StarHub's Q3 earnings fall 12% on higher expenses

13 Nov 2018

Singapore fixed and mobile operator StarHub has published its financial results for the three months to 30 September 2018, noting that net profit declined 12% from the previous year to SGD58 million (USD42 million), as higher expenses such as the cost of sales and traffic expenses from roaming hit the bottom line. Third quarter revenue, meanwhile, improved by 3% on an annualised basis to SGD582.2 million from SGD565.0 million, boosted by strong sales of premium handsets and ‘smart home’ equipment sales, it said. However, StarHub’s solid broadband revenue growth (0.8%) and rising sales of Enterprise fixed services (13%) failed to offset falling revenue at its mobile (down 4.2%) and pay-TV (-14.1%) business units. The telco, for example, attributed a fall in pay-TV ARPU to customer rebates after it stopped carrying a number of TV channels this year; local press note it made headlines for the loss of Discovery content, with a disagreement between the two parties on carriage fees. Service EBITDA (EBITDA minus sales of equipment and cost of equipment) was SGD132 million, down 12% on an annualised basis with a service EBITDA margin of 28.8% (down 3.4pp).

StarHub closed out September 2018 with around 1.39 million post-paid mobile users, up 1.7% from a year earlier, while the pre-paid customer base shrank 6.5% to 836,000, with ‘fewer tourists and foreign workers,’ it said. About 423,000 households were subscribed to pay-TV, down 9.4%.

Commenting on the results, StarHub’s CEO Peter Kaliaropoulos said: ‘Despite ever increasing competitive pressures, we delivered total revenue of SGD1.74 billion [in 9M18] reflecting modest growth and SGD185 million profit in line with guidance to the market. Whilst our Enterprise business continues to deliver growth in service revenues and customers, we continue to face the challenge of lower mobile revenues from wider customer choice in terms of SIM-only plans. Pay-TV business continues to experience loss of customers to alternative content and packages. We are addressing these challenges including the management of operating expenses.’

Singapore, StarHub