StarHub Q2 profit down as services revenue shrinks

StarHub is up against competitors such as streaming services and Internet platforms, including Netflix and Amazon Prime Video.
StarHub is up against competitors such as streaming services and Internet platforms, including Netflix and Amazon Prime Video.ST PHOTO: DESMOND WEE

Lower mobile, pay TV and broadband services revenue hit second-quarter earnings at telco StarHub, it reported yesterday.

Net profit for the three months to June 30 fell 21 per cent from a year ago to $85.7 million, as turnover slipped by 1.1 per cent to $579.1 million. It led to the firm recommending a lower interim dividend at four cents per share, down from five cents a year earlier.

Pay TV saw the steepest revenue slide among its divisions, falling 7.9 per cent year-on-year to $87.9 million as its subscriber base shrank by 10,000 to 477,000 from the first to the second quarter.

"In our pay TV business, we face challenges from growing piracy and alternative viewing options," the telco noted.

It is up against competitors such as streaming services and Internet platforms including Netflix, which came to Singapore in January last year, and Amazon Prime Video.

A lower subscriber base also hit broadband services revenue, which posted a 3 per cent decline to $52.8 million from a year earlier.

StarHub said it anticipates "prolonged competition" for its broadband business and has introduced a new plan to cater to customers requiring faster speeds.

  • AT A GLANCE

  • REVENUE: $579.1 million (-1.1%)

    NET PROFIT: $85.7 million (-21%)

    INTERIM DIVIDEND: Four cents per share (-20%)

Mobile revenue, which accounted for 52.3 per cent of total turnover in the quarter, dipped 0.9 per cent from a year earlier to $302.7 million. StarHub noted that the fall was mainly due to the lower usage revenue from voice, IDD and roaming services.

The declines in various business segments were partly offset by higher sales of equipment and enterprise fixed service revenue.

Chief executive Tan Tong Hai said: "In the quarter, we announced our acquisition of Accel to enhance our enterprise-grade cyber security offerings. This acquisition dovetails perfectly with our strategy to grow our enterprise business and demonstrates our push for inorganic growth."

Second-quarter operating expenses dipped by 0.1 per cent year-on-year to $467.2 million, the telco added.

Quarterly earnings per share fell from 6.3 cents last year to five cents while net asset value per share came in at 22.8 cents as at June 30, up from 11.3 cents at Dec 31.

Earnings for the first half were down by 21.2 per cent from a year ago to $158.8 million, amid a 0.4 per cent drop in first half revenue to $1.17 billion.

The counter closed one cent lower at $2.70 yesterday, before the results were announced.

A version of this article appeared in the print edition of The Straits Times on August 03, 2017, with the headline 'StarHub Q2 profit down as services revenue shrinks'. Print Edition | Subscribe