StarHub Q4 profit down 14% on higher costs

StarHub added 5,400 post-paid mobile customers in the fourth quarter, bringing its base to 1.325 million.
StarHub added 5,400 post-paid mobile customers in the fourth quarter, bringing its base to 1.325 million.PHOTO: STARHUB

Lower revenue from services and equipment sales also cloud results

Lower revenue from services and equipment sales plus higher costs of services and traffic expenses hit StarHub's fourth-quarter earnings.

Net profit fell 14.3 per cent to $80.8 million while revenue in the three months to Dec 31 was $633.8 million, down 2.1 per cent from a year earlier.

Fourth-quarter operating expenses rose 3.9 per cent to $555.7 million.

Mobile revenue - which accounts for almost half of total services revenue - declined 2.3 per cent to $313 million in the quarter as pre-paid and roaming turnover fell.

StarHub added 5,400 post-paid mobile customers in the quarter, bringing its base to 1.325 million.

About 65 per cent of its post-paid customers were on tiered data plans, up from 61 per cent a year earlier. About 22 per cent of these users busted their data caps.

  • AT A GLANCE

  • REVENUE: $633.8 million (-2.1%)

    NET PROFIT: $80.8 million (-14.3%)

    DIVIDEND: 5 cents a share (unchanged)

Average revenue per post-paid user was $72, $1 higher from the fourth quarter last year. The average subscriber used 3.1GB of data per month last quarter.

Fourth-quarter Pay TV service revenue was $100 million, just 0.1 per cent down from a year earlier, due to lower subscription revenue after a net churn of 6,200 subscribers in the quarter, which left a base of 536,000 subscribers.

StarHub announced last month that subscribers will be able to access Netflix via their set-top boxes by next quarter.

Chief executive Tan Tong Hai told a results briefing yesterday: "We are not stopping at just Netflix, there are other 'flix-es' that we can look at. And we certainly hope that we can offer a wide range of choice."

Fixed network services revenue fell 2.9 per cent in the fourth quarter to $98 million, on lower data and Internet services turnover and lower usage of voice services.

Fourth-quarter earnings per share was 4.7 cents, from 5.5 cents a year earlier, while net asset value per share stood at 10.8 cents as at Dec 31, up from 8.6 cents as at Dec 31, 2014.

Full-year earnings came in at $372.3 million, up 0.5 per cent from 2014, on the back of a 2.4 per cent increase in revenue to $2.44 billion.

A final dividend of five cents a share was proposed, unchanged from a year ago.

StarHub said it intends to maintain an annual cash dividend of 20 cents a share this year.

The telco said it expects service revenue to grow by a "low single digit" in 2016, on steady growth in broadband and fixed network service revenues, while Pay TV revenues remain "resilient in spite of the competition".

Mr Tan said: "The mobile business has gone down in 2015 so I expect pre-paid (revenues) to stabilise and growth in post-paid to continue."

StarHub shares closed up 12 cents at $3.80 yesterday before the earnings announcement.

A version of this article appeared in the print edition of The Straits Times on February 17, 2016, with the headline 'StarHub Q4 profit down 14% on higher costs'. Print Edition | Subscribe