Singapore, 2 August 2007 – StarHub today announced a net profit of S$80.8 million for the quarter ended 30 June 2007, yielding 4.43 cents per share, which is an increase of 27% over a year ago. Group operating revenue was up 10% to S$489.1 million, from S$444.2 million in 2Q-2006.
The Group’s EBITDA increased 13% to S$163.7 million, compared to S$145.2 million Y-o-Y. EBITDA margin as a percentage of service revenue was at 35.3%, 90 basis points higher than last year’s 34.4%. Free cash flow per fully diluted share climbed 91% to 8.90 cents versus 4.67 cents a year ago. Capital expenditures registered S$41.9 million for 2Q-2007.
Comparing the Y-o-Y growth of each business unit, the Broadband business was the top performer this quarter increasing 16%, contributed by a higher ARPU and larger customer base. Mobileregistered 12% growth, while the Fixed Network business expanded by 11%. Cable TV revenue remained stable.
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2Q-2007 Y-o-Y Financial & Business Highlights
Mobile revenue grew 12% to S$252.9 million from S$226.6 million. Post-paid mobile services revenue climbed 9% to S$189.3 million while pre-paid mobile services revenue increased 20% to S$63.6 million. Post-paid ARPU jumped 7% to S$74, while pre-paid ARPU was down S$1 to S$26. Mobile customer base expanded 19% to 1.63 million. It was made up of 786,000 post-paid customers, of which 260,000 are using 3G handsets and are on 3G plans, and 848,000 pre-paid customers. As at end May 2007, Singapore’s mobile market penetration was at 109.5%.
Without the benefit of World Cup revenue this year, Cable TV revenue and ARPU, at S$81.7 million and S$49 respectively, still equaled 2Q-2006. This was achieved with the Cable TV customer base growing 4% to 496,000, registering a household penetration of 44.1% compared to 42.8% a year ago. The number of customers taking the Digital Cable services went up by 31% to 358,000 households, representing 72% of the total Cable TV customer base. Average monthly churn rate was at 1.2%.
Broadband revenue maintained its strong growth at 16% to S$62.1 million compared to S$53.7 million. ARPU increased S$1 to S$60. Broadband subscription-based customers jumped 12%, closing the quarter with about 334,000 customers.
Fixed Network revenue increased 11% to S$66.5 million from S$59.9 million. The growth came mainly from the higher margin Data & Internet services, which was driven by demand for our domestic and international lease circuits’ services.
The percentage of total Hubbing households who subscribed to any two or more StarHub services was at 50.9%. During this period, the total number of hubbing households subscribing to at least one service inched 2% to 747,000 households. Hubbing households ARPU recorded 6% growth to S$127.50 from S$120.80.
“We have delivered 10% revenue growth and increased EPS by 27% to 4.43 cents this quarter, despite a more competitive environment. On the back of these strong results, and given our view of future cash flows, we are increasing our quarterly dividend payment to 4 cents per share,” said Mr Terry Clontz, President and CEO of StarHub.
“In addition to our commitment to grow shareholder value, we are also committed to delivering more value to our customers. The recent unveiling of our HubStation, HSPA services and BPL ‘live’ broadcasts over Cable TV, Mobile, and Broadband are taking hubbing to the next level. We will continue enhancing our customers' lifestyles by offering them the most innovative services with more choices, value and convenience,” added Mr Clontz.
Outlook for FY2007
Based on the current outlook, barring any unforeseen circumstances and changes in the economic and market conditions, we maintain our guidance statement issued in the last results announcement. The Group’s 2007 operating revenue is expected to grow in the high single-digits and blended EBITDA margin on service revenue is expected to be around 34%. The full year cash capital expenditure, as a ratio of operating revenue, is expected not to exceed 14%.
Further, in view of the projected profitability and cash flows generation in 2007 and our commitment to return surplus cash to our shareholders, we are revising our guidance to pay a minimum annual cash dividend for the financial year 2007 to 15.5 cents per ordinary share.
For more details on the Group's performance for 2Q-2007 and outlook for FY2007, please visit www.starhub.com/ir. Materials available at this website include the investor presentation and unaudited results for the second quarter ended 30 June 2007.
“Some of the statements in this news release constitute "forward-looking statements" that do not directly or exclusively relate to historical facts. These forward-looking statements reflect StarHub Ltd’s current intentions, plans, expectations, assumptions and beliefs about future events and are subject to risks, uncertainties and other factors, many of which are outside StarHub Ltd’s control. Important factors that could cause actual results to differ materially from the expectations expressed or implied in the forward-looking statements include known and unknown risks. Because actual results could differ materially from StarHub Ltd’s current intentions, plans, expectations, assumptions and beliefs about the future, you are urged to view all forward-looking statements contained in this news release with caution."