StarHub’s Q4 net profit slumped 74% on higher expenses

15 Feb 2018

StarHub, Singapore’s second largest telecoms operator by subscribers, has announced its financial results for Q4 and FY 2017, with quarterly net profit tumbling 74% to SGD14.3 million (USD10.8 million) as a sharp rise in operating expenses and higher staff costs negated a 2.2% uptick in fourth-quarter revenue to SGD649.0 million. Full-year net income dropped 27.1% year-on-year to SGD249.0 million and revenue flat-lined at SGD2.4 billion, despite higher revenues from Enterprise Fixed services and sales of equipment. Fourth-quarter EBITDA fell by 29% y-o-y to SGD96.8 million and for the full year EBITDA decreased by 11% to SGD613.9 million. EBITDA margin as a percentage of service revenue was 16.9% for the quarter and 27.9% for the full year, with StarHub noting that the decline in EBITDA ‘was partly due to one-off provisions made for certain staff benefits to rationalise and retain talent in recognition of the business challenges and operating conditions, and for a leasing contract related to the cable network. Given plans to migrate cable customers to fibre broadband and IPTV services, the economic benefits expected from the lease is lower than the contractual cost.’ Finally, capital expenditure was at SGD95.3 million for the quarter and SGD295.9 million for the full year, it said.

Operationally speaking, StarHub closed out 31 December 2017 with a total of 2.307 million mobile subscribers, unchanged y-o-y but marking a net 51,000 improvement quarter-on-quarter; 59% of the total base were on post-paid contracts at the end of 2017, it said. 4Q17 mobile revenue stood at SGD301.0 million (down 4%) and reached SGD1.2 billion for the year (down 2%), as post-paid ARPU decreased by SGD2 to SGD68 for both the quarter and the full year, and pre-paid ARPU fell SGD1 for both the quarter and full year, to SGD14 and SGD15 respectively. In the broadband segment, StarHub reported 467,000 connections at end-2017, compared to 473,000 twelve months earlier, as churn remained stable for both the quarter and year, at 0.9% and 1.0% respectively. Broadband revenue was reported as stable at SGD54.2 million for the quarter, although full year revenue fell 1% to SGD214.0 million, due to a fall in the operator’s residential broadband customer base. Monthly broadband ARPU was SGD37 for both the fourth quarter and full year, both unchanged from the corresponding year earlier periods. Finally, StarHub reported 458,000 pay-TV subscribers, down 9.1% y-o-y, as revenue decreased 7% for the quarter (SGD86.9 million) and 8% for the year (SGD348.9 million).

Singapore, StarHub