intelligence enablement, and vigorously expanded its innovative business. CITIC Telecom International CPC Limited (“CPC”), a subsidiary of the Group, expanded its internet access business and SD-WAN solutions business to help corporate customers meet the challenges of mobility and digitalisation with innovative services. The Group continued to experience encouraging 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 ongoing full effort to expand in the regional market. During the year, the Group further enhanced the efficiency of its Southeast Asian subsidiaries following a structural optimisation and reorganisation exercise in order to seek expansion in the Southeast Asian market with full force. The Group’ s subsidiary in the Philippines has become operational and contributed to additional revenue to the Group. The Group’ s subsidiary in Indonesia has commenced the process of applying for a local ISP license in a bid to explore new business frontiers.

Development Strategies

In Year 2022, the development of the global pandemic will remain subject to many uncertainties and the economic outlook will remain grim and complicated. The Group will seize the opportunities for development created by the new engine of the digital economy and actively participate in the construction of the digital economy with innovative products, services, models and ecosystems.

According to 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 systems to ensure the prompt launch of 5G services ahead of its peers in the market. CTM will actively commence the research and development of 5G+ cloud applications and continue to invest in the construction of “Digital Macau”, working in close collaboration with various sectors in the community to drive the development of smart city in Macau.

The Group will closely monitor new requirements of corporate customers in industrial digitalisation and maintain its existing strength in services, while improving its SD-WAN and cloud servicing regime and enhancing development of capabilities in data centre, cloud service centre and information security service centre. The Group will drive the development of intelligent innovation to 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.

The Group will continue to enhance strategic cooperation with Chinese and international telecoms carriers, internet enterprises or other key major customers and procure development of the functions and business of “cross-border mobile communication service platform”, “enterprise messaging service platform” and “global data volume trading platform”, while making major efforts to explore new businesses and sectors such as IPX and the Internet of Things.

Also, the Group will vigorously seize development opportunities in Greater Bay Area and Southeast Asia. The Group will maintain close communication with pertinent government authorities on the national “Master Plan for the Construction of Hengqin Guangdong Macao In-depth Cooperation Zone” to identify and explore opportunities for development in Hengqin Guangdong Macao In-depth Cooperation Zone and contribute to the integrated development of Zhuhai and Macau. For Southeast 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. CAI Dawei, Chief Executive Officer of CITIC Telecom, said, “In 2022, the Group will seize new opportunities for the development of the digital economy based on high-quality services, and implement the ‘ICT-MiiND’ development strategy with a special focus on innovation targeted at new frontiers such as cloud-net integration, digital transformation and industry application in a full effort to develop a ‘cloud, network, intelligence and security’ platform. We will facilitate the development of a research and development regime across Hong Kong, Guangzhou and Zhuhai (Macau), in line with the positioning of the Guangdong-Hong Kong-Macao Greater Bay Area as 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.”