StarHub says 2008 net income down 5.8% on higher costs

11 Feb 2009

Singapore’s second largest telecoms operator by subscribers, StarHub, has reported a 5.8% drop in full-year net profits for 2008 to SGD311 million (USD207.3 million), due to lower tax credits and increased customer acquisition and retention costs in the first six months of the year. Full year revenues amounted to SGD2.128 billion, up 5.7% year-on-year, while group EBITDA for the full year was SGD644 million; the EBITDA margin as a percentage of service revenue fell two percentage points to 31.7% for the full year, impacted by higher customer acquisition and retention costs, said StarHub CEO Terry Clontz. Capital expenditure for the full year was SGD220 million which was 10% of the company’s operating revenue.

As at 31 December 2008 StarHub had 1.765 million mobile subscribers, up marginally from 1.757 million a year earlier. Mobile revenue grew 4% year-on-year, mainly the result of a larger post-paid customer base. Post-paid mobile services revenue rose 8% to SGD835 million, accounting for 77% of the mobile revenue mix. Pre-paid mobile services revenue dipped 7% to SGD244 million, it said. Turnover from pay-TV services jumped 17% y-o-y to SGD398 million from SGD342 million and a 4% rise in customer numbers to 524,000 (of whom 504,000 were on a digital platform) helped push ARPU up SGD6 a month to SGD57. Broadband revenues rose 3% to SGD253 million as StarHub increased its MaxOnline customer base to 373,000, an increase of 8%. Meanwhile, fixed network revenue increased 7% to SGD300 million from SGD280 million previously, while Data & Internet services revenue, which makes up 82% of the fixed network division’s revenue, grew 20% to SGD247 million.

Looking forward, Clontz expects a challenging year in 2009 in the light of the recession, but nonetheless expects ‘low single-digit’ growth.

Singapore, StarHub