StarHub’s Q4 earnings tumble 14.3% to $80.8m

Blame it on climbing costs, tapered revenue.

A tapered revenue on top of rising costs has pushed StarHub’s earnings in the last quarter of to tumble 14.3% YoY and 31.9% QoQ to $80.8m. For the full financial year, though, earnings showed an uptick of 0.5% to $372.3m.

According to OCBC, StarHub’s revenue displayed a 2.1% YoY growth and a 5.1% QoQ uptick to $633.8m. For FY15, revenue inched up 2.4% to $2.44b. Coupled with a costs that climbed by $23.9m, earnings before interest, tax, depreciation, and amortisation crashed 18.4% YoY and 21.1% QoQ to $157m.

Going forward, StarHub believes that service revenue will rise in the low single digit range. Management has guided for group EBITDA margin to sink to 31% of service revenue though, as an uncertain economic outlook could impact growth in StarHub’s consumer and enterprise businesses. However, it has maintained capex guidance at 13% of total revenue.

For Mobile, StarHub anticipates its customer base on tiered data plans to ramp up, though usage-based revenue like roaming may dip due to availability of other options. The company also sees growth in its Broadband business as it continues to leverage on its cable broadband network to provide customers with redundancy over NBN.

For Pay TV, the business is likely to stay robust thanks to its offering of branded content, especially sports.

Lastly, for the Enterprise space, the need for increased diversity and security will drive demand for its solutions.