StarHub Ltd’s Latest Earnings Update: Revenue Up But Profit Fell

Last Friday, StarHub Ltd (SGX: CC3) released its 2018 third-quarter earnings update.

As a quick introduction, StarHub is one of the three companies in the telecommunication industry, sitting behind industry leader Singapore Telecommunications Limited (SGX: Z74) but ahead of M1 Ltd (SGX: B2F).

Today, we will look at 10 important things from its latest earnings update.

  1. Revenue for the quarter was up 3.0% year-on-year to S$582.2 million. Service revenue declined 1.5% year-on-year to S$459.6 million.
  2. EBIT (earnings before interest and tax) was down 14.5% year-on-year to S$75.6 million.
  3. Quarterly EBITDA (earnings before interest tax depreciation and amortisation) declined 9.8% year-on-year to S$147.0 million.
  4. Service’s EBITDA margin for the quarter was down from 32.2% a year ago to 28.8% in the reporting quarter.
  5. Profit attributable to investors was down 12.8% year-on-year to S$57.0 million.
  6. Free cash flow fell by S$40.8 million from a year ago to S$ 79.3 million in the latest quarter.
  7. As at 30 September 2018, net debt stood at S$728.9 million and the company’s debt to equity ratio was 1.29. At the end of last year, StarHub’s net debt and gearing were S$632.3 million and 1.05, respectively.
  8. For the quarter, revenue for Broadband and Enterprise Fixed segments were up by 0.8% and 13.0%, respectively, as compared to the same period last year. On the other hand, revenue for Mobile and Pay TV were down by 4.2% and 14.1%, respectively, as compared to last year.
  9. Starhub proposed dividend per share of S$0.04 for the quarter.
  10. On the telco’s outlook for 2018, it said:

“Based on the current outlook, StarHub maintains guidance on 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. StarHub intends 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.