StarHub's Q1 net profit up 3 percent to US$73.24M

Singapore, May 10, 2013 — Singaporean telco StarHub has reported a 3 percent rise in Q1 net profit to US$73.24 million (S$91 million) compared with the same period a year ago. However, its group operating revenue for the period fell 2 percent to US$466.83 million (S$580 million) while EBITDA grew 3 percent to US$146.47 million (S$182 million) from US$142.45 million (S$177 million) previously.

Profit before taxation was at US$88.53 million (S$110 million) or 3 percent higher year-on-year (YoY) while service revenue was pegged at US$ 440.21 million (S$547 million). Free cash flow at US$74.04 million (S$92 million) was 11 percent lower compared to last year’s US$83.69 million (S$104 million). Cash capital expenditure was 15 percent higher at US$37.82 million S$47 million compared to the same period last year.

Fixed Network Services revenue registered the highest growth for the quarter at 4 percent YoY. This was followed by Broadband revenue at 2 percent. In terms of total revenue mix, Mobile continued to be the major contributor at 52 percent. Pay TV, Broadband, Fixed Network Services and Sales of Equipment contributed 16 percent, 11 percent, 15 percent and 6 percent respectively to the revenue mix.

Mobile revenue decreased by 2 percent to US$243.04 million (S$302 million), contributed by lower post-paid revenue from inter-connect operators and roaming services in spite of an increase in subscription revenue from a larger subscriber base. Post-paid mobile services revenue decreased 2 percent to US$193.95 million ($241 million), accounting for 80 percent of the Mobile revenue mix. Post-paid ARPU decreased S$1 to S$68, while pre-paid ARPU was flat at US$73.24 (S$19).

Pay TV revenue decreased 1 percent to US$76.45 million (S$95 million). The lower revenue was a result of lower advertising revenue which was partly mitigated by higher subscription revenue from both commercial and residential customers. Customer base decreased by 13,000 YoY to 532,000 households and the churn rate was at 1.2 percent. YoY, there was a US$0.80 (S$1) Pay TV ARPU increase to US$41.85 (S$52).

Broadband revenue grew 2 percent to S$62 million, compared to a year ago, mainly due to a larger subscriber base and better plan mix. For the quarter, ARPU was at US$36.21(S$45). The residential broadband customer base increased by 4,000 YoY to 444,000 households.

Fixed Network revenue increased 4 percent to US$70.83 million (S$88 million) YoY. Data & Internet services revenue, which contributes 82 percent to the Fixed Network revenue mix, was at US$57.95 million (S$72 million), while Voice services revenue grew to US$12.87 million (S$16 million). This was primarily contributed by digital voice home services which became chargeable from 4Q- 2012 and higher in-payments from carriers services, which were offset by lower IDD usages.

The quarter’s marketing initiatives continued to encourage customers to take up multi-services. As a result, the percentage of total Hubbing households that subscribed to any two or more StarHub services remained strong at 57 percent YoY. Triple-service households grew to 216,000, a 4 percent increase from a year ago.

“We are happy to report a 3 percent growth in net profit after tax year-on-year, despite intense competition in the market place,” said Mr Tan Tong Hai, CEO of StarHub. “In the Mobile space, we have gained traction with over 75 percent LTE nation-wide coverage and 4G customer take-up in excess of 270,000 subscribers.”

Based on the current outlook and barring any unforeseen circumstances, Starhub revised its guidance for the Group’s operating revenue to grow in the low single-digit range YoY, and Group EBITDA margin as a percentage of service revenue is expected to be about 31 percent.