StarHub's profits fell 14.2% to $54m in Q1

It blamed lower revenues from mobile and Pay TV.

StarHub began 2019 on a dismal note after profits dropped 14.2% YoY to $54m in Q1 from $63m in 2018, an announcement revealed. However, revenue edged up 6% YoY from $563m to $596.8m.

The telco attributed its profit dip to lower revenues arising from its mobile and Pay TV. On the other hand, StarHub’s s strong revenue performance was mainly due to higher revenue from its enterprise business and sales of equipment, partially offset by lower revenue from Mobile, Pay TV and Broadband.

Also read: StarHub's profits dropped 26.2% to $201.5m in 2018

Enterprise business service revenue for the quarter grew $16.6m or 14.1% mainly due to higher revenue from managed services, voice services and cyber security services. Whilst revenue from sales of equipment increased YoY by 33.2% thanks to higher handset revenue and sales of smart home equipment.

Against the corresponding period in 2018, mobile service revenue in Q1 2019 was lower by $10.7m or 5.3%. The decrease was attributed to lower IDD, voice and excess data usage revenue and lower data subscription and value-added services (VAS) revenue, partially offset by the increase in plan subscription and enterprise SMS revenue.

Pay TV service revenue decreased YoY by $10m or 12.4% in Q1 2019 due to lower subscriber base. Broadband service revenue of $47.1m in Q1 was stable compared to the corresponding period last year.

According to StarHub’s CEO Peter Kaliaropoulos, the telco managed to deliver significant growth in post-paid mobile subscribers to 1.44 million, as well as the highest number of residential broadband customers to 495,000 customers, despite increased competitive intensity.

“Whilst we are pursuing our fair market share, we are also addressing our operating cost structure for our core mobile and data connectivity businesses. Overall, our service EBITDA margin increased to 33.7% YoY. However, as cyber security operations require considerable resources to deliver growth, the higher operational expenditure from Ensign coupled with decline in revenues for Mobile and Pay TV services and higher depreciation, resulted in net profit after tax (NPAT) at $49m, a 23% decline YoY. Excluding the impact of cyber security services, NPAT would be $61m for Q1,” Kaliaropoulos commented.

Also read: StarHub says goodbye to cable TV

As the overall Pay TV market in Singapore continues to shrink due to piracy and alternative viewing options, StarHub TV will reportedly continue to offer content whilst managing content costs. The telco is said to be committed to migrating its customers from cable TV to IPTV, and ongoing improvements are underway, such as the reduction in subscription prices for HBO channels.