Singapore, 6 August 2008 – The second quarter of 2008 operating revenue increased 9% to S$531 million from S$489 million year-on-year (YoY). For the half year, it recorded S$1,066 million or 11% growth. The Group’s EBITDA for the quarter dipped 10% to S$147 million, primarily due to substantially higher acquisition and retention costs as a result of a record number of people choosing StarHub services. EBITDA margin as a percentage of service revenue was 28.9%. For the half year, EBITDA registered S$314 million and EBITDA margin came in at 31.0%.
For the quarter, profit from operations was 17% lower YoY at S$89 million. Net profit after tax decreased 21% to S$64 million. Free cash flow (FCF) at S$140 million was 14% lower compared to last year’s S$162 million. Looking at the half year, profit from operations was at S$197 million or 6% lower YoY. FCF was at S$170 million or 44% lower than last year’s S$303 million.
Capital expenditure (capex) was S$4 million higher at S$46 million compared to S$42 million a year ago. For the half year, it was 59% higher at S$105 million. Capex was used on the new customer management information system, network infrastructure capacity expansion and upgrades for the international and cable networks.
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2Q2008 Financial & Business Highlights
For the second consecutive quarter this year, Pay TV revenue registered the highest growth, registering a 25% YoY lift. Mobile revenue grew 7%, while Fixed Network services increased 12%. Broadband revenue remained constant for the quarter. Mobile continues to be the major revenue contributor at 51%. Pay TV, Broadband, Fixed Network Services and Sales of Equipment contributed 19%, 12%, 14% and 4% respectively to the mix.
"We added a record number of post-paid Mobile customers in the second quarter and first half of 2008. The short-term financial consequence of this success is a dilution to earnings. However, this positive trend in customer preference for StarHub services should deliver good momentum in future periods,” said Mr Terry Clontz, CEO of StarHub. “We believe the competitive intensity we have seen in certain segments of the market should return to more sensible levels in the second half of the year,” he added.
Outlook for FY2008
Based on the current outlook, barring any unforeseen circumstances and changes in the economic and market conditions, we expect the Group’s 2008 operating revenue growth will be around 7% YoY. Blended EBITDA margin on service revenue is expected to be around 31%, and the 2008 cash capital expenditure is not expected to exceed 12% of operating revenue. We also maintain our commitment to pay a minimum annual cash dividend for FY2008 of 18.0 cents per ordinary share.
For more details on the Group's performance for 2Q2008 and outlook for FY2008, please visit www.starhub.com/ir. Materials available at this website include the audio conference link, investor presentation and unaudited results for the quarter ended 30 June 2008.