Singaporean operator StarHub said that the second quarter of 2020 was the first full financial quarter affected by the coronavirus pandemic as it reported a 5.6% year-on-year fall in net income to SGD37.3 million (USD27.2 million) from SGD39.5 million in 2Q19, while total revenues slumped 18.0% to SGD453.4 million from SGD552.8 million and service revenue dropped 15.0% to SGD376.2 million, impacted by lower contributions from mobile, pay-TV, broadband and equipment sales.
In its financial results released today (7 August), the group noted that the big falls came after most of its retail outlets were required to close during the city-state’s lockdown period, while also reporting that its roaming, IDD and pre-paid mobile revenues were adversely impacted by travel bans and new border controls put in place in late-March. Mobile revenue in the quarter plummeted 25.4% y-o-y to SGD143.4 million, pay-TV turnover dropped by 27.6% to SGD46.9 million, broadband revenues dipped 4.2% to SGD43.2 million and network solutions edged down 1.2% on an annualised basis, to SGD102.8 million. Only its cybersecurity business bucked the trend, climbing 10.1% in the period under review to SGD39.8 million. Service EBITDA, meanwhile, fell 15.8% to SGD118.5 million from SGD140.8 million in 2Q19, as the service EBITDA margin slipped 0.3pp to 31.5%.
Chief executive officer Peter Kaliaropoulos said in a statement that ‘the challenging environment and business conditions will likely sustain throughout 2020’, although the group remains upbeat about its 5G joint venture (JV) with fellow mobile operator M1. The pair secured a nationwide 5G licence with plans to begin rollout and the launch of separate commercial services next year. Local press note that the StarHub-M1 JV has been set up as a ‘standalone special-purpose vehicle, funded 85% by debt and 15% by equity, with all expenses and profits to be split equally between the two partners’. For its part, StarHub plans to commit an initial capital investment of SGD200 million, front-loaded in H2 2020 and 2021.