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StarHub Ltd’s Revenue Grew But Net Profit Continued To Fall In The Second Quarter of 2018

Last week, StarHub Ltd (SGX: CC3) released its 2018 second-quarter (Q2 FY18) earnings update. As a quick introduction, StarHub is one of the three main companies in Singapore’s telecommunication industry.

Here, let’s look at 10 important things from StarHub’s earnings update:

1. Revenue for the quarter was up 5.4% year-on-year to S$597.3 million. Service revenue was up 0.7% year-on-year to S$466.8 million.

2. EBIT (earnings before interest and tax) was down 20.1% year-on-year to S$84.2 million.

3. Quarterly EBITDA (earnings before interest tax depreciation and amortisation) declined 10.4% year-on-year to S$155.3 million.

4. Service’s EBITDA margin percentage was down from 35.0% last year to 30.2% this quarter.

5. Profit attributable to shareholders was down 22.8% year-on-year to S$61.7 million.

6. Free cash flow jumped from S$16.3 million a year ago to S$97.1 million this quarter.

7. As of 30 June 2018, net debt stood at S$733.9 million and net-debt-to-EBITDA ratio stood at 1.19. In comparison, as of 31 December 2017, net debt and net-debt-to-EBITDA ratio were S$632.3 million and 0.98, respectively.

8. For the quarter, revenue for Broadband and Enterprise Fixed segments were up by 0.1% and 22.4%, respectively, as compared to the same period last year. On the other hand, revenue for Mobile and Pay TV were down by 6.6% and 4.8%, respectively, as compared to a year ago.

9. StarHub proposed dividend per share of four cents in the quarter.

10. The telco made the following comments with regards to its outlook:

“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.”

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore contributor Lawrence Nga doesn’t own shares in any companies mentioned.