Higher staff costs were partly to blame for a plunge in fourth-quarter earnings at StarHub.
Net profit fell 74 per cent to $14.1 million for the three months to Dec 31 with a rise in expenses more than offsetting the modest 2.2 per cent uptick in revenue to $649 million.
Full-year net profit dropped 27.1 per cent to $249 million on flat revenue of $2.4 billion.
Besides a one-off provision for staff benefits - "to rationalise and retain talent in recognition of the business challenges and operating conditions" - the telco forked out a heftier sum for operating lease in the quarter. This was due to contractual costs related to the cable network amid plans to shift customers to fibre broadband and Internet Protocol TV services.
While quarterly service revenue was slightly up on the same quarter last year, the gain came from the growth of enterprise fixed services. Turnover from mobile and pay-TV services both fell, while broadband service revenue held steady, even as market competition put the squeeze on margins.
Earnings per share for the fourth quarter came in at 0.7 cent, down from 3.1 cents a year earlier, while net asset value per share was 19.7 cents as of Dec 31, up from 11.3 cents.
Chief financial officer Dennis Chia told an earnings briefing yesterday that the acquisition of cryptographic and cyber security firm D'Crypt - announced last December - is expected to help with the coming year's top line.
AT A GLANCE
$2.4 billion (+0.2%)
$249 million (-27.1%)
Total dividends a share:
16 cents (-20%)
"We would effectively have 11 months of consolidation impact on D'Crypt," he said. "Without the D'Crypt impact, you would be looking at 2 per cent to 4 per cent decline in service revenue."
Service revenue for the full year dipped 0.6 per cent and the firm expects a year-on-year decline of between 1 per cent and 3 per cent for this year.
StarHub has proposed a final dividend of four cents a share, down from five cents a share the year before.
The company said it intends to pay out a quarterly cash dividend of four cents a share for this year, or 16 cents a share for the year.
StarHub shares ended 12 cents, or 4.38 per cent, higher at $2.86 before the announcement.