StarHub Q4 earnings down 14.3 per cent at $80.8m

Singapore - Sticking to a trend this reporting season, StarHub joined the other two telcos, Singapore Telecommunications (Singtel) and M1 in reporting a dip in net profit for its latest quarter results.

On Tuesday, Singapore's second biggest telco said net profit for the fourth quarter ended Dec 31, 2015, dropped 14.3 per cent to S$80.8 million from S$94.2 million one year ago. This came on the back of a 2.1 per cent dip in revenue to S$633.8 million, from S$647.4 million.

Earnings per share (EPS) for the quarter fell to 4.7 Singapore cents from 5.5 Singapore cents. The company proposed a final dividend of five Singapore cents per ordinary share for the quarter, the same as last year. This takes the company's full year dividend payout to 20 Singapore cents, paid over four quarters.

For the quarter, Ebitda (earnings before interest, taxes, depreciation and amortisation)) was down 18.4 per cent year-on-year at S$157 million, from S$192.4 million, as a result of S$13.6 million lower revenue and S$23.9 million higher cash operating expenses. Ebitda margin as a percentage of service revenue was 27.9 per cent for the quarter and 32.2 per cent for the full year.

StarHub recorded half a percentage point increase in net profit for the full year at S$372.3 million, from S$370.5 million for the preceding year. This came on the back of a 2.4 per cent increase in full year revenue to S$2.44 billion from S$2.39 billion. The increase for the year was contributed by a higher revenue from equipment sales. Full year EPS was the same as last year, at 21.5 Singapore cents.

StarHub's fourth quarter mobile service revenue was 2.3 per cent lower at S$313 million, from S$320.5 million for the year-ago quarter. The company's full year mobile service revenue was flat at S$1.24 billion.

The company said that for the fourth quarter, post-paid mobile Arpu (average revenue per user) was higher by a dollar at S$72 from the year-ago quarter and for the full year Arpu was up S$2 at S$70. The higher post-paid Arpu was attributable to an increasing mix of customers on the new 4G tiered data plans in an expanded customer base.

For Pay TV, service revenue in the fourth quarter was flat at S$100 million and for the full year it increased marginally to S$391 million from S$389.7 million, one year ago. Pay TV Arpu at S$51 for the fourth quarter was S$1 lower than a year ago. For the full year, it was comparable to the year-ago period, at S$51.

The company's broadband service revenue grew 9.2 per cent from S$47.7 million in the fourth quarter last year to S$52.1 million in the current reporting quarter, due mainly to higher subscription revenue from an increased mix of customers on the higher speed fibre plans and an expanded customer base. For the full year, service revenue was S$1.6 million or 0.8 per cent lower at S$200.3 million. This was a significant improvement in the current periods when compared to last year, where the decrease year-on-year totalled S$39.9 million or 16.5 per cent.

Fixed network service revenue for the quarter was S$98 million or 2.9 per cent lower than the same quarter last year. For the full year, fixed network service revenue was up 1.7 per cent at S$384.9 million, contributed by higher data and Internet service revenue, which offset the lower voice service revenue.

As at Dec 31, the total number of households who subscribed to at least one of the hubbing services offered by StarHub was 774,200 households, comparable to last year's households of 774,300.

As a percentage of total hubbing households, the triple service households were higher at 31.7 per cent as of Dec 31, when compared to 31.3 per cent a year ago. The triple hubbing services households was 245,000 households as at Dec 31, up from 242,000 households or 1.4 per cent higher year-on-year.

Based on the current outlook, the company expects its 2016 service revenue to grow in the low single-digit range and its Ebitda margin to be about 31 per cent of service revenue. It expects capital expenditure payments, excluding the S$80 million spectrum payment due in 2016, to be about 13 per cent of its total revenue. For 2016, the company expects to maintain its annual cash dividend of 20 cents per ordinary share.

This article was first published on Feb 17, 2016.
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