StarHub 2Q18 net profit fell nearly 23 percent on lower contribution from mobile segment

StarHub billStarHub bill

Singapore telco operator StarHub said its second quarter net profit fell 22.8 percent on-year to S$61.7 million, despite a revenue increase, as the contribution from the higher-margin mobile segment decreased.

Revenue for the quarter ended 30 June rose 5.4 percent from the year-earlier period to S$597.3 million, mainly due to higher revenue from the enterprise fixed segment and from sales of equipment, partially offset by lower revenue from mobile and pay TV services, the filing to SGX after the market close on Tuesday said.

But it noted that profit from operations in the second quarter fell 20.1 percent on-year to S$84.2 million, mainly due to lower mobile revenue, which has higher margins, compared with managed services and the sales of equipment.

Enterprise fixed service revenue rose 22.4 percent on-year to S$122.5 million on the consolidation of Accel Systems & Technologies (ASTL) from July 2017 and D’Crypt from January 2018, it said. Excluding those, the segment’s service revenue would have increased by 8.5 percent on-year in the quarter, primarily driven by higher managed services revenue, it said.

Revenue from sales of equipment for the quarter rose 26.7 percent on-year to S$130.5 million, primarily due to higher volume of premium handsets sold and sales of smart home equipment, StarHub said.

Mobile revenue falls

Mobile revenue fell 6.6 percent on-year in the quarter to S$213.5 million, StarHub said.

“This was mainly due to lower IDD, voice and excess data usage revenue, and lower plan subscription revenue due to a higher proportion of revenue allocated to equipment revenue and recognised in prior periods, lower subscriber base and a higher mix of SIM Only plans. This was partially mitigated by higher revenue from roaming and value-added services,” the filing said.

Post-paid mobile ARPU, or average revenue per user, was S$45 in the quarter, down by S$4 from the year-earlier period, mainly on lower excess data usage revenue from higher take-up of DataJump and unlimited weekend data plans, higher mix of SIM Only plans and higher proportion of revenue allocated to equipment revenue and recognised in prior periods, StarHub said.

Pre-paid mobile ARPU was S$13 at the end of the quarter, down from S$15 in the year-earlier quarter on lower voice and IDD usage, it said.

Its post-paid registered mobile customers was at 1.376 million as of 30 June, up from 1.365 million at end-March, but down from 1.385 million at the end of the second quarter of 2017, it said. Its pre-paid customers fell to 882,000 at end-June, from 918,000 at end-March and 905,000 at the end of the second quarter of 2017, it said.

Pay TV revenue falls

Pay TV revenue fell 4.8 percent on-year to S$84.7 million, mainly on a lower subscriber base, although broadband service revenue was stable on-year at S$46.1 million in the quarter, it said.

Residential pay TV household customers were at 438,000 at the end of the quarter, down 8.1 percent from the year-earlier period, it said.

Pay TV ARPU rose to S$53 in the quarter, from S$51 in the year-earlier period, mainly on World Cup subscriptions, it said.

StarHub declared an interim dividend of S$0.04, unchanged from the year-earlier level.

In its outlook statement, StarHub kept its guidance for 2018 service revenue to fall 1-3 percent on-year.

“In the mobile business, subscription and mobile data will continue to be revenue drivers while voice and IDD are expected to continue to decline. We anticipate competition to further intensify as customers have more options of MNOs and MVNOs to choose from,” it said. “With larger data plans available in the market, excess data monetisation opportunities will be lower.”

For the first half, StarHub reported net profit fell 19.9 percent on-year to S$124.7 million, while revenue rose 0.1 percent to S$1.16 billion.

Get Shenton Wire headlines in your inbox