SINGAPORE (THE BUSINESS TIMES) - Singapore telco StarHub on Thursday (Aug 5) reported a double-digit decline in earnings for the first half of the year, dragged down by lower wage subsidy payouts compared with the year before.
Net profit shrank by 12.3 per cent to $67.9 million for the six months to June 30, despite the cyber-security segment notching operating profits against a year-ago loss.
Service revenue dipped by 0.2 per cent to $779.5 million on declines in mobile and entertainment turnover. Overall revenue inched up by 1.5 per cent to $973.7 million as customer upgrades to 5G premium handsets boosted equipment sales.
Based on the outlook, the group maintained its guidance for full-year service revenue to be stable year on year.
StarHub is also on track to achieve cost savings of $273 million from a three-year strategic transformation that ends in October; the sum saved surpasses its initial $210 million goal. The telco plans to launch a fresh five-year road map in November.
The year-on-year earnings decline came as other income decreased by 65.8 per cent on the tapering of the Jobs Support Scheme (JSS). Finance expenses ticked up on the interest costs of higher borrowing, as well as financial liabilities from buying infocomm technology provider Strateq.
Excluding the effect of the JSS, underlying net profit would have risen by 6.6 per cent to $67.3 million, from $63.2 million before, StarHub said.
Still, revenue from mobile service, which used to drive StarHub's income, dropped by 15.4 per cent year on year to $259.8 million, as the pandemic's impact on travel ate into revenues from roaming services and tourist and foreign workers' prepaid lines.
Post-paid mobile average revenue per user, a key metric for consumer telecom services, slipped to $28 a month, from $32 the year before. The number of post-paid mobile subscriptions dipped to 1.44 million lines, from 1.45 million previously.
Enterprise services overtook the mobile segment to contribute $333.6 million in revenue, with help from Strateq, which StarHub bought in March 2020. Cyber-security and managed services also recorded a higher turnover year on year.
Earnings per share fell to 3.7 cents, from 4.2 cents before, while net asset value was 32.1 cents a share, against 31.1 cents as at Dec 31, 2020.
The board has declared an interim dividend of 2.5 cents, unchanged from the year before. The dividend will be paid out on Aug 31.
StarHub shares rose 0.81 per cent to close at $1.24, before the results.
