StarHub – BT

StarHub lifts Q2 earnings 21% to $77m

THE ceasefire following last year’s all-out marketing war, coupled with higher sales from its mobile and fixed network businesses, helped lift StarHub’s second-quarter net income 21.1 per cent to $77.8 million.

Earnings per share for the three months ended June 30 rose to 4.55 cents, from 3.76 cents in Q2 2008, while operating revenue grew a marginal 0.2 per cent to $532.4 million.

Singapore’s second-largest operator has proposed an interim dividend of 4.5 cents per share, unchanged from Q1. It will need to top up another 9 cents or more to fulfil its commitment of paying at least 18 cents in dividends this year.

StarHub’s four businesses registered mixed fortunes in Q2, although they attracted more customers across the board.

‘We’re certainly not out of the woods yet when it comes to the impact from the economy,’ said StarHub CEO Terry Clontz.

The company’s mobile sales – which account for half its revenue – grew one percentage point to $271.9 million in the second quarter. While the operator continues to grow its pre-paid revenue, sales from its post-paid subscribers slid nearly 2 per cent during the quarter to $207.6 million.

Mirroring the trend in Q1, StarHub said some of its mobile customers are reining in their voice, roaming and IDD usage during the downturn.

The company added 34,000 new mobile users in Q2 to take its total subscriber tally to 1.85 million.

As with the previous quarter, StarHub’s fixed network business registered the biggest improvement during the April-June period. Sales from this unit rose 7.3 per cent from last year to $80 million.

However, revenue from StarHub’s broadband and pay-TV businesses both fell. Sales from StarHub’s broadband unit slid 3.2 per cent to $60.3 million in the second quarter with more customers going for cheaper broadband plans and subscription discounts instead of free gifts.

The operator’s pay-TV sales slipped 1.5 per cent in Q2 to $100.5 million. A lower take-up of its sports and premium channels, as well as higher subscription discounts, was cited as some of the reasons for the decline. However, it added 3,000 new customers during the period to lift its cable TV subscriber base to 530,000.

A star attraction in StarHub’s cable programming line-up – the Barclays Premier League (BPL) – is set to go under the hammer later this year and the company is confident that it can score another victory.

‘We understand that it (BPL) is a significant value driver for our business. We should be able to retain the rights,’ Mr Clontz said in a conference call yesterday evening. ‘If we don’t, I may have to opt for an early retirement,’ he quipped.

The StarHub CEO of 10 years officially announced his retirement last month. From next January, former M1 chief Neil Montefiore will become the operator’s new chief.

For the first half of this year, StarHub’s net profit rose 11 per cent to $160.3 million, while operating revenue slid 0.3 per cent to $1.06 billion. StarHub shares yesterday closed unchanged at $2.25 before its earnings were released.

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