Yahoo Finance StarHub posts 25.8% higher net profit in 1HFY2023, reiterates 5 cents full-year DPS promise
The group has declared an interim dividend of 2.5 cents for 1HFY2023.
StarHub CC3 has reported net profit attributable to shareholders of $76.7 million for 1HFY2023 ended June, up 25.8% y-o-y, lifted mainly by higher contributions across all business segments.
Service revenue grew 7.8% y-o-y to $938.1 million during the half-year period, says StarHub on Aug 3, lifted by a 12.8% revenue growth in its mobile segment, 7.6% for its broadband segment, 18.2% for its entertainment segment and 1.8% for its enterprise segment.
The group has declared an interim dividend of 2.5 cents for 1HFY2023, while reiterating its dividend guidance of at least 5.0 cents per share in FY2023.
StarHub’s total revenue of $1,106.1 million for 1HFY2023 was 4.5% higher y-o-y, while its operating expenses grew 3.5% y-o-y to $1,000.7 million over the same period.
Earnings per share for 1HFY2023 stands at 4.2 cents, up from 3.3 cents this time last year; with a smaller base of 1,728,925 shares compared to 1,730,859 this time last year.
As at June 30, the group’s net asset value per share stands at 32.5 cents, up from 30.7 cents as at Dec 31, 2022.
Average revenue per unit (ARPU) grew y-o-y across most segments, says StarHub. Postpaid ARPU rose to $32 from $29, broadband ARPU grew to $34 from $33 and entertainment ARPU grew to $44 from $38.
Meanwhile, enterprise revenue was bolstered by a 4.6% increase in network solutions revenue, and buoyed by a 20.6% growth in the group’s managed services, as well as a 7% growth in cybersecurity services revenue.
These were offset by a 10% y-o-y decline in regional ICT services due to lower hardware sales, says StarHub.
As at June 30, the group’s total non-current assets of $1,705.5 million was $9.1 million lower compared to Dec 31, 2022.
The decrease was primarily due to lower intangible assets, lower property, plant and equipment (PPE) and lower right-of-use (ROU) assets; partially offset by higher investments in a joint venture and higher contract assets.
Total current assets as at June 30 decreased by $158.6 million to $1,260.7 million, mainly due to lower cash and cash equivalents, lower contract assets, lower contract costs, lower amounts due from related parties and lower balances in trade receivables, other receivables, deposits and prepayments, says StarHub.
Meanwhile, total current liabilities decreased $166.0 million to $994.2 million as at June 30, mainly due to lower trade and other payables coupled with lower contract liabilities; partially offset by higher provision for taxation and higher lease liabilities.
StarHub attributes the decrease in total non-current liabilities by $28.5 million to $1,261.4 million as at June 30 to lower lease liabilities and lower deferred tax liabilities.
StarHub chief executive Nikhil Eapen says StarHub is investing “significantly” in transformation in 2H2023, towards “harvesting benefits from 2024”. “Our objective is to enhance total shareholder returns and deliver first-of-its-kind value to our Singapore society.”
World’s first autonomous metropolitan cloud network
Through its IT and network transformation efforts, StarHub is also progressing towards building the world’s first autonomous metropolitan cloud network through Cloud Infinity. Eapen explains that this allows StarHub’s customers to provision multi-cloud securely and effectively, from core to edge.
“This is something that we are building for ourselves — moving our network onto the combination of hybrid and public cloud — which gives us a great degree of scalability, resilience and agility in our network, aside from the ability to apply artificial intelligence to monitor our network better. This is something we are externalising with the same benefits for our enterprise customers, largely,” says Eapen.
He clarifies that there are several operators that have built networks on the cloud, while some other larger operators around the world have moved segments of their network onto the cloud. That said, StarHub will be the first operator globally to move their entire network onto the cloud, Eapen notes.
The rollout for the autonomous metropolitan cloud network is currently on track and StarHub is co-creating minimum viable product trials with selected beta enterprise clients. The company will share more about the projected timeline in the coming months.
Responding to a query about possible mergers and acquisitions with other telco operators, Eapen reiterates that he believes consolidation is healthy in the industry. StarHub is also comfortable and confident in the progress of its DARE+ transformation, which is starting to contribute a “good profitability upswing”.
“In addition to profitability, we had strong free cash flow, even through this investment cycle as well as very low leverage. So we are positioned, ready and able to acquire should the opportunity present itself, but we are not in a position to provide specifics on potential behaviours or perspectives of other operators,” says Eapen.
Shares in StarHub closed flat at $1.05 on Aug 3.
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