The listing of the shares of StarHub Ltd on the SGX-ST was sponsored by Credit Suisse First Boston (Singapore) Limited and UBS AG, acting through its business group, UBS Investment Bank.
Singapore, 3 August 2005 - StarHub Ltd ("StarHub" or "The Group") today announced a net profit of S$52.7 million for the quarter ended 30 June 2005. This compares favourably against a net loss of S$10.4 million for 2Q2004. The Group's operating revenue totalled S$382.6 million, up 15.8% from S$330.4 million a year ago. For the half-year ended 30 June 2005, its net profit was S$83.1 million compared to a net loss of S$46.6 million over the same period in 2004. This was achieved on the back of 1H2005 operating revenue of S$757.4 million, versus S$654.5 million for 1H2004.
StarHub's EBITDA for the second quarter grew by a robust 46% to S$115.3 million, compared to S$78.9 million in the prior year period. EBITDA as a percentage of service revenue margin achieved a new quarterly high of 31.8%, 6.8 percentage points higher as compared to last year's 25.0%. On a half-yearly basis, EBITDA surged 50.6% to S$214.6 million from S$142.5 million previously, while EBITDA margin as a percentage of service revenue expanded from 23.0% to 30.1%.
StarHub's free cash flow for the quarter remained steady at S$45.7 million compared to S$45.8 million in 2Q2004. Capital expenditures increased from S$46.1 million to S$98.7 million for the latest quarter. This is mainly attributable to payments made for the 3G mobile network and other network capacity expansions. For the half year ended 30 June 2005, free cash flow rose significantly by 162.8% to S$95.0 million, up from S$36.2 million previously.
In line with the Group's change in depreciation rates for certain network assets with effect from 1 January 2005, there was a reduction in depreciation charges by $18.9 million in 2Q2005 and $48.0 million in the half year ended 30 June 2005.
During the quarter, on a year-on-year basis, three of the Group's four lines of business recorded double-digit revenue growth. Broadband grew the fastest at 43.3% due to increases in customer base and ARPU. Mobile services grew 17.9%, driven by a larger customer base and strong ARPU, while Cable TV achieved a 14.3% year-on-year growth rate made possible by an increase in customer base, and strong ARPU generated in part by a significant uptake in Digital Cable services.
For the quarter ended 30 June 2005, earnings per fully diluted share were 2.46 cents, up from a negative 0.49 cents in the prior year.
Financial Highlights
S$ million | Quarter ended 30 June | Half Year ended 30 June | ||||
2005 | 2004 | % Change | 2005 | 2004 | % Change | |
Revenue | 382.6 | 330.4 | 15.8 | 757.4 | 654.5 | 15.7 |
Service Revenue | 362.0 | 315.8 | 14.7 | 713.7 | 620.6 | 15.0 |
EBITDA | 115.3 | 78.9 | 46.0 | 214.6 | 142.5 | 50.6 |
Profit / (loss) from operations | 66.4 | (4.3) | nm | 108.8 | (21.5) | nm |
Profit / (loss) before tax | 64.5 | (7.8) | nm | 104.6 | (28.5) | nm |
Taxation | (11.9) | (2.6) | (358.6) | (21.5) | (18.1) | (19.2) |
Profit attributable to shareholders | 52.7 | (10.4) | nm | 83.1 | (46.6) | nm |
Free Cash Flow | 45.7 | 45.8 | (0.2) | 95.0 | 36.2 | 162.8 |
Note: nm = Not meaningful
1H2005 Financial Highlights
1H2005 Business Highlights
"StarHub's second quarter performance continued to show that its revenue growth is delivering greater operating efficiencies and expanding margins. Each of our Mobile, Broadband, and CableTV businesses delivered double digit growth. In view of our first half performance, we are upgrading our guidance on full year revenue growth from high single digit percentage to the low-teens," said Mr Terry Clontz, President and CEO of StarHub.
"We are also delighted to report that the number of households who subscribe to two or more services from StarHub increased by 20% to 309,000 households over last year, indicating that more people are discovering the quality service we deliver and taking advantage of the value and convenience that hubbing with StarHub offers them."
"In view of StarHub's current cash position, free cash flow, profitability trend, and distributable reserves, we reaffirm our plans to pay a recurring minimum annual cash dividend of eight cents per share. In keeping with those plans, we are declaring an interim dividend of four cents per ordinary share, payable on 9 September 2005. In addition, shareholders will be pleased to know that StarHub is immediately adopting a quarterly dividend payment schedule, with the next regular dividend to be announced with the third quarter results ending 30 September 2005," added Mr Clontz.
Outlook for Year 2005
While competition remains keen in the mobile market, StarHub will continue to focus on customer retention and encourage subscribers to experience and enjoy the non-voice, lifestyle mobile contents that are available across its multiple platforms. The Group will also continue to drive broadband penetration in Singapore. On the Cable TV front, StarHub will strive to introduce more value-added services to stimulate more take-up of Digital Cable services. Other initiatives, such as IP telephony services, are expected to be rolled out in the next nine months.
Based on the current outlook, and barring any unforeseen circumstances and changes in economic and market conditions, the Group expects the growth in operating revenue for fiscal year 2005 to be in the low teens. EBITDA, as a percentage of service revenue, is expected to approach 30%, while Capex, as a percentage of operating revenue, is targeted to be in the mid-teens.
For more details on the Group's performance for 1H2005 and outlook for FY2005, please visit www.starhub.com/ir. Materials available at this website include the presentation and unaudited results for the second quarter ended 30 June 2005.