· 1H2024 performance in line or above FY2024 guidance across all metrics – Service Revenue1, Service EBITDA Margin1 and Capex Commitment
· Interim dividend of 3.0 cents per ordinary share declared for 1H2024
Singapore, 14 August 2024 – StarHub reported today net profit attributable to shareholders1 (“NPAT”) of $83.3 million for the six-month period ended 30 June 2024 (“1H2024”). This was a 8.7% year-on-year (“YoY”) increase from $76.7 million in the equivalent period a year ago (“1H2023”) in tandem with higher Service Revenue that was mainly lifted by stronger Enterprise Business contributions in 1H2024.
Commenting on the results, StarHub’s Chief Executive, Nikhil Eapen, said, “We generated continued profitability growth for the first half of FY2024, amidst hyper-competitive market conditions. We are entering the home stretch of the build and investment phase of DARE+. By the end of 2024, we will have transformed almost all of our core infrastructure, business, products and customer engagement toward cloud and digital. We also continue to launch new platforms – Infinity Play & cross-product bundling as key differentiators for Consumer; and modern Digital Infrastructure solutions that combine Cloud, Connectivity and Cybersecurity, All-as-a-Service, for our Government and Enterprise customers. We remain focused on driving long-term total shareholder returns for all our stakeholders.”
Service Revenue1 grew 2.4% to $939.2 million in 1H2024 compared to $917.6 million a year ago, lifted by strong growth in Enterprise Business. Total Revenue1 grew 1.0% to approximately $1.1 billion in 1H2024 from approximately $1.09 billion in 1H2023. The Enterprise Business1 segment recorded a 10.8% increase in revenue for 1H2024, due to higher revenues from Managed Services (+33.9% YoY) and Cybersecurity Services (+29.0% YoY). Both segments recorded higher project completions; while Managed Services was lifted by higher revenues from Digital Infrastructure solutions and data centre-related services.
As part of Digital Infrastructure solutions offered under the Managed Services segment, StarHub and the National University Singapore (NUS) signed a Memorandum of Understanding (MoU) in July 2024 to collaborate on building Singapore’s first ‘Borderless University.’ Leveraging Enterprise 5G and Cloud Infinity, users will be able to experience secure, ultra-fast, low-latency connections that support applications such as virtual and augmented reality, and real-time data analytics. The backbone of this seamless experience is a private dedicated data network set up by StarHub for NUS, allowing users to connect directly to NUS’ private 5G network wherever they may be through utilising eSIM technology without requiring repeated logins.
Consumer ARPU largely remained resilient YoY across most segments in 1H2024 despite sustained intense market competition, due to StarHub’s focus on differentiation through Infinity Play and cross-product bundling. 1H2024 Entertainment ARPU improved to $46 from $44 due to the cessation of tactical promotions as well as the successful cross- and up-selling of higher ARPU bundled plans; Broadband ARPU remained stable at $34; and Postpaid ARPU dipped to $30 from $32 due to the growth of SIM Only subscribers, partially mitigated by roaming growth.
Overall, StarHub reported $289.7 million in Mobile revenue, $122.9 million in Broadband revenue and $109.4 million in Entertainment revenue for 1H2024. The Group remains focused on enhancing earnings resilience through innovation, such as the launch of Singapore’s first 5Gbps broadband plan; as well as doubling down on Infinity Play and cross-product bundling as key market differentiators and competitive levers that has seen higher customer stickiness and enhanced customer lifetime value[1].
Comparing against the full-year guidance for FY2024, the 1H2024 Service Revenue1 growth of 2.4% was in line with the guided “at least 1% to 3%” YoY growth range. The Group’s Service EBITDA margin1 at 22.8% was in line with the “approximately 22%” guidance. Capex Commitment including investments2 for 1H2024 was 7.7%, lower than the guided range of between 11% and 13% of Total Revenue for the full year.
The Group has declared an interim dividend of 3.0 cents per ordinary share for 1H2024 after considering short- to mid-term business conditions, cash flow and investment requirements, as well as results expected from the ongoing business transformation requirements. StarHub has reiterated its dividend guidance of at least 6.0 cents per ordinary share for FY2024 and remains committed to its dividend policy[2].
“With the new growth platforms we have built and armed with our strong balance sheet for financial flexibility, we are well-positioned to proactively refine our tactical and strategic thrusts to compete effectively and aggressively in the markets we operate in, enabling us to drive organic growth in new markets and segments. We are determined to create long-term value for all stakeholders as Singapore’s leading digital platform player,” added Nikhil.
StarHub’s balance sheet remains healthy with $101.6 million in Free Cash Flow. Leverage remains low with Net Debt to EBITDA further reduced to 1.23 times as at 30 June 2024, compared to 1.36 times as at 31 December 2023.
[1] The measure of the average customer’s revenue generated over their entire relationship with the company.
[2] To distribute at least 80% of net profit attributable to shareholders (adjusted for one off, non-recurring items), payable on a semi-annual basis.
[3] To distribute at least 80% of net profit attributable to shareholders (adjusted for one off, non-recurring items), payable on a semi-annual basis.
