StarHub – BT

StarHub Q4 net profit drops 11%; full-year revenue hits record

A 17 per cent surge in pay-TV revenue and single- digit sales growth across three other business lines lifted StarHub Ltd to a record full year revenue of $2.128 billion for its fiscal year 2008.

But increased acquisition and retention costs in the first half of the year, as well as higher pay-TV content costs put a drag as full year net income fell 6 per cent to $311 million, from $330 million. Full year earnings per share, on a diluted basis, fell 2 per cent to 18.16 cents, from 18.54 cents.

StarHub yesterday announced the results of its fourth quarter and full year. For the three months ended Dec 31, 2008, sales dipped 0.4 per cent to $537 million, from $539 million in the year-ago period.

Net income fell 11 per cent to $87 million, from $98 million. Earnings per share, on a diluted basis, fell 11 per cent to 5.09 cents, from 5.73 cents.

‘In the fourth quarter, we managed through an increasingly volatile business environment, as the Singapore economy continued to contract – yet we ended the full year with a larger customer base and a relatively strong fourth quarter,’ said StarHub CEO Terry Clontz.

StarHub’s full year sales improved by 6 per cent its previous record of $2.014 billion achieved in 2007. Earnings before interest, taxes, depreciation and amortisation (Ebitda) rose 0.2 per cent to $644 million.

The company is recommending a final dividend of 4.5 cents per share, bringing the total dividends to 18 cents per share for its fiscal year 2008.

StarHub lifted sales across its four key business segments in 2008, led by pay-TV which registered the highest revenue growth at 17 per cent. Mobile, broadband and fixed network revenue grew by four, three and seven percentage points respectively.

Mobile business remained the major revenue contributor at 51 per cent. Pay-TV, broadband, fixed network services and sales of equipment contributed 19, 12, 14 and 5 per cent respectively to the mix.

StarHub also swelled its customer base in key segments. Its mobile customer base grew by less than one per cent to 1,765,000 subscribers at the end of Q4. Pay TV subscribers increased 4 per cent to 524,000; while broadband customers grew 8 per cent to 373,000.

On Monday, rival SingTel announced it grew its mobile phone subscriber base in Singapore by 26 per cent to 2.94 million at the end of 2008, from a year ago.SingTel, which last year scored a coup with its exclusive Apple iPhone deal, is reportedly set to launch the highly-anticipated first version of the Google phone here.

Mr Clontz told BT that StarHub will be focusing on the second-generation of the Google phone instead, and could launch that version before June this year. As for the iPhone, it is ‘still in dialogue with Apple’ but is ‘confident’ of launching it this year.

This year will also see StarHub bidding to become the operating company for Singapore’s next-generation fibre-optic broadband infrastructure.

StarHub last year lost out to a consortium involving SingTel in the first phase of that project. The second-phase winner is expected to be announced by March.

Current Analysis senior analyst Soh Siow Meng said that StarHub, as it plys primarily in the local market, will face challenges posed by competition, expected dip in foreigner population and belt-tightening by businesses and consumers in the coming year. ‘However, there is still room for growth,’ he said.

StarHub shares closed unchanged at $2.02 yesterday.

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