StarHub – BT

StarHub Q2 net jumps 34.3% to $78m

STARHUB’S second-quarter net profit jumped 34.3 per cent to $78 million, from $58.1 million last year, as operating expenses fell in the absence of premium pay-television content such as the World Cup and Barclays Premier League (BPL).

Earnings per share for the three months ended June 30 rose to 4.54 cents, from 3.39 cents in 2010. Q2 revenue stayed flat at $568.6 million.

Last year, StarHub was heavily weighed down by the cost of bringing the Fifa World Cup to local soccer fans. Speculation was rife then that local operators had paid nearly $20 million to finally put an end to the protracted negotiations over the content deal.

With the weight now lifted, the firm’s operating expenses eased 3.1 per cent to $477.2 million in Q2.

StarHub saw a slight topline improvement in three of its four key business segments in the April-June period.

Mobile sales, which accounts for nearly 60 per cent of its service revenue, rose 2.9 per cent year-on- year to $302.5 million.

This was largely due to a 4.4 per cent increase in post-paid subscriber revenue to $239.2 million in the second quarter. Sales from the pre-paid segment dipped 2.6 per cent to $63.3 million in the period.

This company attributed the pre-paid decline to the expiry of certain promotional cards and a database clean-up to comply with regulatory requirements.

StarHub’s total mobile subscriber base grew by 8,000 to 2.15 million at the end of Q2. Revenue from the broadband and fixed network services segments rose 3 per cent and 2.2 per cent to $61 million and $83.4 million respectively during the period.

The exception to the rule was StarHub’s pay-TV unit, which saw its sales slide 15.7 per cent to $92.3 million after it slashed its sports package pricing to reflect the loss of the BPL broadcast rights to rival Singapore Telecommunications. The absence of one-off takings from the World Cup also contributed to the decline, the firm said.

Despite the BPL loss, the firm still managed to grow its pay-TV base by 3,000 year-on-year to 544,000.

‘Although there’s competition, customers are still keeping our (set-top) box. They’re maintaining two (pay-TV set-top) boxes,’ StarHub’s chief operating officer Tan Tong Hai said in a conference call yesterday.

In June, the firm announced plans to raise its monthly pay-TV pricing by $2 from this month. However, the move is not expected to lead to a significant customer loss, StarHub CEO Neil Montefiore added.

For the first six months of this year, StarHub’s net profit soared 46 per cent to $147.1 million, while revenue stayed flat at $1.13 billion.

Looking ahead, the operator now expects its full-year operating revenue to grow in the low single- digit range, a downward revision from the single-digit forecast it had earlier issued as a result of a flat top line in H1.

In addition, the boon it was initially expecting from the ongoing Next-Gen NBN (National Broadband Network) rollout, particularly from the corporate market, may not come through this year, Mr Montefiore said.

StarHub shares closed closed 8 cents lower yesterday at $2.83 before its Q2 earnings were released.

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