StarHub reports 12.8% fall in 3Q18 earnings to $57 mil on higher expenses

StarHub reports 12.8% fall in 3Q18 earnings to $57 mil on higher expenses

By: 
PC Lee
09/11/18, 05:55 pm

SINGAPORE (Nov 9): StarHub reported a 12.8% fall in 3Q18 earnings to $57 million from a year ago on higher operating expenses.

Total 3Q18 revenue came in at $582.2 million, 3% higher than a year ago mainly due to higher revenue from Enterprise Fixed and Sales of equipment, partially offset by lower revenue from Mobile and Pay TV services.

Mobile service reported $213.6 million in sales, 4.2% lower compared to the previous year mainly due to lower IDD, voice and data usage revenue, lower subscription revenue due to higher phone subsidy given to customers, and a higher mix of SIM-only plans.

Pay TV service revenue decreased 14.1% to $74.6 million mainly due to lower subscriber base. Broadband service revenue remained stable at $46.8 million.

Enterprise Fixed service revenue grew 13% to $124.6 million primarily from growth in Managed services and consolidation of enterprise solutions businesses.

Revenue from sales of equipment increased 24.4% to $122.6 million primarily due to higher volume of premium handsets sold and sales of smart home equipment.

The group’s operating expenses for 3Q18 was higher by $26.9 million at $506.7 million due to higher cost of sales.

Starhub had recently announced a strategic transformation plan to improve productivity, and speed in decision making as well as lower operating expenditure across the board.

This will result in workforce reduction of 300 full-time employees. A one-off restructuring cost of S$25 million, which includes funding to support outplacement, training and coaching, will be incurred although the cost will not have any impact on the group’s guidance for FY2018.

Based on the current outlook, the group is maintaining its guidance of 2018 service revenue to be 1% to 3% lower y-o-y.

Group service EBITDA margin is expected to be maintained at between 27% to 29% after the adoption of SFRS(I) 15.

In 2018, CAPEX payment, excluding spectrum payment of S$282.0 million and building payment of S$31.6 million, remains at 11% of total revenue.

The group intends to pay a quarterly cash dividend of 4 cents per share for FY18.

Year to date, shares in StarHub are own 33% to close at $1.94 on Friday.

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