Far EasTone Telecommunications : 2023 Revenue and Profits Hit a 7-Year High

Dominating the Industry in Profit Growth and 5G Penetration

Comprehensive AI Integration Making Consumers the Ultimate Winners

Far EasTone Telecom (FET, stock code: 4904) held its 2024 Annual General Meeting today (June 21, 2024), with Chairman Douglas Hsu leading President Chee Ching and the management team, to present the operational achievements of 2023 and future strategies. Thanks to the concerted efforts of all colleagues, FET achieved record highs in total revenue, EBITDA, net income, and EPS in the past seven years. The company's market capitalization even surpassed NT$300 billion for the first time in May of this year, delivering an impressive performance.

In 2023, FET reported consolidated total revenue of NT$93.69 billion, consolidated EBITDA (earnings before interest, taxes, depreciation, and amortization) of NT$32.082 billion, and net income of NT$11.186 billion. The year-on-year growth rates for these three indicators reached 5.1%, 4.2%, and 16.4%, respectively. For the full year 2023, EPS calculated based on the weighted average number of shares outstanding of 3.2747 billion shares, EPS was NT$3.42. The company dominate the industry with the highest year-on-year growth rates in consolidated EBITDA and net income, making it the profitability growth leader in the telecom industry.

FET's stock performance was exceptional, with a price increase of 33% and market capitalization rising by 42% since 2023, ranking first in the telecommunications industry. The company maintained a robust and generous dividend payout rate, distributing a cash dividend of NT$3.25 per share, with a payout ratio of 105%. This marks the 13th consecutive year that the dividend payout rate has exceeded 100%.

FET Market Capitalization Surpasses NT$300 Billion; Chairman Douglas Hsu: "We Strive for Excellence Regardless of Size"

FET Chairman Douglas Hsu stated, "FET aims for sustainable operations, implementing the highest standards of corporate governance to pursue shared benefits. Last November, we achieved the top position in the global telecommunications industry in the DJSI, making sustainability a new value for Taiwan. In 2023, our core telecom business and new economy, the two major growth engines, continue to accelerate. Coupled with the merger of Asia Pacific Telecom and the investment in net-zero transformation, we have gained widespread recognition, leading to our stock price growth outperforming the industry. This year, our market capitalization surpassed NT$300 billion for the first time! Facing continued competition in the telecom market, FET will leverage AI comprehensively, adhering to the principle of "We Strive for Excellence Regardless of Size," to ensure consumers are the ultimate winners!"

FET's President Chee Ching added, "With the Chairman's support, FET has consistently advanced in digital transformation, driving significant growth in both our core telecom business and new economy ventures. This year, we have reached the milestone of NT$300 billion market capitalization. Following the merger with Asia Pacific Telecom at the end of last year, we will maximize the synergies in spectrum resources, energy sustainability, and scale economy. And we focus on the four pillars of smart ICT (sustainable smart cities, telecom system integration, smart healthcare, and digital transformation). Moreover, by leveraging generative AI, we accelerate our digital and net-zero transformation, further empowering the business growth of Big Data, AI, and IoT strategy. With the synergy of the merger and the boost from AI, FET has surpassed the traditional telecom framework and is expected to reach new heights in the next three years!"

Leading the Industry in 5G Penetration, while the Revenue and Profit of the New Economy Expanded for Seven Consecutive Years

FET's telecom business continues to excel, with postpaid users showing positive growth for six consecutive years. With users steadily upgrading to 5G, the penetration rate of 5G users has returned to over 40%-surpassing the level before the merger with Asia Pacific Telecom-firmly leading the industry and aiming to exceed 45% by the end of the year. This growth has driven mobile service revenue and Average Revenue Per User (ARPU) to increase for three consecutive years, reaching a five-year high. In the first quarter of 2024, mobile service revenue achieved an impressive annual growth rate of 18.3%.

FET has successfully established a second growth curve, with the revenue and profit of the new economy expanding for seven consecutive years, accounting for approximately 20% of total revenue. By continuously optimizing information and communication technology (ICT) solutions and personal digital services, profitability has been enhanced. In 2023, new economy profit grew by 8.7% annually, and the annual growth in the first quarter of 2024 expanded to 21%. Within the new economy revenue, enterprise customers and individual users account for 54% and 46%, respectively. On the enterprise side, revenue from intelligent ICT autonomous solutions grew by an impressive 75% annually. The subsidiary Nextlink Technology (6997), specializing in cloud integration and technology services, successfully listed on the Emerging Stock Market in January, becoming a promising asset for FET. For individual users, FET's friDay Shopping, friDay Video, mobile insurance, and bill payment services have shown outstanding revenue performance, contributing to the steady growth of the new economy segment.

AI Enhances FET's "Big Data, AI, IoT" Strategy Internally and Externally for Continued Growth

FET continues to deepen its expertise in ICT, integrating generative AI into digital governance and service optimization. Our goals are to "enhance employee productivity, boost development capabilities, strengthen cybersecurity resilience, and advance business operations applications," driving growth both internally and externally. This includes the FET command center dashboard, which generates real-time reports on stock prices, market value, financial targets, revenue, EBITDA, store visit numbers, and customer behavior, achieving far greater efficiency than traditional manual report compilation. Additionally, through digital twins, we can instantly monitor network traffic and status, trigger immediate alerts for anomalies, and generate work tickets, enabling precise decision-making.

FET supports enterprise clients in their transformation and escalation across four key areas: sustainable smart cities, telecom system integration, smart healthcare, and digital transformation. In sustainable smart cities, we helped Taiwan International Ports Corporation establish a "Smart Operations Management Platform" at Kaohsiung Port Cruise Terminal, and created an "Uninterruptible Power Supply (UPS) System" for 187 intersections in Taipei City. In telecom system integration, we completed the "Backbone Fiber Construction Project" for the public sector and developed the "Nationwide Lottery Booth Mobile Network Service." In smart healthcare, the "5G Telemedicine Service" has been expanded to 15 counties and 51 towns across Taiwan, benefiting over 40,000 people. We also pioneered the "5G Ambulance" rescue service, now supporting eight counties. In digital transformation, we have assisted more than 20 enterprises in integrating generative AI applications and collaborated with international giants to build cloud, data services, and digital resilience for enterprises.

On the personal digital services front, FET continues to offer diverse and innovative services while effectively utilizing AI to attract and retain customers. According to surveys conducted by NCC, the Taiwan Creative Content Agency, and Nielsen, FET's friDay Video platform has secured the top spot for paid subscription rates among OTT platforms in Taiwan. By implementing interactive AI-generated recommendation lists, the click-through rate for these lists is eight times higher than standard recommendation lists. In addition to using AI to block scam calls and messages, the "FET Guard" service prevents users from accessing malicious websites, surpassing 600,000 subscriptions within just one year of launch. The "FET Mobile Circle" app, featuring AI-powered personalized recommendations, has achieved over 6 million users. friDay Shopping leads the e-commerce sector with its AI recommendation engine, providing consumers with a new, customized shopping experience.

Remarkable Sustainability Achievements with No. 1 Ranking in the Global Telecom Industry in the DJSI World Index

FET has long been committed to sustainable actions, consistently earning recognition from authoritative institutions both domestically and globally. FET has been ranked No.1 in the global telecom industry in the Dow Jones Sustainability World Index (DJSI World). Additionally, FET has been honored by S&P Global as one of the "Top 5% Sustainable Companies Globally," making it the top telecom company in Taiwan. It is also the only telecom company in Taiwan to receive the highest "Leadership A" grade in the CDP Climate Change Supplier Engagement assessment for four consecutive years. For ten consecutive years, FET has ranked in the top 5% of the Taiwan Stock Exchange's Corporate Governance Evaluation. Furthermore, FET officially joined RE100 in last March, pledging to use 100% renewable energy by 2040. The company is actively pursuing net-zero goals through various green energy initiatives, including expanding its self-built solar power plants.

Maximizing Merger Synergies and Aiming for Takeoff in Three Years to Redefine Telecom Industry Standards

FET and Asia Pacific Telecom officially merged on December 15 last year, with FET proactively planning the integration a year in advance. The first phase of base station integration was rapidly completed by January this year, significantly enhancing user network experience and advancing ahead of the industry. Post-merger, FET continues to maximize the three major synergies of spectrum efficiency, energy saving and carbon reduction, and scale economy. This includes leveraging its "Triple Crown" spectrum advantage (widest total bandwidth, largest continuous low-frequency bandwidth, and largest 5G bandwidth) to increase network investment efficiency.

The merger led to the decommissioning of 5,000 outdated base stations and the implementation of AI-powered energy-saving and management systems, resulting in annual savings of 86 million kWh of electricity, approximately 43,000 tons of carbon emissions, equivalent to the annual carbon absorption of about 110 Da'an Forest Parks. With the transition of former Asia Pacific users, resulting in both improved pricing plans and increased satisfaction. This has become a new driving force for growth in both telecommunications services and the new economy.

Looking ahead, FET aims to capitalize on its superior position of having the "safest, most eco-friendly, and highest-quality network" to attract more users. By empowering its ICT services and value-added offerings with generative AI, the company plans to spur further growth in the new economy. The goal is to "lay the foundation in one year, achieve results in two, and take off in three," thereby maximizing merger synergies and leading the newly transformed FET to a new milestone, redefining telecom industry standards. FET is highly confident in the positive competition of the new telecom era and is dedicated to "focusing on being the best," providing highly valuable services, and advancing towards mutual benefit with the environment, society, and shareholders.