StarHub second quarter profit up 34% to S$78mn

Despite growth in profit, the company’s Pay TV revenue dipped to S$92.3mn.

StarHub Ltd on Thursday announced its results for the second quarter and first half ended 30 June 2011. 

Operating revenue, for the quarter, came in at S$569 million, similar to a year ago. This is despite the absence of the 2010 FIFA World Cup event and the price reduction of the Sports group package from S$25 to S$12 in June 2010. On a half-year basis, it was at S$1,127 million. The Group’s EBITDA increased 16% to S$164 million for the quarter and rose 25% to S$323 million for the half year. EBITDA margin as a percentage of service revenue was 30.4% for the quarter, which was a 4.4 percentage points increase from the year before. On a half-year basis, it was at 30.2%. 

Profit from operations, for the quarter, saw an increase of 23% to S$96 million and net profit after tax was at S$78 million, translating to a jump of 34% year-on-year (YoY). Looking at the half-year, profit from operations increased 37% to S$186 million while net profit after tax rose 46% to S$147 million. Free cash flow came in at S$140 million, for the quarter, compared to S$110 million in 2Q-2010. Cash capital expenditure (capex) was S$3 million lower at S$42 million compared to a year ago. On a half-year basis, free cash flow came in higher by 18% to S$272 million while cash capex was lower by 10% at S$84 million. 

Business Highlights
For the quarter and half-year, Mobile services revenue increased 3%. Broadband revenue rose 3% for the quarter and 2% for the half-year, while Fixed Network services revenue increased 2% for the quarter and 3% for the half-year.

Mobile revenue grew to S$302.5 million from S$294.0 million YoY and to S$598.1 million for the half-year period. Post-paid mobile services revenue was 4% higher at S$239.2 million. Comparing to 2Q2010, pre-paid mobile services revenue decreased 3% to S$63.3 million in 2Q2011. YoY, post-paid ARPU increased S$1 to S$73, while pre-paid ARPU decreased S$1 to S$20 in the quarter.

Pay TV revenue decreased to S$92.3 million from S$109.6 million a year ago. The lower revenue was due to the absence of one-off revenue from the 2010 FIFA World Cup event and reduced pricing from our Sports group package since June 2010. As a result, Pay TV ARPU decreased to S$49. For the quarter, our customer base was up 1% YoY to 544,000, according to a StarHub report.

Broadband revenue increased 3% to S$61.0 million YoY. The residential broadband customer base grew 6% YoY, ending the quarter with 431,000 customers. However, the higher mix of subscribers on the lower speed price plans and promotional offers of the hubbing packs to drive take-up in new customer segments contributed to the S$3 ARPU decrease to S$45 this quarter.

Fixed Network revenue increased 2% to S$83.4 million from a year ago. Voice services revenue increased 9% to S$14.6 million YoY due to higher subscription of local voice services and higher inter-connection revenue from international carriers.

"We are pleased with the 46% improvement in our profits for the first half. We also saw customer growth in all our lines of business and continue to strengthen our leadership position as the leading info-communications & entertainment provider, with an 8% increase in our triple-service hubbing households,” said Mr Neil Montefiore, CEO of StarHub.