StarHub Q2 net profit falls 22%

10 Aug 2018

StarHub, which offers fixed and mobile services in the city state of Singapore, reported that net profit for the three months to 30 June 2018 declined 22.8% year-on-year to SGD61.7 million (USD45.2 million) from SGD80.0 million in Q2 2017, impacted by a decline in the sale of mobile services. The telco confirmed that service revenue – which strips out the sale of equipment – inched up by just 0.7%, to SGD466.8 million, in no small part the result of the fall in turnover from its lynchpin mobile service business. Total (fixed and mobile) revenue, meanwhile, climbed 5.4% y-o-y to SGD597.3 million from SGD566.7 million on a jump in equipment sales as more premium handsets and smart home apparatus were moved, but EBITDA slipped 10.4% to SGD155.3 million. ‘Although the decline in mobile revenue was offset by higher revenues from managed services and the sales of equipment, the margins from these businesses were lower compared to the margin from the mobile business,’ StarHub noted in its financial statements.

Operationally speaking, StarHub had a total of 2.258 million mobile users at the end of the six-month period under review, down 1.4% y-o-y, of which 1.376 million are on post-paid contracts (-0.7%). Post-paid monthly average revenue per user (ARPU) was SGD45 in the second quarter, up from SGD43 in 1Q18, but still lower than the SGD49 figure reported in 2Q17. StarHub said that the decrease was mainly due to lower excess data usage revenue, as well as a higher mix of SIM-only plans and bigger share of revenue allocated to equipment turnover and recognised in earlier periods. Pre-paid ARPU stood at SGD13, unchanged quarter-on-quarter but SGD2 lower when compared to 2Q17. The lower ARPU was due to lower voice and IDD usage, it said. Pay-TV service revenue, meanwhile, declined 4.8% y-o-y to SGD84.7 million as the number of residential customers slipped 8.1% to 438,000. StarHub also had 471,000 residential broadband customers at the mid-year point, up a net 4,000 accounts when compared to end-June 2017. Within the total, fibre broadband customers reached 393,000 (+5.4%). Broadband ARPU was SGD32, unchanged from a year ago. Broadband average monthly churn remained at 1.0% for both Q2 and H1 2018.

Singapore, StarHub