By Singapore Newsroom
SINGAPORE (Feb 14) — Singapore’s No. 2 telecommunications company, StarHub said Wednesday its net profit in the fourth quarter fell 74% from a year earlier, mainly due to lower income grants and higher operating expenses.
Net profit for the quarter ended Dec. 31 totaled S$14.1 million ($10.68 million), declining from S$54 million a year earlier, StarHub said in an exchange filing.
Revenue in the fourth quarter was up 2.2% to S$649 million from S$634.8 million in the year-ago quarter on higher revenues from enterprise fixed services and sales of equipment, it said.
The company said its earnings before interest, taxes, depreciation and amortization (EBITDA) fell 29% on year to S$96.8 million due to “one-off provisions made for certain staff benefits to rationalize and retain talent in recognition of the business challenges and operating conditions, and for a leasing contract related to the cable network.”
StarHub faces intensifying competition in Singapore where a fourth mobile operator, Australia’s TPG Telecom, is scheduled to begin operations later this year. Besides market leader Singtel and smaller rival M1, StarHub also faces competition from Circles.Life, a mobile virtual network operator that leases bandwidth from M1.
For the quarter, Mobile service revenue, which accounts for nearly half of the company’s total revenue, fell 3.5% on year due to lower voice and IDD usage and lower plan subscription revenue, the company said.
The company said revenue from Pay TV segment was down 7.4% at S$86.9 million, while revenues from enterprise fixed services increased 20.9% to S$129.6 million.
For 2018, the company expects service revenue to be 1% to 3% lower, it said.
The company adopted accounting standard – SFRS(I) 15 from this year. “Group EBITDA margin is expected to be between 24% to 26% (before SFRS(I) 15 adoption) of service revenue, while EBITDA margin is expected to increase by another 4% to 6% (after SFRS(I) 15 adoption),” it added.
In 2018, capital expenditure is expected to be 11% of total revenue, excluding spectrum payments, it said.
The company said it plans to pay a quarterly cash dividend of four Singapore cents per share for 2018.
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