Starhub net profit up 25.8% to $76.7m; raises EBITDA margin estimates

Service revenue guidance has been lowered to 3%-5%, from 8%-10% before.

Starhub has recorded a net profit of S$76.7m for the first six months of 2023, 25.8% higher than the S$60.9m in the same period in H1 2022.

Higher contributions from all business segments contributed to higher profits, Starhub said in its latest financial report.

An interim dividend of 2.5 cents for H1 2023 has been announced, whilst reiterating its dividend guidance of at least 5 cents per share, saying that it remains committed to its dividend policty.

Starhub has also updated its FY2023 guidance, raising its service EBITDA margin to “approximately 22%” from the original 20%, which it said was a result of ongoing efforts to realise operational efficiency and transform its business models.

“The raised margin guidance was also a result of reduced proportion of contributions from lower-margin businesses–namely, D’Crypt under the Cybersecurity Services segment and JOS Singapore within our Regional ICT Service segment– due to expected delays in project recognition,” Starhub said in an SGX filing.

“Consequently, with D’Crypt and JOS Singapore’s revised outlook, Starhub is reducing [its] FY2023 service revenue guidance to between 3%-5%, from the original 8%-10% growth, with minimal impact on EBITDA,” it added.

Service revenue grew 7.8% to S$938.1m in H1, from S$870.5m in H1 12022, lifted by a 12.8% revenue growth in mobile; 7.6% for broadband; 18.2% for entertainment; and 1.8% for enterprise.

Total revenue grew 4.5% to S$1.106b in H1, up from S$1.05b a year ago.

Average revenue per unit (ARPU) grew across most segments, despite what Starhub called “intense market competition.” Postpaid ARPU rose to S$32 from S$29; Broadband ARPU increased to S$34 from S$33; and Entertainment ARPU improved to S$44 from S$38.

Enterprise revenue was bolstered by a 4.6% increase in network solutions revenue, buoyed by a 20.6% growth in managed services, as well as a 7% growth in cybersecurity services revenue. This was offset by a 10% year-on-year decline in Regional ICT Services due to lower hardware sales.