Far EasTone’s Annual General Meeting Highlights Impressive Financial Performance

Far EasTone Telecom (FET, stock code: 4904) held its 2023 Annual General Meeting today (31 May, 2023). Led by Chairman Douglas Hsu, President Chee Ching, and the management team, the meeting provided an overview of the company's operational achievements in 2022 and its future strategies. Despite the overall economic uncertainties, thanks to the collective efforts of all employees, FET achieved solid growth, with record-breaking total revenue, EBITDA, and net income in the past 5 years, presenting an impressive performance record.

In 2022, FET achieved consolidated total revenue of NT$89.15 billion, consolidated EBITDA (earnings before interest, taxes, depreciation, and amortization) of NT$30.79 billion, and net income of NT$9.61 billion. The year-on-year growth rates for these three indicators reached 4.5%, 9.3%, and 5.3%, respectively, all reaching near five-year highs. The year-over-year growth rates of EBITDA and net income ranked at the top in the industry. Excluding one-time non-operating income in 2021, the actual growth of net income was 22.1%, demonstrating FET's outstanding performance that surpasses global telecom peers worldwide across the UK, the US, Japan, and South Korea.

In 2022, FET achieved an EPS of NT$2.95, with all indicators surpassing financial forecasts. The achievement rates for total revenue, EBITDA, and EPS were 100.4%, 101.1%, and 104.2% respectively. FET's operational performance remained robust, maintaining a generous dividend policy. This year, FET will distribute a cash dividend of NT$3.25 per share, with a dividend payout ratio of 110%. FET has consistently maintained a dividend payout ratio exceeding 100% for 12 consecutive years. Furthermore, the company's market capitalization has increased by 17.0% year-to-date, making it a leader in the telecommunications industry.

Creating differentiated competitive advantage, leading the industry in 5G penetration across Taiwan

Chairman Douglas Hsu stated, "FET’s core mobile business has performed exceptionally well, leading the industry in 5G penetration and standing as the top among the big three telecom operators. Additionally, FET has launched numerous innovative applications in green ICT services, such as energy management systems, smart streetlights, smart campuses, and telemedicine, aiming to create a smarter life and sustainable cities across Taiwan through innovative solutions. Looking ahead, we anticipate continued competition in the telecom market. FET will persist in delivering high-quality network services and diverse innovative technological applications to establish a differentiated competitive advantage and become the consumers' top choice."

FET’s President Chee Ching stated, "FET's performance in 2022 has been impressive across various indicators, driven by the dual engines of core business growth from continuous 5G user upgrades and the strong momentum in the new economy from big data, AI, and IoT. The company has seen notable achievements in total revenue, profitability, new economy revenue, share price performance, customer recommendation, employee satisfaction, and new business development. FET's digital transformation continues to move forward., promoting sustainable development through technological prowess and agility. We are implementing smart energy-saving and low-carbon operations internally, aiming to create the 'most environmentally friendly network.' Furthermore, we are continuously developing green ICT applications to assist our business partners in digital and net-zero transformations, establishing a new sustainable paradigm in the telecommunications industry."

FET focuses on green ICT to create smart and sustainable cities, assisting businesses in energy conservation and carbon reduction, and practicing the path towards net-zero emissions.

FET has achieved a successful transformation in four years, with impressive performance in new economy services. The annual revenue growth rate in 2022 reached 18%, accounting for 19.4% of total revenue, surpassing the initial target. Among them, the demand for smart ICT services was strong, with a growth rate of 24%, surpassing the 50% share of the new economy. Cloud services and home-grown solutions stood out with annual growth rates of 38% and 29% respectively, contributing to the growth of new economy revenue.

FET combines digital twins, big data, and AI technologies to provide 3D situational awareness information, assisting managers in optimal decision-making within the realm of virtual and physical integration. This includes integrating charging stations, managing smart streetlights, and ensuring uninterrupted power supply for traffic signals. Additionally, the company has successfully implemented and utilized energy management systems (EMS) in 9 counties and cities. FET's 5G telemedicine service continues to expand, covering 12 counties, 35 townships, and serving over 30,000 individuals. This year, the Company also launched 5G telemedicine 2.0 to enhance community-based chronic disease management and long-term care services. Moreover, FET has collaborated with Kaohsiung City to develop a 3D street violence warning and AI intelligence integration surveillance platform. The Company has also introduced the first 5G slicing technology application in Taiwan with the deployment of 5G patrol cars. Furthermore, in partnership with Taipei and Penghu, FET has established 5G ambulance video surveillance cooperation across the sea. Through these initiatives, FET is actively leveraging technology to build smart and resilient cities, benefiting the people of Taiwan.

By forming strategic partnerships, FET continuously expand the economic scale and strive to become the consumers' top choice.

FET continues to strengthen its ecosystem by collaborating with top enterprises in various industries. The Company joins forces with international partners such as Microsoft, Ericsson, and Intel to enhance technological capabilities and accelerate the application of advanced technologies. FET also collaborates with municipal governments and public sectors on smart city projects. In the startup sector, the Company have established the "FET Accelerator," which has already achieved a potential business opportunity exceeding 100 million New Taiwan Dollars, accelerating the expansion of green ICT.

FET is also actively expanding its diverse consumer services. The Company collaborated with entertainment companies and exhibition service platforms to create intellectual properties (IP). With this strategic direction, FET established " Mission Entertainment" and is committed to producing and investing in high-quality Taiwanese film and television content, bringing Taiwanese content to the world stage. Furthermore, "FET’s Mobile Circle” app has been accumulated over 5 million downloads, and FET has partnered with over a hundred companies in various sectors, covering food, clothing, housing, transportation, and more. The annual purchase amount through the app has exceeded one hundred million, forming a robust mobile lifestyle ecosystem and becoming a trusted companion for consumers' lives.

In the future, if the merger between FET and Asia Pacific Telecom is successfully completed, we will have the most compatible network spectrum. The consolidation of base stations between both companies is expected to reduce redundant investments in equipment, retire outdated hardware, and implement energy-saving technologies and energy management systems. This will achieve a denser and broader network coverage in remote areas. Additionally, the merger is estimated to save 86 million kilowatt-hours of electricity annually, equivalent to the carbon absorption capacity of 110 Daan Forest Parks. The upgraded benefits and expanded economic scale will contribute to greater environmental sustainability.

FET is committed to creating the "most eco-friendly network" and establishing a new paradigm for the telecom industry.

FET is fully committed to sustainability. In 2022, the Company received over 40 ESG awards and successfully obtained 22 ISO certifications and 2 BSI international certifications. FET’s sustainability efforts have been widely recognized in various international assessments. FET has been included in the highest level of the Dow Jones Sustainability World Index for four consecutive years and listed in the Dow Jones Sustainability Emerging Markets Index for seven years in a row. In March of this year, FET officially joined the RE100 initiative, pledging to achieve 100% renewable energy usage throughout the company by 2040. For three consecutive years, FET has been honored as one of the top 8% globally for climate change management performance in the CDP assessment. Furthermore, FET is the only telecom operator in Taiwan to have passed the SBTi 1.5-degree scenario analysis, showcasing FET's world-class commitment and achievements in sustainable business practices.

FET is the first telecom operator in Taiwan to join Ericsson's "Product Take-Back Program"; the recycling rate exceeds 98%, with over 10,000 devices recycled, surpassing the target. FET has also initiated the "Supply Chain Carbon Footprint Assessment" and committed to achieving a 16% reduction in supply chain emissions by 2030. FET is also the first telecommunications provider to pass ISO 20400 Sustainable Procurement Guidelines. The Company collaborates with vendors to promote the "Circular Economy Workshop" and jointly creates innovative models and applications for the circular economy.

FET deeply integrates ESG practices through technology and concrete actions, leading the way from intelligence to sustainability. The Company utilizes AI and big data for 5G base station site selection, precise deployment, and optimization of the 5G network, maximizing network efficiency. Through intelligent frequency mixing and dormant technologies, FET reduces base station power consumption, achieving up to 46% energy savings, equivalent to an annual reduction of approximately 50,000 metric tons of carbon emissions. Additionally, AI and big data are used to dynamically adjust air conditioning in Data Centers, resulting in savings of approximately one million kilowatt-hours per year. FET is also developing a smart building management platform for intelligent environmental control and sustainable energy management.

Looking ahead, FET, built upon its telecom foundation, is transforming into a new economy technology service company. The Company aims to provide consumers with a world that is more convenient, secure, warm, and sustainable. FET aspires to connect you and me in this world, making it a better place. When it comes to businesses, FET embraces state-of-the-art information and communication technology to assist every enterprise in enhancing productivity, competitiveness, and sustainability. FET strives to be the best partner for digital transformation, ensuring that business stays up-to-date with the latest advancements. Furthermore, FET is committed to making substantial contributions to consumers, social welfare, and environmental sustainability.