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5 Unhappy Facts Investors Should Know About StarHub Ltd Now

StarHub Ltd (SGX: CC3) is one of the three major telcos in Singapore, behind Singapore Telecommunications Limited in market cap and ahead of M1 Ltd.

StarHub has five business segments, namely mobile, pay TV, broadband, enterprise fixed, and equipment sales. The telco recently released its 2018 full-year result, and there are five things investors should know (but that they may not like).

The five points to know

First of all, Starhub’s revenue and profit attributable to shareholders declined by 2.0% and 26.2% in the financial year. Similarly, service revenue was down 2.5% year on year. The decline in revenue was mainly driven by weaker performance in its mobile and pay TV segments.

Secondly, the average revenue per user (ARPU) and subscribers’ number declined year on year for both the mobile and pay-TV services segments.

Thirdly, Starhub’s EBITDA margin percentage for the year was down from 31.2% last year to 28.4% this quarter, mainly due to lower revenue and higher operating cost.

Next, Starhub’s free cash flow was 21.4% lower at $173.8 million as compared to $221.3 million in the same period last year.

Lastly, Starhub’s balance sheet weakened in the latest financial year. As of 31 December 2018, net debt stood at S$862.4 million, and the debt-to-EBITDA ratio stood at 1.52. The net debt and debt-to-EBITDA ratio were S$632.3 million and 0.98, respectively, as of 31 December 2017.

In sum, Starhub had a difficult year in 2018 with weaker metrics across the board.

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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.