StarHub Q1 profits down 14.9% to $61.5m

It continued to be weighed down by lower revenue of mobile and pay TV services.

StarHub’s profits for the first quarter slipped 14.9% YoY from $72.3m to $61.5m, it said in its financial statement.

Its revenue dipped 4.7% YoY to $561m mainly due to lower revenue from Mobile and Pay TV services, coupled with lower sales of equipment. This was partially offset by higher revenue from Enterprise Fixed and Broadband services.

Mobile service revenue fell 7.1% to $15.6m mainly due to lower IDD, voice and excess data usage revenue, lower plan subscription revenue driven by a higher mix of SIM Only plans, and smaller subscriber base, coupled with a higher amortisation of contract assets.

Pay TV service revenue slipped 10% to $80.7m due to a smaller subscriber base. Broadband service revenue was 0.6% higher at $47.5m.

“Enterprise Fixed has been a constant bright spot with a 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,” said StarHub.

“We have also announced a partnership with a mobile virtual network operator as part of our overall mobile strategy. This gives us the ability to offer customers more choices, better address customer segment needs and grow our mobile business amid the evolving landscape,” it added.

Enterprise Fixed service revenue grew 18% to $117.5m thanks to the consolidation of Accel Systems & Technologies Pte Ltd (ASTL) from July 2017 and D’Crypt Pte Ltd (D’Crypt) from January 2018.

Excluding ASTL and D’Crypt, revenue would have dipped 0.7% primarily due to lower revenue from voice services. StarHub noted that staff costs grew 2.6% due to the consolidation of ASTL and D’Crypt.

Meanwhile, revenue from sales of equipment fell by 16.3% YoY primarily due to lower volume of handsets sold..

The telco’s postpaid mobile subscriber base shrank by 2% to 1.365 million subscribers after the quarter’s net churn of 3,000 subscribers. Postpaid mobile ARPU also dipped by $2 to $43 mainly due to lower excess data usage revenue from higher take-up of DataJump and unlimited weekend data plans, and higher amortisation of contract assets.

The overall average smartphone data usage increased to 4.9GB, up from 3.9GB last year. Post-paid mobile monthly average churn rate increased from 0.9% to 1.0%.

The scenario is different for its prepaid mobile customer base, which grew by 2.1% (20,000 customers) to 918,000 customers. Growth in base YoY was driven by effective channel promotions. However, prepaid mobile ARPU still fell $2 to $13 due to lower voice and IDD usage.

StarHub intends to pay an interim dividend of 4 cents per share which will be paid on 25 May 2018.