SINGAPORE (May 3): StarHub reported a 14.9% decline in 1Q18 earnings to $61.5 million from $72.3 million a year ago on lower sales.
The telco was expected to reported earnings of $69.5 million, according to Thomson Reuters.
Total revenue for the quarter fell 4.7% to $561 million from $588.7 million in 1Q17. This came on the back of 7.1% and 10% revenue declines in the Mobile and Pay TV segments to $205.1 million and $80.7 million, respectively.
The lower Mobile revenue was largely due to a fall in post-paid customer base as a result of a one-time termination of 23,000 inactive legacy data-only lines in 3Q17. Both pre- and post-paid average revenue per users (ARPUs) fell by $2 to $13 and $43, respectively, from a year ago.
Contributions from Pay TV fell as its customer base decreased by 38,000 to slightly under half a million households while churn rate was kept low at 0.9%. ARPU fell $1 to $51 compared to a year ago.
The weaker performance from Mobile and Pay TV was nonetheless offset in part by higher revenue contributions from Enterprise Fixed, which grew by 18% to $117.5 million due to growth in Data & Internet revenue as well as Managed Services revenue.
Broadband revenue edged up 0.6% to $47.5 million from a year ago.
Revenue from sales of equipment decreased 16.3% to $110.2 million due to lower volume of handsets sold.
StarHub expects 2018 service revenue to come in 1-3% lower y-o-y, while its service EBITDA margin is expected to range from 27-29% after the adoption of the SFRS(I) 15 accounting policy. Capex payment, excluding a spectrum payment of $282 million and building payment of $31.6 million, is expected to make up 11% of total revenue, it adds.
The telco has declared an interim dividend of 4 cents per share for the latest quarter, which will be paid on May 25 after its final dividend of 4 cents per share for FY17 is paid out on May 10.
The company also intends to pay a quarterly cash dividend of 4 cents per share for FY18.
On its latest set of quarterly results, StarHub highlights Enterprise Fixed as a “constant bright spot” given its third successive quarter of double-digit revenue growth.
“In line with our plan to grow the business, we will continue to roll out new robotics, digital platforms and cyber security solutions to support Singapore’s Smart Nation vision,” says the company in its results filing on Thursday.
Earlier today, StarHub announced MyRepublic has chosen it as the telco launch its mobile virtual network operator (MVNO) services in Singapore. “This gives us the ability to offer customers more choices, better address customer segment needs and grow our mobile business amid the evolving landscape,” says the telco.
Tan Tong Hai, group CEO of StarHub, is due to relinquish his current position and appointment as chief executive as of this month. He will be succeeded by Peter Kaliaropoulos, who will join StarHub from Zain Saudi Arabia as the telco’s group CEO from July 9.
Shares in StarHub closed 3 cents higher at $2.31 on Thursday.