StarHub Reports 2009 Third Quarter & Year-To-Date Results

• YTD Operating Revenue Increased 1% To S$1,600 Million
• YTD EBITDA Rose 5% To S$501 Million
• YTD EPS Lifted 9% To 14.26 Cents Per Share
• Increase Quarterly Dividend To 5.0 Cents Per Share

Singapore, 10 November 2009 – The third quarter’s operating revenue increased 2% to S$537 million from S$525 million year-on-year (YoY). For the year-to-date (YTD), it recorded a 1% growth to S$1,600 million. The Group’s EBITDA for the quarter rose 5% to S$172 million. Similarly, the Group’s YTD EBITDA also saw a 5% lift. EBITDA margin as a percentage of service revenue was 33.4%. For the YTD, EBITDA registered S$501 million and EBITDA margin was at 32.6%.

For the quarter, profit from operations stood at S$111 million which was 4% higher YoY. Net profit after tax increased 7% to S$85 million.Free cash flow (FCF) at S$115 million was 8% lower compared to last year’s S$126 million. YTD, profit from operations was at S$319 million or 5% higher compared to the same period last year. FCF was at S$379 million, 28% higher than last year’s S$296 million.

Capital expenditure was S$6 million lower at S$54 million compared to S$60 million a year ago. YTD, it was 6% higher at S$175 million.

Financial Highlights

3Q & YTD 2009 Financial & Business Highlights

YoY, Fixed Network services’ revenue increased 6%. Mobile revenue rose 5% and pay TV revenue registered a 2% growth. Broadband revenue fell 6%. YTD, Fixed Network services increased 7%, while Pay TV revenue grew 2%. Mobile revenue recorded 1% growth and Broadband revenue slipped 4%.

YTD, Mobile continues to be the major revenue contributor at 51%. Pay TV, Broadband, Fixed Network Services and Sales of Equipment contributed 19%, 11%, 15% and 4% respectively to the mix.

• Mobile revenue increased 5% for the quarter. YTD revenue rose 1% to S$813 million from S$807 million. Post-paid mobile services revenue saw 3% uplift YoY. On an YTD basis, it slipped 1% to S$619 million, accounting for 76% of the Mobile revenue mix. The decrease was due to the lower ARPU mix despite an increase in subscriber base. Pre-paid mobile services revenue increased 11%. YTD, it rose 8% to S$194 million. Post-paid ARPU decreased S$5 to S$69, while pre-paid ARPU increased S$1 to S$23. YTD, post-paid ARPU was down S$7 to S$69, while pre-paid ARPU was up S$3 to S$24. The lower post-paid ARPU was mainly due to lower usage of voice, IDD and roaming.
• Pay TV revenue rose 2% for the quarter. YTD, revenue also saw a 2% growth to S$303 million from S$298 million. Driven by a higher customer base and steady ARPU, pay TV ARPU remained stable at S$56 YoY. It also kept constant at S$57 YTD. The customer base was up 3% to 535,000. Digital customers now make up 100% of the total pay TV customer base.
• Broadband revenue decreased 6% YoY. YTD, revenue slipped 4% to S$181 million. The MaxOnline customer base grew 7%, ending the quarter with 392,000. ARPU decreased S$7 to S$50 as customers continued to seek out lower price plan offers and attractive marketing premium bundles.
• Fixed Network revenue increased 6% to S$80 million from S$75 million previously. YTD, revenue rose 7% to S$239 million. Data & Internet services revenue, which makes up 85% of the Fixed Network revenue, grew 9% to S$67 million from S$62 million a year ago. YTD, revenue recorded 12% growth to S$203 million.
• The percentage of total Hubbing households that subscribed to any two or more StarHub services stands at 54%, with a 12% increase in households subscribing to all three services YoY.

"It has been a good quarter performance despite the challenging environment. Although recent news about BPL has created some concerns about StarHub's plans, we intend to continue delivering the widest selection of branded quality content to consumers well into the future. For our customers, we reaffirm our commitment to continue bringing more value and convenience through new innovative services that we are known for, particularly through Hubbing initiatives,” said Mr Terry Clontz, CEO of StarHub.  “For our shareholders, we have announced an increase in the quarterly dividend to 5.0 cents per share."

Outlook for FY2009

Based on the current outlook, barring any unforeseen circumstances and changes in the economic and market conditions, we expect the Group’s 2009 service revenue to be maintained at around the 2008 level and our 2009 blended EBITDA margin on service revenue to be around 32%. The 2009 cash capital expenditure is not expected to exceed 11% of operating revenue. In view of the expected profitability and cash flow for the remaining 2009 and into 2010, our dividend guidance is increased to pay a minimum annual cash dividend for FY2009 of 19.0 cents per ordinary share. For 3Q-2009, we will pay 5.0 cents per ordinary share as an interim dividend and looking ahead, we expect to maintain the dividend at a minimum of 5.0 cents per ordinary share per quarter.

For more details on the Group's performance for 3Q2009 and outlook for FY2009, 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 September 2009.

“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."