Telco StarHub's third-quarter earnings fell on the back of higher expenses such as cost of sales.
Net profit was $57 million for the three months to Sept 30, down 12.8 per cent on the previous year, it reported last night.
Revenue rose 3 per cent to $582.2 million, lifted by premium handset and smart home equipment sales.
But stable broadband revenue and growth in enterprise fixed services could not make up for service revenue declines in the mobile and pay-television segments.
StarHub, which has kicked off a group restructuring accompanied by layoffs, noted that the exercise would incur a one-off cost of about $25 million, including funding the retrenchment of 300 full-time employees. The cost is not expected to have any impact on its guidance for the 2018 financial year.
The hit to the bottom line came as a rise in operating costs outpaced the increase in turnover, due to a jump in the price of equipment sold, higher cost of services, and traffic expenses from roaming.
StarHub had about 1.39 million post-paid mobile users, or 1.7 per cent more than the year before.
The pre-paid customer base shrank, down 6.5 per cent to 836,000, with fewer tourists and foreign workers.
The pay-TV segment's revenue fell 14.1 per cent. About 423,000 households were subscribed, down 9.4 per cent.
AT A GLANCE
$582.2 million (+3%)
$57 million (-12.8%)
DIVIDEND PER SHARE (INTERIM):
4 cents (no change)
StarHub attributed the decline in pay-TV's average revenue per user to customer rebates after it stopped carrying certain channels this year. It made headlines for the loss of Discovery content, with a disagreement between the two parties on carriage fees. Enterprise fixed service revenue was up 13 per cent year on year to $124.6 million.
Earnings per share fell from 3.6 cents to 3.2 cents, while net asset value per share was 32.7 cents against 34.8 cents as of Dec 31 last year. The board has recommended an interim dividend of four cents a share for the quarter, the same as in the previous year.
Chief executive Peter Kaliaropoulos, who joined in July, said the results were in line with StarHub's market guidance in spite of "ever-increasing competitive pressures".
Net profit for the nine months was down 17.8 per cent to $181.7 million, while revenue inched up 1.1 per cent to $1.74 billion.
StarHub shares closed down one cent, or 0.51 per cent, to $1.94, before the results were released.