Mainboard-listed telco StarHub saw its third-quarter bottom line hold steady, as minority interests absorbed a slip in profits, according to results released yesterday.
Net profit for the three months to Sept 30 was up by 1.7 per cent year on year at $58 million, as revenue decreased 1.6 per cent to $572.6 million, with earnings per share flat at 3.2 cents.
Profit attributable to both shareholders and non-controlling interests was down by 2.4 per cent to $56.6 million.
Service revenue was down by double digits in the mobile and pay-television segments, and also fell in the broadband division.
But turnover from enterprise business grew by 16.7 per cent despite a decline in contributions from network solutions, as revenue from the fledgling and loss-making cyber-security arm more than doubled.
StarHub owns 60 per cent of Ensign InfoSecurity, a cyber-security joint venture with Singapore investment firm Temasek that comprises former subsidiaries Accel Systems & Technologies and D'Crypt. During the last quarter, StarHub and D'Crypt's founding shareholders sold their shares in D'Crypt to Temasek for $100 million, turning it into an indirect subsidiary of Ensign.
StarHub has downgraded its full-year service revenue forecast to a drop of 2 per cent to 3 per cent, down from its earlier forecast of stable to 2 per cent decline, as service revenue for the nine-month period came in lower by 3.9 per cent.
Mobile post-paid average revenue per user (ARPU) slipped to $39, down from $44 in the same period last year, while the subscriber base fell quarter on quarter to 1.44 million on the termination of "low-ARPU enterprise lines".
For the nine months, net profit tumbled by 16.6 per cent to $151.5 million, as revenue dipped by 1.2 per cent to $1.72 billion.
"Year-on-year results reflect declines in mobile and TV revenues but higher demand for cloud, data network services, digital and cyber-security solutions is driving strong growth in our enterprise segment," chief executive Peter Kaliaropoulos said in a statement.
StarHub's strategic transformation, which was rolled out soon after he joined the company in July last year and included the retrenchment of 300 full-time employees, "is tracking well and may likely exceed the targeted $210 million gross savings by FY2021", he said.
"Some of the savings are being redirected to fund our digital transformation and new acquisition opportunities," he added.
The board has recommended an interim dividend of 2.25 cents per share, down from four cents in the same period last year, in line with a trimmed dividend policy announced previously.
Market data shows StarHub underperforming the telecommunications sector on the Singapore Exchange (SGX).
It had a negative total return of 21.4 per cent in the year to Oct 31, SGX noted in a report on its My Gateway investor education portal - against the sector's positive return of 6.7 per cent, which was buoyed by Singtel and NetLink NBN Trust.
StarHub closed up 1.5 per cent to $1.32 yesterday before the results were released.