In StarHub's latest business update, the telco company announced that its 1QFY2021 earnings have dropped by 24.0% y-o-y to $30.5 million from $40.2 million.
On a q-o-q basis, 1QFY2021 earnings were lower than 4QFY2020's $36.1 million by some 15.3%.
For the first quarter ended March, total revenue came in at $487.1 million, 3.8% lower than $506.2 million in the same period last year. Total revenue was dragged down by lower contribution from the group's mobile and pay tv segments.
StarHub's mobile segment saw a 20.8% y-o-y drop in revenue from $163.5 to $129.6 million, mainly due to lower postpaid average revenue per user (ARPU) as the Covid-19 pandemic has affected revenue contributions from roaming, value-added services (VAS) and excess data usage. Prepad subscriber has also fell due to the decrease in tourist numbers.
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The pay tv segment fell by 4.0% y-o-y to $44.9 million, despite ARPU improving as the group dished out discounted to customers. But the decline in revenue in this segment was due to the lower subscriber base and lower advertising spend and commercial TV revenue by Enterprise customers on the back of a more cautious business outlook amid the pandemic.
However, the drop in revenue was partially offset by higher revenue contribution by the group's broadband and enterprise segments, which saw revenue increase by 12.6% and 0.9% y-o-y to $47.0 million and $154.2 million, respectively.
The broadband segment revenue improvement was mainly due to higher ARPUs achieved, which was a result of reduction in subscription discounts extended to customers.
The enterprise segment saw higher contribution from its network solutions business, as well as its regional ICT services, as FY2021 marks the first full year consolidation of Strateq. The group's cybersecurity business saw a decline in revenue due to project delays amid the pandemic.
StarHub's free cash flow stood at $97.4 million as at end-March, while net debt to EBITDA ratio came in at 1.29 times, lower than that of 1.41 times as at end-December last year
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Nikhil Eapen, StarHub's CEO says, "We are pleased to see stabilisation on a q-o-q bass for our pay tv and broadband segments, while competition remained intense in the mobile segment. Strategically, we remained focused on driving differentiation with rich content and entertainment experiences delivered over our superior network to bring unique value to customers. This has resulted in growth over the last quarter for our 5G Mobile+ plans and enhanced OTT content offerings."
"Our enterprise business has observed increased business activity in 1QFY2021 as deferred projects in 2020 are re-committed for 2021 and beyond. Concurrently, we continue to position for growth in the areas of 5G, IoT and cloud with the launch of our 5G IoT partnership with Software AG during the quarter and our award of the Microsoft Gold certification that will bolster our capabilities to offer innovative digital solutions to customers," adds Eapen.
On May 4, Shares in StarHub closed at $1.30.
