Growth in Enterprise Segment Delivers Steady Revenues
Singapore, 7 August 2018 – StarHub Ltd today announced its unaudited consolidated results for the quarter and six months ended 30 June 2018.
During both periods, the Company delivered strong double-digit growth in Enterprise Fixed services revenue, aided by growth in managed services and consolidation of Accel Systems & Technologies Pte. Ltd. (ASTL) from July 2017 and D’Crypt Pte Ltd (D’Crypt) from January 2018, which offset lower revenues from the Mobile and Pay TV businesses.
Key Financial Highlights
2Q2018 compared to 2Q2017:
1H2018 compared to 1H2017:
The Board of Directors has recommended the payment of four cents per ordinary share for 2Q2018.
Key Business Highlights
“Revenue growth from the Enterprise segment was driven by customer acquisitions, growth in data usage and fixed services, and higher demand for managed services and cyber security solutions,” said Mr Peter Kaliaropoulos (Peter K), CEO, StarHub. “The increasingly competitive environment for consumer services and combination of OTT services, continue to impact revenue from services such as Mobile and Pay TV.”
“Winning our fair share of the market for connectivity services, improving and delivering consistent customer experience across all customer segments, leveraging our data analytics capabilities, and delivering innovative solutions predominantly in managed services such as cyber security and robotics are important to our growth,” added Mr Peter K.
“StarHub has clocked Singapore’s fastest 3G and 4G speeds, according to OpenSignal. Notwithstanding this success, we know exploring innovation in 5G services is also crucial. Following our 5G trials over the past two years, work on our pilot 5G network is underway to explore new enterprise solutions. Simultaneously, we also need to deliver smart cost optimisation and digitalisation across the Company to improve our ability to serve customers better and faster and increase our margins and cash flow.”
Based on the current outlook, we maintained our guidance on our Group’s 2018 service revenue to be 1% to 3% lower YoY. Group’s service EBITDA margin is maintained at between 27% to 29% after the adoption of SFRS(I) 15. In 2018, CAPEX payment, excluding spectrum payment of S$282.0 million and building payment of S$31.6 million, remains at 11% of total revenue. We intend to pay a quarterly cash dividend of 4 cents per ordinary share for FY2018.
The Group has adopted the Singapore Financial Reporting Standards (International) (“SFRS(I)”) 15 (Revenue from Contracts with Customers), effective from 1 January 2018. Under the new standard, service revenue will see a decline mainly due to the allocation of service revenue to sales of equipment revenue. As a result, service revenue will be lower while sales of equipment revenue will be higher compared to the previous accounting treatment. Group service EBITDA margin for 2018 will increase due to reduction in service revenue. Comparatives have been restated to take into account the retrospective adjustments relating to SFRS(I) 15.
For more details on the Group's performance for 2Q & 1H2018 and outlook for FY2018, please visit www.starhub.com/ir. Materials available at this website include the audio conference link, investor presentation and unaudited results for the second quarter and half-year ended 30 June 2018.