StarHub Q3 net rises 2.6% to S$97.7 million

Singapore

A SPIKE in handset sales, driven by the launch of new iPhone models, has helped StarHub record a 2.6 per cent rise in net profit to S$97.7 million for the quarter ending Sept 30.

Revenue came in 2.3 per cent higher at S$592 million, even though the broadband business took a hit from stiff competition.

The pricing war resulted in broadband revenue falling 17.4 per cent to S$49.2 million, even though there was an increase in subscriber base.

Already, the company said in its outlook that it expects the pricing competition to continue.

Still, the lower broadband revenue in Q3 2014 was cushioned by revenue from sales of equipment, which soared 73.5 per cent to S$39.3 million in the same period.

Mobile service revenue was 0.9 per cent higher at S$310.9 million for the third quarter, due to higher earnings from post-paid services, which offset the lower revenue from pre-paid services.

Pay-TV revenue for the three months ending September also went up by 2 per cent to S$97.4 million. StarHub attributed this to higher subscription revenue from an increased subscriber base.

Fixed network services revenue rose 2.7 per cent to S$95.2 million for the quarter, lifted by higher earnings from data and Internet services, even though voice services revenue was lower.

For the quarter, the group's earnings before interest, tax, depreciation and amortisation (Ebitda) was 2.2 per cent higher at S$190.9 million, compared with the corresponding period in the previous year.

Earnings per share for Q3 this year was 5.7 Singapore cents, up from 5.5 cents in the year-ago period. For the first nine months of the year, it was 16.0 cents, lower than the 16.7 cents in the corresponding period in 2013.

The group declared an interim cash dividend of 5 Singapore cents per share, the same as last year's.

StarHub CEO Tan Tong Hai noted that in spite of the intense competition in the residential broadband environment, the group continued to see growth in other areas. He added that the company had grown its fibre broadband market share and lowered the churn rate.

"As our 4G customer base grows, we continue to invest in upgrading our LTE-Advanced network to serve them better," said Mr Tan, who pointed out that StarHub is the first local operator to support simultaneous high-speed 4G data connectivity and crystal-clear VoLTE calls on the new iPhones.

Growth in revenue will continue to be driven mainly by fixed network and mobile services going forward, the company said.

In particular, the tiered data subscribers in its mobile business have expanded by 59 per cent of the group's post-paid mobile customer's base as at end September this year. This would further increase growth in data traffic and subscription revenue, noted the company.

The group intends to maintain its annual cash dividend payout of 20 Singapore cents per share for 2014.

StarHub's counter closed 6 Singapore cents higher at S$4.20 before the release of its results on Wednesday.