Annual Financial Review
MANAGEMENT REVIEW
We are pleased to announce that HKT recorded solid results and a steady rise in adjusted funds flow for the
year ended December 31, 2021 as the second half of the year was buoyed by government economic stimulus,
a stabilized COVID situation and a resumption of economic activities.
With demand for fast and reliable connectivity remaining strong, the Telecommunications Services ("TSS")
benefited on the back of its well-established and resilient network as well as its enterprise focused services.
The consumer broadband business witnessed an expansion in its subscriber base with further subscriptions to
its fiber-to-the-home ("FTTH”) services and take-up of Home Wi-Fi solutions lifting average revenue per
user ("ARPU"). The enterprise segment demonstrated robust growth as enterprise customers accelerated their
digital transformation during the year. As a result, the local data services business registered 4% growth in
revenue during the year. The International Telecommunications Services business was impacted by a
moderation in wholesale voice revenue and the absence of lumpy one-off cable revenues from the prior year.
Consequently, total TSS revenue edged down by 2% to HK$21,812 million. However, after excluding the
International Telecommunications Services business, revenue from our local TSS business increased by 1%
year-on-year. Total TSS EBITDA increased by 1% to HK$8,468 million with the margin improving to 39%,
reflecting the shift in revenue mix towards local data services and productivity improvements achieved
during the year.
The Mobile business recorded healthy 13% growth in total revenue to HK$11,748 million during the year.
The 2% growth in local core revenue reflected the ARPU uplift from new subscriptions and upgrades to our
5G plans as well as a continued expansion in our customer base. Roaming overhang persisted due to the strict
travel conditions in Hong Kong which partially offset the local revenue growth resulting in Mobile services
revenue growth of 1%. Mobile product sales returned to more than pre-pandemic levels reflecting consumer
upgrades to new 5G handset models amid improved sentiment stimulated by the Government's Consumption
Voucher Scheme. EBITDA from the Mobile segment increased by 1% to HK$4,780 million during the year,
in line with growth in Mobile services revenue.
The Pay TV business, which included the first full-year contribution from Now TV, generated revenue of
HK$2,456 million and EBITDA of HK$481 million for the year ended December 31, 2021. Despite rising
competition from direct-to-consumer ("D2C") over-the-top ("OTT") players, Now TV delivered resilient
business performance due to its unrivalled sports content offering, growing subscriptions on its Now E
streaming service and healthy growth in advertising revenue. Pro-forma EBITDA grew by 6% during the
year, aided by savings in content costs and the benefits accruing from HKT's quadplay platform.
As a result, HKT's total revenue for the year increased by 5% to HK$33,961 million and total EBITDA
increased by 2% to HK$12,733 million. Total EBITDA increased by 5% if adjusted for the impact of ESS in
2020.
Profit attributable to holders of share stapled units of the HKT Trust and HKT (“Share Stapled Units") was
HK$4,808 million for the year. This was impacted by the absence of one-time other gains recorded in 2020
and higher depreciation and amortization expenses from the Now TV integration and re-assignment of
mobile spectrum. Basic earnings per Share Stapled Unit was 63.49 HK cents.
Adjusted funds flow for the year ended December 31, 2021 rose to HK$5,513 million, an increase of 2.4%
over the previous year. Annual adjusted funds flow per Share Stapled Unit was 72.77 HK cents.
The board of directors of the Trustee-Manager has recommended the payment of a final distribution of
42.07 HK cents per Share Stapled Unit for the year ended December 31, 2021. This brings the 2021 full-year
distribution to 72.77 HK cents per Share Stapled Unit (comprising 30.70 HK cents as interim distribution and
42.07 HK cents as final distribution) representing the full payout of the annual adjusted funds flow per Share
Stapled Unit.
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