StarHub Q1 net profit down by 24% to $30.5 million

Net profit fell by 24 per cent year on year to S$30.5 million for the three months to March 31.
Net profit fell by 24 per cent year on year to S$30.5 million for the three months to March 31.PHOTO: ST FILE

SINGAPORE (THE BUSINESS TIMES) - Mainboard-listed telco StarHub saw its first-quarter earnings continue to slide, on the back of lower service Ebitda and losses in fledgling enterprise units, according to a business update on Tuesday (May 4).

Net profit fell by 24 per cent year on year to $30.5 million for the three months to March 31, while revenue was down by 3.8 per cent to $487.1 million, stymied by the consumer mobile business and fewer security projects.

Service revenue came in at $375.7 million for the quarter, lower by 7.2 per cent, when equipment sales were excluded.

Chief executive Nikhil Eapen said in a statement that the quarter "remains challenging with ongoing travel restrictions and headwinds from the global pandemic".

Consumer mobile service revenue dropped 20.8 per cent to $129.6 million, which StarHub attributed to the impact of "intense" competition.

Postpaid mobile average revenue per user (ARPU) stood at $28, against $34 in the year-ago period, while the subscriber base shrank to 1.42 million, from 1.47 million before.

Pay-TV income contracted by 4 per cent year on year as the number of customers decreased from 327,000 to 306,000.

Broadband service was the only consumer segment to post growth, as revenue increased by 12.6 per cent on lower subscription discounts, despite a decline in users from 502,000 to 495,000 lines.

The enterprise business managed an uptick of just 0.9 per cent, to $154.2 million - even though previously-deferred projects were re-committed for 2021 and beyond, which lifted network solutions income.

That's as StarHub's cybersecurity revenue - which is underpinned by Ensign InfoSecurity, a joint venture with Temasek Holdings - shrank by 32 per cent on project delays.

Cybersecurity and the newly consolidated regional infocomm technology arm recorded operating losses to the tune of a combined $4.1 million.

Overall, StarHub reported free cash flow of $97.4 million for the three months, lower by 18.2 per cent year on year, while the net debt-to-Ebitda ratio improved to 1.29 times, compared with 1.41 times as at Dec 31, 2020.

At its annual general meeting last week, the board had reaffirmed guidance for a full-year payout of S$0.05 a share, the same as the year before - though dividends have declined from $0.09 in 2019 and $0.16 before that.

StarHub closed on Tuesday at $1.30, down by $0.03 or 2.26 per cent, before the results.