10
China Communications Services Corporation Limited Annual Report 2015
CHAIRMAN’S STATEMENT
ENHANCEMENT IN OPERATING PERFORMANCE
In 2015, the Group recorded total revenues of RMB80,960 million, representing a year-on-year growth of 10.6%. Profit
attributable to equity shareholders of the Company amounted to RMB2,334 million, representing a year-on-year growth of 8.6%.
The gap between growth in revenue and profit was narrowed down. The cash conversion ratio
1
was 2.0, representing an
increase of 1.7 times compared to the corresponding period last year and showing a substantial improvement in the quality of
profit. Free cash flow
2
was RMB3,573 million, reaching a historical high. The overall improvement in operating efficiency and
sufficient funding resources provided strong endogenous power for the subsequent development of the Group.
INCREASE IN DIVIDEND DISTRIBUTION
The Board has proposed to distribute a final dividend of RMB0.1011 per share for the financial year ended 31 December 2015,
representing a dividend payout ratio of 30%. Moreover, in view of the Group’s outstanding operating results and free cash flow
for the year and its confidence in future development, the Board has proposed to distribute a special dividend of RMB0.0101 per
share for 2015. Taking into consideration the above factors, the Company’s total dividend for 2015 is RMB0.1112 per share,
representing a year-on-year growth of 19.4%.
INNOVATIVE DEVELOPMENT
In 2015, the Group adhered to its diversification strategy in customer base, business scope and regional presence, continued to
expand into new areas, optimize its business structure and enhance its quality of development.
The Group has leveraged on both “CAPEX and OPEX-driven” businesses
3
as the dual growth drivers to accelerate the
development of domestic telecommunications operator market. The Group captured the vital opportunities of LTE FDD license
issuance, upgrade and capacity expansion of telecommunications backbone network, broadband end-to-end speed upgrade and
realized a year-on-year revenue growth of 16.3% from domestic telecommunications operator customers
4
, accounted for 67.7%
of total revenues and represented an increase of 3.3 percentage points compared to the corresponding period of last year.
Meanwhile, the Group reinforced its efforts in expanding the OPEX-driven business, and its network maintenance revenue from
domestic telecommunications operator customers increased by 17.9% year-on-year, which maintained a favourable growth
trend and optimized the overall revenue structure. The Group fully capitalized on the preferential treatment and non-competition
arrangements with China Tower Corporation Limited (the “Tower Company”) and proactively undertook businesses from the
Tower Company. The Tower Company was the second largest contributor to the Group’s revenue increase among the overall
incremental revenue from all customers (the largest contributor was China Telecom).
1
Cash conversion ratio = net cash generated from operating activities/profit attributable to equity shareholders of the Company
2
Free cash flow = Profit for the year + Depreciation and amortization – Changes in working capital – Capital expenditure
3
CAPEX and OPEX refer to the capital expenditure and operating expenditure of domestic telecommunications operators, respectively.
4
From 2015 onwards, the revenue from China Tower Corporation Limited is classified under the aggregate revenues of domestic telecommunications operator
customers.
