CITIC Telecom Announces 2024 Interim Results

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Total revenue reached HK$4,889  million
 with profit attributable to equity  shareholders of HK$455 million
 Interim dividend of HK6.0 cents per share

(16 August 2024, Hong  Kong) — CITIC Telecom International  Holdings Limited (“CITIC Telecom” or the “Group”; stock code: 1883),  Asia-Pacific leading multinational internet-oriented telecommunications  enterprise providing comprehensive services, has announced its unaudited  interim results for the six months ended 30 June 2024 (the "Period").

The  Group recorded total revenue of HK$4,889 million (1H2023: HK$5,326 million), profit  attributable to equity shareholders of HK$455 million (1H2023: HK$721 million),  and basic earnings per share of HK12.3 cents (1H2023: HK19.5 cents). In response to changes in various  external factors, some customers have made corresponding adjustments to their  businesses since the second half of 2023, which resulted in a substantial decrease  in revenue from messaging services in international telecommunications services  during the Period, leading revenue from the Group’s principal business of  telecommunications services declined by 11.3% year-on-year to HK$4,160 million.  Revenue from mobile services, internet services and enterprise solutions  increased, which alleviated some of the downward pressure and demonstrated  the Group’s strong business resilience and growth potential.

The Board declared an  interim dividend of HK6.0 cents per share for 2024, which is in line with the  corresponding period of the previous year.

Mr. LUO Xicheng, Chairman of  CITIC Telecom, said, “In the first half of 2024, in response to  various external challenges, the  entire Group made concerted efforts to uphold integrity and  innovation and forge ahead, demonstrating firm determination and resilience for development.  While continuing to consolidate its traditional telecommunications business, the  Group is striving to seize the opportunities arising from the deep integration  of the real economy and the digital economy driven by the next-generation  reform of information technology, deepen transformation and innovation, and  facilitate business transformation and development through digitalisation and  intelligentisation, so as to mitigate the impact.”

The Group has maintained  a healthy financial position and stable cash flows. As at 30 June 2024, the  Group recorded cash and deposits of approximately HK$1,561 million. The cash  and deposits balance and undrawn committed bank and other loan facilities are  sufficient to meet the financial requirements and contractual capital  commitments for the next twelve months. As at 30 June 2024, the Group’s net  debt amounted to HK$2,363 million and the net gearing ratio amounted to 18% (at  the end of 2023: 17%).

Business Highlights

Companhia  de Telecomunicações de Macau, S.A.R.L. (“CTM”) consolidated the scale  advantages of “5G+Broadband”, focusing on user value and technology upgrades. By the end of June 2024, CTM's share of Macau’s mobile market had reached  50.0%, firmly ranking first. The number of 5G users exceeded 620,000, with a  penetration rate of 87.9%. In July 2024, CTM launched 5.5G commercial services,  propelling Macau into the “5.5G Era” and making it one of the first 5.5G  commercialised cities in the world.

Meanwhile, CTM actively  empowered customers from various sectors such as government affairs,  enterprises, education, healthcare, and finance in their digitalisation  upgrades. As at the end of June 2024, CTM has launched a total of 9 5G private  network solutions and implemented 13 smart application scenarios, such as the  launch of “Dr. Easy”, the one-stop smart healthcare solution. As at the end of  June 2024, CTM has launched bilateral 5G roaming services with 140 overseas  network operators (covering 104 countries/regions), bilateral 4G roaming  services with 392 overseas network operators (covering 221 countries/regions)  and bilateral VoLTE roaming services with 39 overseas network operators  (covering 44 countries/regions).

Revenue from mobile  sales and services, including revenue from sales of mobile handsets and  equipment and revenue from mobile services, increased by 13.4% year-on-year to  HK$1,239 million. Benefiting from the increase in roaming revenue and the  increase in the number of mobile subscribers, the Group’s mobile services  revenue amounted to HK$510 million, representing an increase of 11.6% over the  corresponding period of last year.

Demand  for internet and data centre services continued to grow. During  the Period, CTM continued to promote customer service upgrades with Fibre-to-the-room  solutions. As at the end of June 2024, CTM maintained its top ranking in  Macau’s broadband services sector with a market share of 97.0%. According to  the broadband network test report published by the international website  cable.co.uk in July 2024, Macau ranked third in the world in terms of average  fixed broadband download speed at 234.74Mbps. The Group’s internet services  revenue amounted to HK$737 million, representing a year-on-year increase of  4.5%.

The  voice services business achieved significant growth and the revenue from the“DataMall自由行” business continued to increase. International  telecommunications services revenue, which includes revenue from messaging  services, voice services and “DataMall自由行”  services, was HK$1,237 million (1H 2023: HK$1,951 million). Since the second half of 2023,  certain customers have made corresponding adjustments to their businesses, which  adversely impacted the Group’s messaging services revenue. However,  the Group successfully achieved a significant increase in its voice services  revenue by 74.6% year-on-year to HK$899 million, which partially offset the decline  in messaging services revenue. In addition, revenue from “DataMall自由行” services continued its  growth momentum and achieved an increase of 19.6% to HK$67 million when  compared with the corresponding period of last year.

Enterprise  solutions revenue increased steadily. During the  first half of 2024, revenue from enterprise solutions increased by 6.8%  year-on-year to HK$1,608 million, mainly due to an increase in the number of  projects awarded to the Group by the government and enterprises in Macau and  Southeast Asian countries (including Singapore, Malaysia, Thailand and  Indonesia), which offset the decline in the Group’s enterprise solutions  revenue in the Chinese mainland market.

Facilitated  the integration of “Cloud, Network, Intelligence and Security” and enhanced  competitiveness by diversified products. CITIC Telecom International CPC  Limited, a subsidiary of the Group, facilitated the rapid development of new  businesses and developed diversified revenue streams through cross-selling  “Cloud, Network, Intelligence and Security” products to customers. It integrated  core technologies such as Large Language Model, AI and data algorithm platforms  to enhance the intelligent and automation capabilities of existing core  products, thus creating differentiated competitive advantages by focusing on  the “ICT- MiiND™” strategy. It also developed an AI service platform to provide  comprehensive open services for data processing and model development, and  continued to expand its network coverage, deployed the first network point-of-presence  (PoP) in Dubai, UAE, and adding the second PoP in Amsterdam, the Netherlands. As at the end of June 2024, the  virtual private network service covered 160 countries and regions worldwide  with nearly 170 PoPs.

Developed  new markets through globalisation strategy and fully explored new business  opportunities overseas. During the Period, Acclivis Technologies and Solutions Pte. Ltd., a  subsidiary of the Group, further accelerated its expansion  in the Southeast Asian market. In Singapore, it partnered with a globally  renowned major hardware provider to offer server deployment to local customers.  In Malaysia, it completed several data centre ICT projects.

Actively  promoted expansion into new domains. In the first half of  2024, the Group and CTM officially joined the Open Gateway development  Initiative launched by GSMA and won the first prize in the Open Gateway  Programming Marathon during the Mobile World Congress Shanghai 2024,  demonstrating the Group's technological accumulation and innovative  capabilities in this field, as well as garnering the attention of the industry  and partners.

Development Strategies

Going forward, the Group  will continue to adhere to the innovation-driven and market-oriented approach,  strengthen its technological leadership, proactively respond to the challenges  of the global economic environment, seize the strategic development  opportunities brought about by the new round of technological and industrial  revolutions in the information and communications industry, and strive to  expand into new fields and new markets, so as to inject a steady stream of impetus  for the enterprise’s high-quality development, and make every effort to develop  into a “world-class internet-oriented integrated digital and intelligent  telecommunications enterprise”.

The Group will leverage  the leading advantages of 5G and participate in the construction of “Digital  Macau 3.0”. Through the application of 5.5G technology and the leading digital  base of smart cities, CTM will introduce and create more smart application  solutions for Macau, explore diversified and innovative services, and help all  sectors in Macau to accelerate the pace of digital transformation and promote  the construction of “Digital Macau 3.0”.

The Group will comprehensively deepen digital transformation and upgrading,  and promote the development of new quality productive forces. Based on the  existing integrated platform of “Cloud, Network, Intelligence and Security”,  the Group will integrate emerging technologies such as Large Language Model,  big data algorithms and AI to continuously enrich its digital intelligent  services and product portfolio, and support its global customers in their  digital transformation and intelligent development. Meanwhile, the Group will  actively implement the GSMA Open Gateway development concept, work with global  industry partners to create and build a capacity sharing platform, and actively  participate in Open Gateway industry innovation to promote technological  upgrades, enrich application scenarios and create new business opportunities.

The Group will also further strengthen its global  business presence and empower all industries to expand internationally in an  intelligent manner. Adhering closely to the strategic positioning of “With the  backing of the Mainland, Setting a foothold in Hong Kong and Macau, and Connecting  to the World”, the Group will expand its global business presence, further  strengthen its efforts in mature markets such as Hong Kong and Macau, fully  implement the “Belt and Road” strategy of high-quality development, and expand  into emerging markets such as Southeast Asia and BRIC countries. The Group is  committed to becoming a digital intelligent partner for enterprises to “go  global” and “draw in new opportunities”, thereby empowering the global development  of all industries.

Mr. LUO Xicheng, Chairman of CITIC Telecom, said, “Currently, the ongoing  technological and industrial revolutions is accelerating, while the digital  economy is burgeoning, portending ever-expanding vistas of industry development  and a proliferation of emergent opportunities. The Group has a decades-long development foundation in the industry and has gained wide recognition in the market.  Relying on our accumulated strengths in the industry, we will continue to advance  into new domains such as AI+, Data Element X and IoT, constantly deepen the  close cooperation with strategic partners, operators and research institutions,  seize market opportunities, accelerate transformation and innovation, and vigorously  expand new markets and customer bases to promote the Group’s long-term healthy  and high-quality development and  continuously create greater value for shareholders and the society.”

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About CITIC Telecom  International Holdings Limited (stock code: 1883)

CITIC Telecom International Holdings Limited  was established in 1997 in Hong Kong, and it was listed on The Stock Exchange  of Hong Kong Limited on 3 April 2007. As one of the largest international  telecommunications hubs in Asia Pacific, the Group provides full-scale  international telecommunications services to carrier clients around the globe,  and integrated enterprise services in Southeast Asia through its wholly-owned  subsidiary Acclivis Technologies and Solutions Pte. Ltd. CITIC Telecom  International CPC Limited (“CPC”), the Group’s other wholly-owned subsidiary,  provides end-to-end information and communications technology solutions to  international corporate clients and business clients. CPC is one of the most  trusted partners of these clients in the Asia-Pacific region and provides a  full range of ICT services to major enterprises and multinational corporate  clients in Chinese mainland through its subsidiary, China Enterprise ICT  Solutions Limited. The Group holds 99% equity interest in Companhia de  Telecomunicações de Macau, S.A.R.L. (“CTM”). CTM is one of the leading  integrated telecommunications services providers in Macau, and is the only full  telecommunications services and ICT services provider in Macau. With a leading  position in the market, CTM plays an important role in the ongoing development  of Macau. The Group has established branch organisations in 22 countries and  regions, with more than 2,500 staff and nearly 170 PoPs, and business serving  160 countries and regions, connecting to over 600 operators globally, and  serving around 3,000 multinational corporations and 40,000 local companies  around the globe. CITIC Group Corporation, a large multinational conglomerate  headquartered in the People’s Republic of China, is the ultimate holding  company of CITIC Telecom.

For more information, please visit: www.citictel.com.