StarHub reveals cost of COVID-19 lockdown in Q2 results

Singapore-based operator StarHub became the latest operator to reveal it was unable to escape the consequences of the coronavirus pandemic in the second quarter of this year, reporting a 15% slump in Q2 service revenue year-on-year to S$376.2 million (US$274 million).

Figure 1: Tapped out: Starhub's results buckled under the weight of coronavirus.
(Source: mroach on Flickr. CC 2.0)

The operator said Q2 2020 was the first full financial quarter affected by the coronavirus pandemic. Total revenue sank 18% to S$453.4 million (US$330.6 million) and net profit for the April‑June period fell 5.6% year-on-year to S$37.3 million (US$27 million).

Peter Kaliaropoulos, CEO of StarHub, said the challenging environment and business conditions "will likely sustain throughout 2020," but said the operator is still pushing forward with its growth and transformation plans.

Future proofing
For example, it recently began a multi-year IT transformation program, and has just been awarded 5G spectrum rights by the regulator.

"We are pleased to report the completion of the acquisition of Strateq recently, which will open up new and diversified sources of revenue and growth," said Kaliaropoulos.

Based on current business conditions and the possible impact of COVID-19, StarHub said service revenue is expected to decline 10% to 12% in the full year.

The group service EBITDA margin for FY2020 is forecast at between 27% and 29%.

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According to Business Times, the dividend was nearly halved to 2.5 Singapore cents a share, from 4.5 cents before, with StarHub's full-year payout guidance also lowered.

In the first six months of 2020, total revenue fell 16.5% to S$959.6 million (US$699.7 million), and service revenue declined 11.9% to S$781.1 million (US$569.6).

Net profit for the six-month period declined 17.2% to $77.4 million (US$56 million).

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— Anne Morris, contributing editor, special to Light Reading