StarHub first-quarter net income slumps 21% impacted by higher costs and lower grants

8 May 2017

Singapore’s second largest telco by subscribers and revenue, StarHub, reported net profits of SGD73.1 million (USD52.4 million) for the three months ending 31 March 2017, 21.3% lower than the SGD92.8 million figure reported in the year-ago quarter, due to higher operating expenses and declines in other income. StarHub said Q1 revenue rose by 0.2% year-on-year to SGD592.3 million, from SGD590.9 million in the year-ago quarter, aided by strong broadband service revenue as more users switched to its fibre broadband service (broadband sales reached SGD53.7 million, up 0.5% y-o-y). Enterprise fixed service revenue, meanwhile, was up 2.9% to SGD98.7 million, mainly due to higher take-up of data and internet services, and turnover from equipment sales rose by SGD6.7 million to SGD55.3 million on higher handset sales – especially smartphones. However, these gains were partially offset by poor performances from StarHub’s mobile and pay-TV units, which fell by 0.6% and 7.0% to SGD296 million and SGD88 million respectively. The telco noted that mobile service revenue was adversely impacted by lower returns from both pre-paid and post-paid services, while its pay-TV business declined due to a smaller subscriber base. StarHub’s first-quarter mobile revenue dropped 0.6% to SGD296.2 million, while the mobile customer base of 2.29 million users at 31 March was down from 2.31 million in Q4 2016.

The carrier’s operating revenues climbed by 2.6% y-o-y to SGD498.7 million from SGD485.9 million, as higher sales costs (up 13% to SGD259.9 million) wiped out a 6.7% fall in other operating expenses to SGD238.8 million. Furthermore, the company noted that its ‘other income’ in 1Q17 declined by SGD12.3 million on an annualised basis, largely as a result of lower grants from the Next Generation Nationwide Broadband Network (NGNBN) programme. The number of households with three or more services from StarHub stood at 338,000 at 31 March 2017, down a net 12,000 from 350,000 households a year ago due to higher churn in overall TV households.

Singapore, StarHub