StarHub (CC3) Q2 2024 earnings summary

Executive summary

• Service revenue grew 2.4% year-over-year in 1H2024, mainly driven by Enterprise segment growth, offset by declines in Mobile, Broadband, and Entertainment; total revenue was S$1,104.9M, stable year-over-year.

• Net profit attributable to shareholders rose 8.7% year-over-year to S$83.3M, supported by higher EBITDA, lower depreciation, and reduced finance costs; profit after tax was S$79.9M, up 6.3%.

• Excluding D'Crypt divestment, service revenue grew 2.4% and profit after tax increased 9.2% year-over-year.

• Interim dividend of 3.0 cents per share declared, up from 2.5 cents in the prior year period.

Financial highlights

• 1H2024 total revenue: S$1,104.9M; service revenue: S$947.6M (+1.0% YoY); service EBITDA: S$223.8M; margin: 22.3%.

• Net profit after tax: S$83.3M (+8.7% YoY); basic EPS: 4.6 cents (up from 4.2 cents in 1H2023).

• Free cash flow: S$101.6M, a significant improvement from near zero in 1H2023.

• Net cash from operating activities: S$184.2M, up S$85.8M YoY.

• CAPEX payments: S$82.5M (7.5% of revenue), below guidance.

Outlook and guidance

• FY2024 service revenue expected to grow 1–3% YoY (excluding D'Crypt); service EBITDA margin around 22%.

• Capex (including investments) at 7.7% of revenue, better than expected; commitment of 11–13% of revenue for FY2024.

• Dividend policy maintained at minimum 6.0 cents per share for FY2024, with at least 80% of adjusted net profit to be distributed.

• DARE+ transformation programme nearing completion, with benefits expected from FY2025.