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StarHub reports 6.3% fall in 2Q net profit as broadband business slumps

6 Aug 2014

Singaporean fixed and mobile operator StarHub has reported net profit of SGD94.3 million (USD75.5 million) for the three months ended 30 June 2014, down 6.3% year-on-year from SGD100.6 million previously, as its broadband business struggled to contend with price competition in the local market. The telco said that although its broadband user base increased by 3.0% y-o-y to 456,000 user connections, broadband revenue slumped 17.0% to SGD51.0 million over the same period, primarily due to price competition in the market which drove down subscription revenue from re-contracts and new customers. As a result, consolidated revenue slipped by 1.8% on an annualised basis to SGD576.4 million, it said.

Furthermore, StarHub reported a weakening of its core mobile business, where second-quarter sales dipped 1.4% y-o-y to SGD310.3 million – largely the impact of lower revenue in the pre-paid user segment. By contrast, the carrier’s post-paid business added a net 116,100 new customers in the period under review, boosting the total base to 1.243 million. However, contract ARPU slipped 5.6% to SGD68 per month, when compared to the year earlier period, and pre-paid ARPU fell by SGD2 to SGD16. Meanwhile, its pay-TV revenue rose 3.0% y-o-y to SGD98.4 million due to higher subscriptions and advertising takings, while its fixed network services revenue increased 2.2% to SGD92 million, driven by higher subscription for its domestic leased circuits, connectivity plus solutions and internet services. Voice services revenue at SGD14.6 million for the quarter was 13% lower when compared to Q2 2013.

Looking ahead, the operator says that: ‘Based on the current outlook, and barring any unforeseen circumstances, we revise our service revenue guidance and expect the Group’s 2014 service revenue to be maintained at about 2013’s level. We maintain our guidance on Group EBITDA margin to be about 32% on service revenue and total CAPEX payments in 2014 are expected to be about 13% of our total revenue. We intend to maintain our annual cash dividend payout of SGD0.20 per ordinary share for 2014.’

Singapore, StarHub

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