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.

Living it up

SINGAPORE (Mar 25): This is the season for indices. On March 20, Singapore was ranked 34th in the World Happiness Index — less happy than Taiwan, but far more cheery than Hong Kong and China, as well as its neighbours, Thailand, Malaysia and Indonesia. Globally, the Scandinavian and north European cities top the index; and New Zealand, Canada and Austria round out the top 10. The index this year focuses on happiness and the community, taking into account how happiness has evolved over the years, as affected by technology, social norms, conflicts and government policies. A week earlier, th....
Read More >>

The charismatic bankrupt who allegedly pulled the strings behind Singapore's largest stock manipulation scandal

SINGAPORE (Mar 26): Garbed in purple overalls, John Soh Chee Wen cuts a relaxed figure as he takes his seat. The garment falls fittingly on his athletic frame, not unlike a designer suit. It could well have made a fashion statement, save for the word "prisoner" emblazoned in white across the back. As his legal team huddled around him before the start of the trial, the 60-year-old is a picture of calm. At one point, he casually flashes a thumbs up at his lead counsel, N Sreenivasan, a managing director and senior counsel at Straits Law LLP. Then, as he turns back to his seat in the dock, ....
Read More >>

OCBC still bullish on banking stocks after a lacklustre FY18

SINGAPORE (Mar 26): OCBC Investment Research remains bullish on Singapore’s banking space while keeping its sector “overweight” with “buy” calls on both DBS and UOB, which have been given fair value estimates of $29.31 and $28.30, respectively. Both stocks had dividend yields of 4.8%, with DBS and UOB trading at the respective book values of 1.3 times and 1.1 times, or at an average of 1.2 times historical book as at the close of Wednesday. In a Tuesday report, OCBC analyst Carmen Lee notes that raising this average to 1.3 times book and factoring a 10% premium for DBS over the....
Read More >>