StarHub profits fall 11.5% to $76.2m in Q3

Its mobile and Pay TV segments continue to weigh down company performance.

StarHub’s Q3 profits fell by 11.5% YoY from $86m to $76.2m, according to its financial report.

According to OCBC Investment Research, total revenue dipped by 0.8% YoY to $580.4m but would have been worse if not for the 11.3% growth in the enterprise fixed business.

Profits from its operations also slipped 9.9% YoY from $112.7m to $101.5m.

OCBC said for the past three quarters, growth from enterprise fixed of 5.0% and sales of equipment and 5.8% were offset by declines in mobile by 0.8%, Pay TV by 7.7% and broadband by 1.8%.

"Mobile and Pay TV continues to be under pressure from new entrant and alternative viewing platforms, respectively," OCBC analyst Eugene Chua said.

Operating expenses grew 0.4% YoY to $481.8m on higher depreciation and amortization. For the nine months of the year, opex grew 1% to $1.45b due to the higher cost of equipment sold and services. This was offset by lower staff and marketing costs.

Here's more from OCBC Investment Research:

As we expect weaker 4Q17 results, we opt to keep our forecasts largely unchanged for now despite above expectations 9M17 performance.

In addition, while enterprise segment seems to be gaining traction as it ramps up on its ICT related business with a suite of solutions offered, we prefer to wait for consistent performance before reviewing this segment’s ability to offset weakness from the mobile and Pay TV segments.

Hence, maintain SELL with a fair value (FV) of $2.30.