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Broadband service revenue was up by 11.3% y-o-y in 4QFY2020 due to higher average revenues per user (ARPUs). The segment fell slightly at 0.1% y-o-y for the FY2020 due to a one-time 20% rebate on Home Broadband monthly fee due to service disruption in April 2020. Excluding the rebate, the segment would have been 0.7% y-o-y up for the FY2020. Enterprise Business revenue was 21.1% y-o-y higher and 12.2% y-o-y higher for the 4QFY2020 and FY2020 due to higher revenues from Cyber security services and the consolidation of Strateq under Regional ICT services following its acquisition on July 30, 2020. Revenue from Sales of Equipment fell 2.8% y-o-y and 22.3% y-o-y for 4QFY2020 and FY2020 due to lesser handsets sold, and delays in the launch of new premium models. For the 4QFY2020, profit from operations increased 19.9% y-o-y to $55.7 million, while profit from operations for FY2020 fell 9.6% y-o-y to $231.3 million. As at Dec 31, 2020, cash and cash equivalents stood at $403.7 million, and free cash flow for Starhub stood at $387.7 million, a 77.3% y-o-y increase. In its earnings call on 19 Feb, CEO Nikhil Eapen said this was due to "due to cost management, working Capital Management and tax deferrals," and the "strong free cash flow and funding position should position us to fulfill our obligations as well as drive transformation and growth for 2021." Looking ahead, the telco says it is seeing “encouraging interest” in the Mobile business’s new Mobile+ 5G plans, and that it will continue to seek more partnerships to differentiate its 5G offerings through the integration of gaming and OTT content.
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“FY2020 was a challenging year with strong Covid-19 headwinds. We remained focused on our transformation to optimise and simplify our processes, evolve our cost and business models, complete the acquisition of Strateq and commence our IT transformation to empower our digital strategies,” says Eapen. Starhub's CFO Dennis Chia elaborated that the company in October 2018 guided that the transformation to save $210 million over 3 years, and revealed that the company has executed about 82% as at the end of last year. "We expect to be able to execute all of the remaining initiatives by the end of this 3 year journey, and be able to identify the next phase of these cost transformation initiatives as we embark on more digital transformation initiatives." he said. “While we see early signs of business demand picking up with Phase Three of the economic reopening, the macroeconomic environment remains uncertain. We plan towards a gradual recovery in 2021 and continue to focus on transforming StarHub into an agile business for a digital future. We will pursue growth through new opportunities such as 5G, and continue to create value for customers through innovation, unparalleled network quality and customer experience,” Eapen adds. Eapen also said in the earnings call that the company is focused on neighbouring countries for its footprint and markets, but also noted "if there are specific capabilities that are important to our consumer enterprise roadmap that are outside of the region we'll look at it." Shares in StarHub closed 1 cent lower or 0.8% down at $1.28 on Feb 19.
