StarHub Q1 earnings dip 14.2%

Starhub's net profit fell 14.2 per cent to $54 million for the three months to March 31, compared with the same period last year.
Starhub's net profit fell 14.2 per cent to $54 million for the three months to March 31, compared with the same period last year.PHOTO: ST FILE

SINGAPORE - Telco StarHub's first-quarter earnings fell on the back of higher expenditure in its new cyber-security business and a decline in its mobile and pay TV takings.

Net profit fell 14.2 per cent to $54 million for the three months to March 31, compared with the same period last year.

Growth from its network solutions and cyber-security services boosted revenue by 6 per cent to $596.8 million, the firm reported on Friday evening (May 3).

Chief executive Peter Kaliaropoulos, who joined nine months ago, said the telco is still in the midst of its transformation programme, which is aimed at improving its customers' experience.

Some of the efforts include simplifying mobile and TV offers to provide clarity with no hidden charges, and making it easier for customers to transact on its mobile and online platforms.

"We are also migrating tens of thousands of cable customers every month to fibre TV," said Mr Kaliaropoulos at an earnings call after the release of the results.

He added that a great majority of customers have completed the migration and the firm is on track to cutting off cable services by June 30.

 
 

But he conceded that "very few thousands" of customers living in landed homes may see some delays as their switch from cable to fibre would require installation of new fibre ducts. This could mean digging up some front yards.

"We are definitely not in the business of throwing customers away," he said, adding that the telco will work with the fibre network operator NetLink Trust to provide access to these customers' homes.

Mr Kaliaropoulos noted that despite increased competition from more mobile providers, post-paid mobile subscribers have grown 5.4 per cent from a year ago to 1.44 million.

However, this did not translate into higher earnings. Lower IDD, voice and excess data usage revenue, data subscription and value-added services revenue caused a slide of 5.3 per cent to $192.3 million in the mobile segment. Post-paid mobile average revenue per user (ARPU) at $39 for the quarter was $4 lower compared with the same period last year mainly due to lower voice and data usage revenue.

Broadband service revenue was flat at $47.1 million for the quarter even as the firm added 27,000 customers year on year, bringing the base to a high of 495,000.

The number of pay TV subscribers continued to decline steadily by 15,000 households over the quarter to 394,000. Turnover from the pay TV segment dropped 12.4 per cent to $70.7 million as customers exited long-term pay TV contracts for alternative sources of content and entertainment.

Earnings per share fell from 3.5 cents to 3 cents, while net asset value per share was 33.6 cents against 30.5 cents as of Dec 31 last year.

The telco intends to pay a dividend of at least 9 cents per ordinary share, at a rate of 2.25 cents per quarter for this financial year.

StarHub shares added two cents, or 1.28 per cent, to close at $1.58 before the results were released.