StarHub posts 21% drop in 2Q earnings to $85.7 mil

StarHub posts 21% drop in 2Q earnings to $85.7 mil

Samantha Chiew
02/08/17, 06:01 pm

SINGAPORE (Aug 2): StarHub posted a 21% drop in 2Q17 earnings ended June of $85.7 million compared to $108.6 million in 2Q16.

Group revenue for the three months ended June fell 1.1% to $579.1 million from $585.7.

For the 1H17 ended June, earnings came in at $158.8, 21.2% lower compared to $201.4 million a year ago.

1H17 group revenue decreased 0.4% to $1.71 billion from $1.78 billionin 1H16.

StarHub says the lower revenue for 2Q17 and 1H17 were mainly due to lower Mobile, Broadband and Pay TV service revenue, partially mitigated by higher sales of equipment and Enterprise Fixed service revenue.

Mobile service revenue in 2Q17 and 1H17 was lower by 0.9% and 0.8% at $302.7 million and $598.9 million respectively, mainly due to lower voice, IDD and roaming usage from both post-paid and pre-paid services. This was partially mitigated by higher data usage and mobile value-added services revenue.

Pay TV service revenue decreased y-o-y by 7.9% in 2Q17 to $87.9 million and 7.4% to $176.3 million in 1H17, while Broadband service revenue decreased by 3.0% and 1.3% y-o-y to $52.8 million and $106.5 million respectively for the corresponding periods. This was primarily due to a lower subscriber base.

Enterprise Fixed service revenue of $99.2 million in 2Q17 grew by 0.7% y-o-y, while 1H17 revenue grew 1.8% y-o-y to $197.9 million. The increase was mainly driven by higher managed services revenue.

For 2Q17 and 1H17, revenue from sales of equipment rose by 14.1% and 13.9% YoY respectively, largely due to increase in sales of high-end smartphones.

“In the quarter, we announced our acquisition of Accel to enhance our enterprise-grade cyber security offerings. This acquisition dovetails perfectly with our strategy to grow our enterprise business and demonstrates our push for inorganic growth,” says Tan Tong Hai, CEO of StarHub.

“We remain focused on addressing our customers’ digital lifestyle needs by offering them relevant products and services to enjoy a better StarHub experience,” adds Tan.

Based on the current outlook, StarHub says it will maintain the group’s 2017 service revenue to be at about 2016’s level and Group EBITDA margin to be between 26% to 28% of service revenue. The group also expects its CAPEX payments to be about 13% of its total revenue, excluding the spectrum payment.

For 2017, StarHub intends to maintain its annual cash dividend of four cents per quarter per share.

Shares of StarHub closed 1 cent lower at $2.70 on Wednesday.

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