StarHub : Announcement

STARHUB LTD

StarHub Ltd

Reg. No.:199802208C

67Ubi Avenue1

#05-01 StarHub Green

Singapore 408942

Tel(65) 6825 5000

Fax(65)6721 5000



Announcement of Unaudited Results for the Half Year ended 30 June 2023

StarHub is pleased to announce the unaudited results for the half year ended 30 June 2023.

STARHUB LTD

Results for the Half Year ended 30 June 2023

1. GROUP INCOME AND COMPREHENSIVE INCOME STATEMENTS

1.1 GROUP INCOME STATEMENT

			Half Year ended 30 Jun
		2023	2022	Incr / (Decr)
		S$m	S$m	S$m	%
Total revenue		1,106.1	1,058.6	47.5	4.5
Operating expenses	(1,000.7)	(967.0)	33.7	3.5
Other income		1.6	4.1	(2.5)	(61.2)
Profit from operations	107.0	95.7	11.3	11.9
Non-operating income	-	0.5	(0.5)	(100.0)
Finance income	(1)	7.4	2.8	4.6	163.3
Finance expense	(20.0)	(23.6)	(3.6)	(15.4)
		94.4	75.4	19.0	25.3
Share of gain of associate, net of tax	0.5	0.1	0.3	nm
Share of gain of joint venture, net of tax	1.2	1.5	(0.3)	(19.6)
Profit before taxation	96.1	77.0	19.1	24.7
Taxation		(20.9)	(15.5)	5.5	35.3
Profit for the period	75.2	61.6	13.6	22.1
Attributable to:
Owners of the Company	76.7	60.9	15.7	25.8
Non-controlling interests	(1.5)	0.6	(2.1)	nm
		75.2	61.6	13.6	22.1
Earnings per share (in cents)
- Basic		4.2	3.3	0.9	27.8
- Diluted		4.2	3.3	0.9	27.7
EBITDA		229.8	229.7	0.0	0.0
Service EBITDA	(2)	212.5	213.9	(1.5)	(0.7)
Service EBITDA as % of service revenue	22.7%	24.6%	-1.9% pts
Free Cash Flow	(3)	(0.0)	61.3	(61.3)	nm
Profit from operations is arrived after charging the following:
Loss allowances of trade receivables	9.6	2.8	6.9	nm
Depreciation and amortisation	122.8	134.1	(11.3)	(8.4)
Foreign exchange (gain)/ loss	0.6	(0.5)	1.1	nm
Allowance for stock obsolescence	3.5	(1.3)	4.7	nm

nm - Not meaningful

Notes:

1. Finance expense includes interest on borrowings and lease liabilities and other financing charges
2. Service EBITDA refers to EBITDA less equipment margin (sales of equipment less cost of equipment)
3. Free Cash Flow refers to net cash from operating activities less purchase of property, plant and equipment and intangible assets in the cash flow statement
4. The financial statements for the half year ended 30 June 2022 include the consolidation of newly acquired subsidiaries, JOS (SG) Pte. Ltd. (formerly known as HKBN JOS (SG) Pte. Ltd.) ("JOS SG") and JOS (Malaysia) Sdn. Bhd. (formerly known as HKBN JOS (Malaysia) Sdn. Bhd.) ("JOS MY"), following the completion of acquisition on 3 January 2022; and MyRepublic Broadband Pte Ltd (MyRepublic Broadband"), following the completion of acquisition on 21 March 2022
5. Numbers in all tables may not exactly add up due to rounding

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STARHUB LTD

1.2 GROUP COMPREHENSIVE INCOME STATEMENT

	Half Year ended 30 Jun
	2023	2022	Incr / (Decr)
	S$m	S$m	S$m	%
Profit for the period	75.2	61.6	13.6	22.1
Other comprehensive income
Items that will not be reclassified to profit or loss:
Net change in fair value of equity investment at fair value
through other comprehensive income ("FVOCI"), net of
taxation	(0.6)	0.6	(1.1)	nm
Items that are or may be reclassified subsequently to profit or
loss:
Foreign currency translation differences	0.2	0.0	0.2	nm
Effective portion of changes in fair value of cash flow
hedges, net of taxation	4.2	0.6	3.6	nm
Share of other comprehensive income of associate and joint
venture	(0.1)	1.6	(1.7)	nm
Foreign currency translation reserve on liquidation of
subsidiary	-	-	-	-
Other comprehensive income for the period, net of taxation	3.8	2.7	1.0	37.1
Total comprehensive income for the period	78.9	64.3	14.6	22.7
Attributable to:
Owners of the Company	80.4	63.6	16.9	26.5
Non-controlling interests	(1.5)	0.8	(2.2)	nm
Total comprehensive income for the period	78.9	64.3	14.6	22.7

nm - Not meaningful

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STARHUB LTD

1.3 GROUP PERFORMANCE REVIEW FOR THE HALF YEAR ENDED 30 JUNE 2023

1. Revenue

					Half Year ended 30 Jun
				2023	2022	Incr / (Decr)
Revenue				S$m	S$m	S$m	%
Mobile				302.7	268.3	34.4	12.8
Broadband	(1)			124.6	115.8	8.8	7.6
Entertainment			113.9	96.4	17.5	18.2
Enterprise Business		396.9	390.0	6.9	1.8
- Network Solutions	(1) (2)		183.0	175.0	8.0	4.6
- Cybersecurity Services	(3)	129.0	120.6	8.4	7.0
(4)
- Regional ICT Services	85.0	94.4	(9.5)	(10.0)
Service revenue			938.1	870.5	67.6	7.8
Sales of Equipment	(5)		168.0	188.0	(20.0)	(10.7)
Total revenue			1,106.1	1,058.6	47.5	4.5

1. Includes service revenue from MyRepublic Broadband
2. Includes Data & Internet, Managed Services and Voice Services
3. Includes service revenue from Ensign and D'Crypt
4. Includes service revenue from Strateq, JOS SG and JOS MY
5. Includes Sales of Equipment revenue from MyRepublic Broadband

The Group's 1H2023 total revenue of S$1,106.1 million was S$47.5 million or 4.5% higher year-on-year ("YoY"), mainly due to higher contributions from Mobile, Broadband, Entertainment and Enterprise Business, offset by lower Sales of Equipment.

Against the corresponding period last year, 1H2023 Mobile service revenue rose 12.8% YoY due to higher Postpaid and Prepaid revenues. The increase in 1H2023 Postpaid revenue was lifted by higher roaming, voice and data subscriptions, and value-added services ("VAS") revenues partially offset by lower IDD revenue, excess data usage, SMS usage, voice usage and the absence of S$1.7 million in one-off revenue recognised in 1H2022 relating to an infrastructure project. Excluding this one-off revenue, Mobile service revenue would have been S$36.1 million or 13.5% higher YoY. The YoY increase in 1H2023 Prepaid revenues was due to an increase in the number of tourists and foreign workers from the reopening of borders coupled with higher data subscriptions and increased Prepaid expired credits, partially offset by lower voice revenue and IDD revenue.

Broadband service revenue increased 7.6% YoY in 1H2023, mainly due to higher subscription revenue achieved that lifted ARPU, as well as the consolidation of MyRepublic Broadband from 2Q2022.

Entertainment service revenue increased 18.2% YoY in 1H2023, due to higher subscription, commercial TV and advertising revenues. These increases were mainly driven by Premier League that commenced in 3Q2022.

Enterprise Business revenue increased 1.8% YoY in 1H2023, due to higher revenues from Data & Internet, Managed Services and Cybersecurity Services, partially offset by lower revenues from Voice Services and Regional ICT Services.

Revenue from Sales of Equipment decreased 10.7% YoY in 1H2023, mainly due to lower volume of handsets sold.

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STARHUB LTD

(B) Operating expenses

					Half Year ended 30 Jun
				2023	2022	Incr / (Decr)
Operating expenses			S$m	S$m	S$m	%
Cost of sales	(1)			406.8	383.2	23.6	6.2
Other operating expenses	(1)	370.9	366.7	4.2	1.1
Cybersecurity Services	(2)		138.9	123.5	15.4	12.5
Regional ICT Services	(3)		84.1	93.6	(9.6)	(10.2)
Total				1,000.7	967.0	33.7	3.5

1. Includes cost of sales and other operating expenses from MyRepublic Broadband
2. Includes cost of sales and other operating expenses from Ensign and D'Crypt
3. Includes cost of sales and other operating expenses from Strateq, JOS SG and JOS MY

The Group's total operating expenses in 1H2023 was S$33.7 million higher YoY, mainly due to the consolidation of MyRepublic Broadband from 2Q2022, as well as higher Cybersecurity Services operating expenses; partially offset by lower Regional ICT Services operating expenses. Excluding operating expenses relating to MyRepublic Broadband, Cybersecurity Services and Regional ICT Services, the Group's total operating expenses in 1H2023 grew 1.8% YoY, mainly due to higher cost of services in line with higher service revenue, partially offset by lower cost of equipment and lower other operating expenses.

As a percentage of the Group's total revenue, total operating expenses in 1H2023 was at 90.5% compared to 91.3% in the corresponding period last year. Excluding MyRepublic Broadband, Cybersecurity Services and Regional ICT Services, the Group's total operating expenses in 1H2023 was 87.5% of the Group's total revenue compared to 89.0% in the corresponding period last year.

Cybersecurity Services	(1)
Cost of sales
Other operating expenses
Total

	Half Year ended 30 Jun
2023	2022	Incr / (Decr)
S$m	S$m	S$m	%
66.3	57.0	9.2	16.2
72.7	66.5	6.2	9.3
138.9	123.5	15.4	12.5

(1) includes cost of sales and other operating expenses from Ensign and D'Crypt

As a percentage of Cybersecurity Services revenue, operating expenses for the segment in 1H2023 increased to 107.7% compared to 102.4% in the corresponding period last year.

			Half Year ended 30 Jun
		2023	2022	Incr / (Decr)
Regional ICT Services	(1)	S$m	S$m	S$m	%
Cost of sales		49.8	57.6	(7.8)	(13.6)
Other operating expenses	34.3	36.0	(1.8)	(4.9)
Total		84.1	93.6	(9.6)	(10.2)

1. Includes cost of sales and other operating expenses from Strateq, JOS SG and JOS MY

As a percentage of Regional ICT Services revenue, the segment's operating expenses in 1H2023 was 98.9% compared to 99.2% in the corresponding period last year.

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