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Our senior leadership team at the Annual Results presentation (Co-Owners from left to right): Derek Yue, CFO; Elinor Shiu, CEO – Residential Solutions; William Yeung, Executive Vice-chairman; NiQ Lai, Group CEO; and William Ho, CEO – Enterprise Solutions.
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Dear Friends of HKBN
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HKBN Announces FY23 Annual Results
Steady Year-on-Year Revenue Growth
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We have just announced our consolidated results for the year ended 31 August 2023 (FY23). Despite prevailing global macro-economic uncertainties, a slower-than-anticipated recovery in cross-border business, and persistent inflationary pressure, we achieved steady revenue growth whilst accelerating our ongoing transformation from a telco to a leading ICT Powerhouse. In facing such obstacles, we thank our Talents for delivering a steady set of results.
Key FY23 highlights include:
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Revenue increased year-on-year by 1% to HK$11,692 million, mainly due to a 9% surge in Enterprise Solutions revenue to HK$4,825 million as we achieved higher revenue in wholesale IDD whilst our ICT transformation gained momentum.
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EBITDA (Adjusted) decreased year-on-year by 12% to HK$2,290 million, mainly due to the increase in network costs and costs of sales by 5% to HK$7,525 million. This increase was linked with the cost of wholesale IDD and was offset by the decrease in cost of inventories.
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A loss of HK$1,267 million was reported, which includes a 194% increase in finance cost of HK$702 million, along with a non-cash impairment on goodwill of HK$1,200 million.
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Consistent with our stated dividend policy of no less than 75% of AFF, the Board has recommended the payment of a final dividend of 20 HK cents per share (FY22: 20 HK cents per share), resulting in a 33% year-on-year decrease in full year payment to 40 HK cents per share (FY22: 60 HK cents per share).
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The share closing price of HKBN as at 1 November 2023 was HK$2.73, which represents 15% dividend yield on our stock.
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William Yeung and NiQ Lai, our Executive vice-chairman and our Group CEO said, “FY23 marks a crucial transition year in our journey to become an ICT Powerhouse from FY23-25. Despite COVID-related challenges delaying our business integration, we have made meaningful progress. We have successfully brought on board industry leaders to fuel our transformation, positioning us to effectively capitalise on new opportunities. Concurrently, our residential business remained a solid foundation. By continuing to execute Infinite-play strategy and enriching our value bundles, we are fortifying customer loyalty and driving sustained growth in Average Revenue Per User (ARPU).”
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Enterprise: Disruptive innovation spurs new business growth
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Enterprise Solutions revenue increased year-on-year by 9% to HK$4,825 million, as core telecom revenue grew by 11% to HK$3,763 million, and SI services revenue rose by 2% to HK$1,062 million. Revenue backlog generated from new contracts signed, which typically come with an average contract length of 2-to-3 years, created strong momentum and well offset the decline in revenue experienced due to a reducing backlog during FY21 and FY22. In FY23, we introduced AegisConnect and IT.Simplified, two disruptive solutions which add layers of value and business-critical functionality to our core telecom connectivity. These solutions, along with others, cater to growing market demand for high-quality IT services, reinforcing our position as a one-stop platform for digital transformation.
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To capitalise on the opportunities arising from the border’s re-opening, we are strengthening our relationships with leading vendor partners to introduce new solutions and capture new accounts. Additionally, we are deploying more sales resources in the Greater Bay Area (GBA) and Eastern China region to expand coverage and drive new growth.
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Residential: Amplifying Infinite-play to boost ARPU
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Residential Solutions revenue remained stable at HK$2,393 million (FY22: HK$2,433 million) as we continued to execute our Infinite-play strategy to expand our range of service offerings. Residential broadband subscriber numbers recorded a year-on-year increase of 3% to 920,000, sustaining significant market share amidst intense competition. Throughout the year, we made significant progress in continually upgrading our service offerings to customers, with a focus on increasing uptake of home Wi-Fi solutions and higher bandwidth upgrades. Notable launches include the world’s first residential Dual Guarantee for fibre broadband and Hong Kong’s first-ever post-paid Global SIM roaming data service.
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In a strategic effort to redefine the home entertainment experience, we collaborated with Netflix, Disney+, myTV SUPER, and iQIYI. Plans are underway to enhance customer experiences by expanding our residential ecosystem with a variety of value-added services and solutions, such as Wi-Fi 6 Gateway, Wi-Fi-as-a-Service, personal cybersecurity and more. By delivering outstanding customer experiences, our goal is to enhance customer loyalty and drive long-term ARPU growth.
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For more details of HKBN’s FY23 results, please refer to the announcement:
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*Leading through purpose, HKBN tops Hong Kong’s telco industry in ESG*
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*Based on the Hang Seng Corporate Sustainability Benchmark Index and MSCI’s ESG Ratings
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