StarHub's net profit falls 27.6% in Q3

StarHub has posted a 27.6 per cent fall in third-quarter net profit to $86 million on lower handset sales, mobile and pay-TV revenue.

Excluding a one-time gain of $15 million from the partial divestment of Shine Systems Assets that boosted the third-quarter figure last year, the decline in net profit would have been 17 per cent.

Revenue for the three months ended Sept 30 slid 3 per cent to $585.3 million.

Total service revenue, which excludes equipment sales, was $546.1 million, down 2.2 per cent. Third-quarter handset sales fell 12.9 per cent from a year ago to $39.2 million.

Mobile revenue fell 3.6 per cent to $299.4 million in the quarter owing to lower revenue from both post-paid and pre-paid services, partially offset by higher subscription revenue from higher take-up of 4G tiered plans.

StarHub added a net of 9,000 post-paid mobile customers in the quarter, bringing its subscriber base to 1.37 million as at Sept 30.

About 66.7 per cent of its post-paid customers were on tiered data plans, from 63.4 per cent a year earlier. About 25.7 per cent of these users busted their data caps.

• AT A GLANCE

• REVENUE: $585.3 million (-3%)

  NET PROFIT: $86 million (-27.6%)

  DIVIDEND: 5 cents per share (unchanged)

Average revenue per post-paid user was $69, $2 lower than in the preceding quarter and the third quarter last year, primarily due to lower revenue from IDD, local voice and roaming services.

Pay-TV revenue fell 3.7 per cent to $93.6 million on a shrinking customer base, eclipsed once again by enterprise fixed revenue which fell 1 per cent to $98.4 million, due mainly to lower voice services.

The telco also reported a 10 per cent decrease in earnings before interest, tax, depreciation and amortisation (Ebitda) margin or core profit margin from a year earlier to $179.1 million during the quarter.

This resulted in a third-quarter Ebitda margin of 32.8 per cent, or a 33.8 per cent margin in the year to date. StarHub is sticking with its guidance for full-year Ebitda margin to come in at 32 per cent.

Third-quarter earnings per share was five cents, down from 6.9 cents in the same period a year earlier. Net asset value per share was 13.3 cents as at Sept 30, up from 10.8 cents as at Dec 31.

An interim dividend of five cents a share has been declared, the same as last year. StarHub said it intends to keep the annual cash dividend of 20 cents a share this year.

The telco said yesterday it expects its service revenue this year to be at about last year's level.

Chief executive Tan Tong Hai said in a statement: "For the nine months, profits from operations increased 2 per cent with continued revenue growth in our residential broadband and enterprise fixed services.

"We will continue to invest in our enterprise business to drive our future growth."

Earnings were posted after the market closed. The counter gained a cent or 0.3 per cent to close at $3.38 yesterday.

This article was first published on Nov 03, 2016.
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