Business

StarHub's Q1 profits fall 21%

Telco hits snag due to intense competition, while earnings dragged down by the lack of grants

StarHub hit a snag in the first quarter when business revenue flatlined due to intense competition, while earnings were dragged down by the lack of government grants.

Net profit for the three months to March 31 was down 21.3 per cent to $73.1 million, compared with the same period a year earlier, it said yesterday.

Total revenue inched up 0.2 per cent to $592.3 million, while other income dipped $12.3 million from a year earlier.

StarHub was provided with the Next Generation National Broadband Network grant by the now-defunct Infocomm Development Authority of Singapore last year.

An interim dividend of four cents a share will be paid on May 26 - lower than the five-cent payout last year.

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"We intend to maintain a quarterly cash dividend of four cents per ordinary share for financial year 2017," StarHub said after the market closed yesterday.

Competition for a share of the domestic mobile services market has been fierce among the three telcos here, even before a fourth telco - TPG Telecom - starts its services next year.

Against this backdrop, StarHub's core business performance was mixed in the first quarter, when mobile revenue - half of its total sales - dropped 0.6 per cent to $296.2 million.

The mobile customer base of 2.29 million users was down from 2.31 million in the fourth quarter last year.

StarHub’s core business performance was mixed in the first quarter, when mobile revenue — half of its total sales — dropped 0.6 per cent to $296.2 million.

Enterprise fixed service revenue was up 2.9 per cent to $98.7 million, while broadband turnover of $53.7 million grew 0.5 per cent year-on-year.

StarHub will prioritise growing its enterprise business with new offers in cyber security and smart retail segments, it said.

The mobile spectrum acquired in the recent government auction will also pave its way towards the 5G era.

But overall service revenue this year is expected to be "at about 2016's level", StarHub said.

Earnings per share were 4.2 cents, down from 5.4 cents a year earlier, while net asset value was 15 cents a share as of March 31, up from 11.3 cents at the end of last year.

StarHub shares closed up one cent or 0.36 per cent at $2.78 before the results announcement.

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