StarHub – Phillip

2Q FY2009 results. StarHub reported 2Q FY2009 operating revenue of S$532.4m (+0.2% yoy) and net profit of S$77.8m (+21.1% yoy). Despite the slight increase in revenue, net profit rose by a larger percentage because of lower operating costs and interest expenses. It also declared an interim dividend of S$0.045 per ordinary share, which was unchanged from 2Q FY2008.

Performances of the various business units. Despite the economic downturn as well as competition from SingTel and M1, StarHub reported an increase in the number of customers. As at 30 June 2009, the number of customers for its mobile, Pay TV and broadband businesses were 1,849,000, 530,000 and 389,000 respectively.

StarHub reported mixed performances in its business units. Two business units reported improvements: mobile revenue was S$271.9m (+1.0% yoy) and fixed network service revenue was S$80.0m (+7.3% yoy). Post-paid mobile revenue fell by 1.9% to S$207.6m because customers made fewer domestic and international calls. However, pre-paid mobile revenue rose by 11.5% to S$64.3m due to higher usage from a larger number of customers. Meanwhile, fixed network service revenue increased due to greater take-up of domestic and international leased lines.

Three business units reported worse performances: Pay TV revenue was S$100.5m (-1.5% yoy), broadband revenue was S$60.3m (-3.2% yoy), and sale of equipment revenue was S$19.8m (-14.9% yoy). Pay TV was affected by lower advertising revenue. In addition, broadband revenue decreased as customers opted for subscription discounts. Moreover, consumers were more cautious in their purchases of handsets during the economic slowdown.

Profit margin. Net profit margin decreased from 15.5% in 1Q FY2009 to 14.6% in 2Q FY2009. This was mainly because of higher opearing expenses in 2Q FY2009.

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