StarHub Q3 Ebitda falls 26.3% to S$72.1 million as staff costs eat into higher revenue

[SINGAPORE] StarHub on Thursday (Nov 12) reported a 26.3 per cent drop in earnings before interest, taxes, depreciation and amortisation (Ebitda) to S$72.1 million for the third quarter ended Sep 30, from S$97.8 million the previous year.

Net profit stood at S$3.9 million; the telco noted that it reflects the impact of high operating leverage as well as higher depreciation and amortisation.

It said that despite rising revenue, Ebitda continued to decline because of lower gross profit, higher operating expenditure and lower income from other avenues.

The higher operating expenditure is attributable to higher staff cost as a result of deliberate investments in capabilities and business growth, offsetting improvements in gross profit, said the telco.

Revenue rose to S$486.8 million, up 4.5 per cent from S$464.8 million a year earlier.

Service revenue grew 2.9 per cent to S$396.1 million, from S$384.9 million the previous year.

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The telco attributed the growth in service revenue to an 18.4 per cent year-on-year revenue increase in the enterprise segment.

However, the consumer segment – which comprises mobile, broadband and entertainment – saw a decline across its revenues.

Compared with Q3 last year, mobile revenue was down 6 per cent, broadband revenue dropped 4.1 per cent and entertainment revenue fell 10.6 per cent.

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StarHub noted that both mobile and broadband revenue declined amid falling subscription revenue due to price competition.

Mobile average revenue per user (ARPU) stood at S$19.20, down from S$21.70 the previous year.

Broadband ARPU fell to S$31.90 from S$34.10 the previous year. The telco attributed the fall to price competition, despite rising customer subscriptions.

“Q3 reflects early signs of revenue stabilisation with improving enterprise momentum and broadly stable consumer performance,” noted StarHub in a bourse filing.

Outlook remains in line

The telco noted that it is expected to achieve the target it has set earlier this year.

This includes achieving 75 to 80 per cent of its FY2025 Ebitda, as well as its capital expenditure commitment of 13 to 15 per cent of its total revenue.

Moreover, StarHub reiterated its dividend policy, which is the higher of S$0.06 a share or at least 80 per cent of net profit attributable to shareholders adjusted for one-off.

Its nine-month net profit, excluding Ensign, stood at S$262 million.

StarHub added that it is on track to achieving its S$70 million in cost savings. It noted that year to date, it has achieved 15 per cent of its cost-savings targets.

Talks with Keppel are still ongoing with regard to a possible transaction in relation to M1, the telco noted.

A separate bourse filing on Thursday confirmed that CEO-designate Matt Williams will take on the role of both CEO and executive director from Jan 1, 2027.

Shares of StarHub ended 1 per cent or S$0.01 lower at S$1.04 on Wednesday.