14 February 2007
  • Full-Year Operating Revenue Increased 15% To S$1.8 Billion
  • Net Profit Grew 63% to S$360.2 Million
  • EBITDA Up 25% To S$575.3 Million
  • EPS Expanded 69% To 17.4 Cents Per Share
  • Recommends Final Dividend Of 3.5 Cents Per Share

Singapore, 14 February 2007 - StarHub closed the year 2006 with its full-year operating revenue up 15% to S$1.8 billion. Net profit jumped 63% to S$360.2 million. For 4Q-2006, revenue also saw double-digit growth of 14% to S$473.2 million. Net profit of S$141.7 million for the quarter was recorded, a 93% increase from S$73.3 million recorded in 4Q-2005.

The Group’s EBITDA for the quarter grew 24% to S$146.0 million, compared to S$117.4 million in 4Q-2005. EBITDA margin as a percentage of service revenue was 32.6%, 260 basis points higher as compared to last year’s 30.0%. On a full-year basis, EBITDA increased 25% to S$575.3 million from S$460.1 million previously, while EBITDA margin as a percentage of service revenue expanded to 33.6% from 31.0%.

For the full-year, fully diluted EPS was 69% higher at 17.4 cents per share over the same period in 2005. StarHub’s free cash flow rose 30% to S$333.9 million compared to S$256.9 million in FY-2005. Capital expenditure was slightly lower at S$247.6 million, from S$247.7 million in the same period last year.

Comparing the year-on-year growth of each business unit, all four lines of business recorded double-digit revenue growth. The Broadband business was the top growth performer at 24%, driven by a larger customer base and increased ARPU. Cable TV revenue grew 19% partly due to the higher subscription revenue collected during the 2006 World Cup season. Fixed Networks increased 17% while Mobile maintained its growth momentum at 12%.

Financial Highlights
S$ millionQuarter ended 31 December Full-year ended 31 December
20062005% Change20062005% Change
Service Revenue448.4391.114.71,711.71,483.015.4
Profit from operations89.167.631.8361.4256.341.0
Profit before tax83.965.727.8352.6248.342.0
Profit attributable to shareholders141.773.393.3360.2221.462.7
Free Cash Flow54.581.4(33.1)333.9256.930.0
nm = not meaningful
@ = more than –/+ 300%

FY-2006 Financial & Business Highlights
Mobile, Cable TV, Broadband, Fixed Network Services and Sales of Equipment contributed 51%, 17%, 12%, 15% and 5% to the revenue mix, respectively.

  • Mobile revenue grew 12% to S$919.1 million from S$821.6 million, following a 10% increase in the customer base to 1.54 million. Post-paid mobile services revenue rose 6% year-on-year to S$704.3 million, accounting for 77% of the Mobile revenue mix. Pre-paid mobile services revenue grew 35% to S$214.8 million. Post-paid ARPU remained steady at S$71, while pre-paid ARPU grew 13% to S$27. StarHub’s total mobile market share was 33.1% as at end December 2006. Post-paid market share was 27.7%, while pre-paid market share was 41.8%. At end December 2006, Singapore’s mobile market penetration was at 103.4%.
  • Cable TV revenue increased 19% to S$313.2 million from S$262.4 million. The 6% growth in ARPU to S$48 from S$45 came from a higher percentage of customers on the digital tier as well as the additional revenue boost from the World Cup event. Customer base grew 9% to about 487,000 as at end December 2006, amounting to a household penetration of 43.4% compared to 40.1% the previous year. The number of customers taking the digital tier grew 63%, from a year ago, to 322,000 households. Digital customers now constitute 66% of the total cable TV customer base.
  • Broadband revenue expanded 24% to S$219.9 million compared to S$177.2 million previously. Customers on subscription jumped 17%, closing the quarter with 325,000 customers. As more customers upgraded to the higher-tier price plans, ARPU lifted by S$2 to S$59. Residential broadband market share stood at 50.6% at year-end.
  • Fixed Network revenue increased 17% to S$259.5 million from S$221.7 million. This was on the back of a higher volume of domestic and international lease circuits and higher international voice traffic.
  • Hubbing - The percentage of total hubbing households who subscribed to any two or more StarHub services rose from 47.4% a year ago to 50.7%. During this period, the total number of hubbing households subscribing to at least one service also grew 5% to 743,000 households.

"We are pleased to report another year of strong results, underpinned by good business fundamentals. Our hubbing strategy continues to deliver value for consumers and shareholders alike. As always, the fourth quarter is seasonally impacted by festive promotions. However, as we expected, this fourth quarter showed a continuation of a more competitive market that began in the second quarter, particularly as we chose to respond more aggressively in certain business segments,” said Mr Terry Clontz, President and CEO of StarHub.

“We are proposing a final dividend of 3.5 cents per share which brings our total annual dividend to 11.5 cents per share for FY 2006. In addition, we intend to increase the leverage in our capital structure to about 1.8 times net debt to 2006 EBITDA through a capital management exercise this year,” added Mr Clontz.

Outlook for FY2007
Based on the current outlook, barring any unforeseen circumstances and changes in economic and market conditions, our 2007 full year operating revenue is expected to grow by high single digit. We expect EBITDA margin to be about 34% of service revenue, and the full year’s cash capital expenditure as a ratio of operating revenue for 2007 to not exceed 14%. The Company intends to pay a minimum annual cash dividend of 14 cents per share for FY2007.

For more details on the Group's performance for FY2006 and outlook for FY2007, please visit www.starhub.com/ir. Materials available at this website include the webcast, investor presentation and audited results for the full-year ended 31 December 2006.

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