China Mobile Limited Announces 2015 Interim Results Industry Leading in Revenue Growth with Favorable Profitability
- Operating revenue was RMB340.7 billion, up by 4.9%, of which, revenue from telecommunications services was RMB299.5 billion, up by 0.5%
- EBITDA1 was RMB126.9 billion, up by 7.3%
- Profit attributable to equity shareholders was RMB57.3 billion, down by 0.8%
- Total customers over 810 million, up by 3.4%
- Payment of an interim dividend of HK$1.525 per share. The Company’s planned dividend payout ratio for the full year of 2015 is 43%
China Mobile Limited (hereinafter the “Company” or the “Group”) (HKEx:941) (NYSE:CHL) announces its 2015 interim results today. paragraph In the first half of 2015, amidst the complex competitive landscape, the Group proactively seized the good opportunities brought by the “Internet+” Plan, aligned with the development trends of three growth curves in voice, data traffic and digital services, further advanced strategic transformation, accelerated business redeployment and innovation, persistently bolstered its leading advantages in 4G business, fostered digital services and improved quality and efficiency, demonstrating a sound growth momentum. The Group led the industry in terms of revenue growth and maintained favorable profitability.
In the first half of 2015, the Group’s operating revenue recorded a favorable growth and reached RMB340.7 billion, up by 4.9% over the same period last year, of which, revenue from telecommunications services was RMB299.5 billion, up by 0.5% over the same period last year. Driven by the rapid development of 4G business, data business continued to maintain a positive growth momentum with revenue of RMB151.5 billion, up by 24.3% over the same period last year, and as a percentage of revenue from telecommunications services increased to 50.6%. The revenue structure was further optimized, of which, revenue from wireless data traffic reached RMB100.9 billion, up by 40.1% over the same period last year and was the primary driver of the growth of revenue. In addition to the endeavor of increasing revenue, the Group further reinforced cost reduction and efficiency enhancement, deepened the transformation of marketing and sales model, strictly controlled administrative expenses and the results are favorable and continuously maintained favorable profitability. Profit attributable to equity shareholders decreased by 0.8% over the same period last year to RMB57.3 billion, and the margin of profit attributable to equity shareholders was 16.8%. EBITDA increased by 7.3% over the same period last year to RMB126.9 billion, and EBITDA margin2 was 37.2%. EBITDA was 42.4% of revenue from telecommunications services.
Focusing on 4G quality network construction, the Group continues improving its capabilities in network and marketing and rapidly expanding its 4G customer base to consolidate its leading position in 4G development. In the first half of 2015, the number of the Group’s 4G base stations reached 940,000. Keeping enhancing its network capability and coverage, the Group achieved the world’s largest 4G network covering a population of more than one billion people, realizing nationwide continuous coverage in almost all cities and counties as well as data hotspot coverage in developed rural towns and villages. The Group proactively guided the development of the device supply chain to launch 4G devices of more diversified models at more affordable prices. In the first half of 2015, 140 million 4G handsets had been sold through all distribution channels. The Group accelerated its customer migration to 4G network by promoting the integrated marketing of devices, USIM cards and 4G tariff plans. The number of its 4G customers demonstrated an accelerating growth momentum, and a net increase of 99.6 million customers was recorded in the first half of 2015. As at the end of June 2015, its 4G customer base reached 190 million, accounting for 23% of its total number of customers, and its 4G customers’ DOU reached 704MB. Meanwhile, the Group has launched 4G international roaming services in 82 countries and regions and accelerated the global development of TD-LTE through the efforts of GTI (Global TD-LTE Initiative).
Seizing the opportunities arising from the 4G developments, the Group actively expanded the market focusing on the three major drivers of operations, namely, existing customers and business, data traffic and corporate customer services, and maintained stable growth in business development. In terms of existing customers and business, the Group maintained a stable customer base and advantages in customer scale. As at the end of June 2015, the Group had over 810 million customers, representing a growth of 10.56 million customers as compared with the end of 2014. The Group achieved notable increase in data traffic operation and transition from voice-centric to data-centric operations. In the first half of 2015, the Group’s data traffic increased by 154% as compared with the same period last year. The Group diversified its products designed for corporate customers and achieved a rapid growth in revenue, with a notable increase in market shares.
In view of the Group’s operating results in the first half of 2015, and taking into consideration of its long-term sustainable development, the Board declared an interim dividend of HK$1.525 per share in accordance with the dividend payout ratio planned for the full financial year of 2015. The Board believes that the Company’s favorable profitability and healthy cash flow generating capability will be able to provide sufficient support to its future development, while providing shareholders with a favorable return.
Looking ahead, the Chinese government’s promotion of the “Internet+” Plan will lead information consumption to become an emerging area with rapid growth. In the Internet of Everything era, everything including human beings, objects, locations, data will be re-organized and re-connected, which opens up a broad market for digital services, brings broad space for the sustainable development of the information and communication industry and provides unprecedented opportunities for the Company’s development.
Nonetheless, the Company is facing severe challenges from intensified competition in three aspects. With respect to competition in Internet, the operators are facing with the pressure of business substitution of internet companies, the competition for customers as well as network bypass and reshaping of the industry landscape. With respect to cross-industry competition, the manufacturers of network equipment and devices are attempting to enter the field of operation. With respect to competition within the industry, the competition among operators focusing on existing customers and business and data traffic is further intensified, thus its leading window period in 4G is shortened under the growing competition. In addition, changes of customer demand leading to the adjustments of tariff policy will bring considerable impacts on its development.
Looking ahead, the Group will focus on the strategic vision of “Mobile Changes Life, Build Quality Smart Pipe, Become A Trustworthy Digital Services Expert”, firmly seize the favorable opportunities arising during the golden period of data traffic operation for developing digital services, continue to adhere to quality and efficiency, and promote business redeployment and innovation. The Group will further bolster its leading advantages in 4G business and accelerate the development of fostering digital services. By carrying out industrial layout, capacity building, integrated innovation and reform drive, the Group will continue expanding its market share in daily life services oriented to individual customers and information services oriented to all industries to build its new advantages for competition and development.
Certain statements contained in this press release may be viewed as “forward-looking statements” within the meaning of Section 27A of the U.S. Securities Act of 1933, as amended, and Section 21E of the U.S. Securities Exchange Act of 1934, as amended. Such forward-looking statements involve known and unknown risks, uncertainties and other factors, which may cause the actual performance, financial condition or results of operations of the Company to be materially different from any future performance, financial condition or results of operations implied by such forward-looking statements. Further information regarding these risks, uncertainties and other factors is included in the Company’s most recent Annual Report on Form 20-F filed with the U.S. Securities and Exchange Commission (the “SEC”) and in the Company’s other filings with the SEC.
1 The Company defines EBITDA as profit for the period before taxation, share of profit of associates, finance costs, interest income, non-operating income (net), depreciation and amortization of other intangible assets.
2 EBITDA margin = EBITDA/Operating revenue
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