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StarHub after-tax profit jumps 22 percent

In otherwise flat results, Singaporean telco StarHub has seen a rise of 22 percent in net profit after tax.
Written by Chris Duckett, Contributor

Despite a mere 2 percent increase in operating revenue to SG$603 million for the third quarter, StarHub has recorded a 22 percent jump in net profit after tax to bank SG$118.7 million for the quarter, the company reported on Friday.

The Singaporean telco also saw a 4 percent rise in earnings before interest, tax, depreciation, and amortisation (EBITDA) to record SG$199.1 million for 3Q and a year-to-date EBITDA of SG$555.7 million.

An increase in working capital needs and tax payments saw the telco decrease its free cash flow by 31 percent to S$196.1 million for three quarters this year.

StarHub saw 4 percent revenue increases in both its fixed network and broadband businesses for the quarter, with fixed network seeing rises in enterprise internet subscriptions and managed services, but a 6 percent drop year on year for voice services. In its broadband business, StarHub added 2,100 customers in the quarter, taking its customer total to 477,000, while average revenue per user (ARPU) fell during the quarter and continued a trend experienced throughout this year.

In its mobile business, StarHub reported steady revenue and took postpaid customer ARPU in the quarter to SG$71, up SG$3 quarter on quarter, which the company said resulted from new tiered 4G plans with higher monthly subscriptions and higher data usage. ARPU for prepaid customers was steady, at SG$18.

"We are pleased with our overall performance this quarter," said StarHub CEO Tan Tong Hai. "This is the third consecutive quarter that we have seen growth in our residential broadband revenue."

For its first and second quarters of the year, the company reported lower profits on the back of lower broadband revenue.

In a recent survey by OpenSignal, StarHub recorded the fastest overall speed worldwide, clocking up 38Mbps, but recorded only 77 percent coverage, which was lower than its Singaporean competitors. Singtel recorded 88 percent coverage at 32Mbps, with M1 having 86 percent LTE coverage with 30Mbps in download speeds.

"Our investment in upgrading our 4G network to serve our customers better has reaped rewards," Tan said.

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