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Starhub posts 36.1% drop in 2Q earnings to $39.5 mil on lower revenue

Uma Devi
Uma Devi • 3 min read
Starhub posts 36.1% drop in 2Q earnings to $39.5 mil on lower revenue
SINGAPORE (Aug 6): Starhub reported earnings of $39.5 million for the 2Q19 ended June, down 36.1% from $61.7 million the previous year.
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SINGAPORE (Aug 6): Starhub reported earnings of $39.5 million for the 2Q19 ended June, down 36.1% from $61.7 million the previous year.

Total revenue for the quarter came in at $552.8 million, down 7.4% from $597.3 million in 2Q18.

The decline was primarily due to lower revenue contributions from its Mobile, Pay TV, and Broadband service segments as well as lower revenue from sales of equipment.

Mobile service revenue fell 9.9% 5o $192.3 million, mainly due to lower IDD, voice and excess data usage, roaming, data subscription and value-added services (VAS) revenues, partially offset by the increase in plan subscription and enterprise SMS revenues.

Pay TV revenue slid 23.6% to $64.7 million due to a lower subscriber base, while sales of equipment revenue dropped 15.4% to $110.4 million due to lower volumes of handsets and smart home equipment sold.

Starhub’s only bright spark in terms of revenue contribution during the quarter came from its Enterprise Business segment, which saw a 14.6% rise in revenue to $140.3 million on the back of higher revenue from cyber security services, which more than doubled to $36.2 million in 2Q19.

Profit from operations fell 32% to $57.3 million in 2Q19, from $84.2 million a year ago, as operating expenses fell at a slower pace compared to the decline in revenue.

Operating expenses for 2Q19 fell 3.5% to $495.6 million due to a lower cost of sales and other operating expenses, but was partially offset by a $27.3 million increase in operating expenses for cyber security services.

The group saw a 36.5% increase in finance expenses to $10.1 million during the quarter, largely due to the adoption of a new accounting standard for leases, which resulted in higher interest expense.

As at end June, cash and cash equivalents stood at $97.5 million, while total outstanding capital expenditure commitments amounted to $443.8 million, including the outstanding commitments for 4G spectrum rights of $282 million.

The group has declared an interim dividend of 2.25 cents per share, to be paid on Aug 30. This is some 44% lower than the interim dividend of 4 cents per share declared in the corresponding quarter last year.

In its outlook statement, the group notes an increased competitive intensity in the consumer mobile market.

“2Q19 mobile revenue is stable compared to 1Q2019 despite aggressive price competition across the market,” says Peter Kaliaropoulos, CEO of Starhub.

“We continue to transform our operations and ensure cost optimisation initiatives fund the growth of new digital services, including our giga mobile brand and our cyber security initiatives,” he adds.

Shares in Starhub closed 2 cents lower at $1.48 on Tuesday before the results announcement.

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