starhub’s 1h-2008 resultsir.starhub.com/formbuilder/_resource/_module/gzsllgdlcu638zpq… ·...
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StarHub’s 1H-2008 Results
6 August 2008
2
Management Team
Terry CLONTZCEO
KWEK Buck ChyeCFO
3
Forward-looking Statements
The following presentation may contain forward-looking statements by StarHub Ltd (“StarHub”) relating to financial trends for future periods.
Some of the statements in this presentation which are not historical facts are statements of future expectations with respect to the financial conditions, results of operations and businesses, and related plans and objectives. These forward-looking statements are based on StarHub’s current views, intentions, plans, expectations, assumptions and beliefs about future events and are subject to risks, uncertainties and other factors, many of which are outside StarHub’s control. Important factors that could cause actual results to differ materially from the expectations expressed or implied in the forward-looking statements include known and unknown risks and uncertainties. Because actual results could differ materially from StarHub’s current views, intentions, plans, expectations, assumptions and beliefs about the future, such forward-looking statements are not and should not be construed as a representation, forecast or projection of future performance of StarHub. It should be noted that the actual performance of StarHub may vary significantly from such statements.
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Financial:
Revenue expanded 11%EBITDA contracted 2%EPS increased 3%
Operational:
Strengths:• Revenue growth: Pay TV, Mobile Post-paid & Fixed Networks Data Services• Highest quarter net adds for Mobile Post-paid in over five years• Low churn recorded for all three lines of business
Competitive environment remained intense:• Mobile pre-paid revenue slipped 4%• Increased acquisition & retention costs• Higher Pay TV content costs
Overview (1H-2008 vs 1H-2007)
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Key Financial Highlights
Total Revenue 531 489 9% 1,066 962 11%
Service Revenue 508 463 10% 1,015 914 11%
EBITDA 147 164 -10% 314 321 -2%
EBITDA Margin 28.9% 35.3% (6.5)% pts 31.0% 35.2% (4.2)% pts
Net Profit After Tax 64 81 -21% 144 151 -4%
Earnings Per Share (Diluted) 3.73¢ 4.43¢ -16% 8.42¢ 8.17¢ 3%
Capex Cash Payments 46 42 -10% 105 66 -59%
% of Capex to Revenue 9 9 0% pts 10 7 (3)% pts
FCF / Fully Diluted Share 8.12¢ 8.90¢ -9% 9.93¢ 16.41¢ -40%
Net Debt to 2007 EBITDA ratio 1.29x 0.64x 0.65x 1.29x 0.64x 0.65x
S$ million 2Q-2008 2Q-2007 Change 1H-2008 1H-2007 Change
Note: Numbers may not add up due to rounding.
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Business Expansion (1H-2008 vs 1H-2007)
Pay TV
Fixed Network Services
Mobile
Cable Broadband
Post-paid (14%)Pre-paid (-4%) Pre-paid (10%) Post-paid (10%)
Data & Internet (21%) Voice (-22%)
(51% of revenue mix)
(19% of revenue mix)
(12% of revenue mix)
(14% of revenue mix)
Line of Business Service Revenue Customer Base
10% 10%
24%
9%
3%
3% 7%
7
366 365
240 239
141 160
1H-2007 1H-2008
Hubbing Scorecard
Expanding Hubbing Households (‘000)Expanding Hubbing Households (‘000)
Single Service HH Triple Service HHDouble Service HH
747K 764K
52%
8
127.5129.2
132.0
134.4135.3
2Q-2007 3Q-2007 4Q-2007 1Q-2008 2Q-2008
Total Households ARPUARPU (S$)
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Strategic Update
NGNBN
NetCo: IDA will award the winning bid in 3Q-2008
OpCo: Currently evaluating the RFPSubmission date has been revised by IDA to 29 September 2008
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Business Overview
Financial OverviewFinancial Overview
Outlook
11
2Q-2007 2Q-2008 1H-2007 1H-2008
2Q EBITDA 1H EBITDA
EBITDA Margin as % of Service Revenue
Fixed Cable Mobile
1H-2007 EBITDA 1H-2008 EBITDA
EBITDA & EBITDA Margin By Service Platforms
By Service Platforms
EBITDA Margin as % of Service Revenue
29.7%
35.8%
22.6%
26.3%
41.7%
34.6%
EBITDAEBITDA
(S$ millions)
164147
28.9%
35.3%314321
31.0%35.2%
12
49 6494
1405777
109
150
57
59
113
118
2Q-2007 2Q-2008 1H-2007 1H-2008
Cost of Equipment Cost of ServicesTraffic Expenses Cost of Sales / Revenue
Operating Efficiencies
56 58111 117
122 127
241 242
4158
83102
2Q-2007 2Q-2008 1H-2007 1H-2008
Depreciation Other G&AMarketing & Promotion Operating Expense / Revenue
Other Operating ExpensesOther Operating Expenses(S$ millions)
Cost of SalesCost of Sales(S$ millions)
163
200
33%
38%
219243
46%45%
408
316
33%
38%
461435
43%45%
13
7080
81 64
1H-2007 1H-2008
2Q1Q
103 108
108 89
1H-2007 1H-2008
2Q1Q
Profitability
Profit from OperationsProfit from Operations
Net Profit After Tax (NPAT)Net Profit After Tax (NPAT)(S$ millions)
(S$ millions)
151
210197
144
Profit from operations dipped 6%
Impacted by the higher operating costs in the quarter which increased 16% YoY
For the half year, NPAT was 4% lower than 1H07
14
105
42
66
46
2Q-2007 2Q-2008 1H-2007 1H-2008
170
303
162140
2Q-2007 2Q-2008 1H-2007 1H-2008
Capex & Free Cash FlowCapex (cash payments)Capex (cash payments)
(S$ millions)
Free Cash Flow (FCF)Free Cash Flow (FCF)(S$ millions)
Cash capex as % of Operating Revenue
9%9%
10%
7%
Cash capex is expected not to exceed 12% by year-end
FCF for the quarter and half year was lower by 14% and 44% YoY
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Business Overview - MobileBusiness Overview - Mobile
Outlook
Financial Overview
16
Service revenue increased 10%Service revenue increased 10%
Mobile – Highlights (1H-2008 vs 1H-2007)
Post-paid revenue expanded 14%Post-paid revenue expanded 14%
Post-paid net additions of 48KPost-paid net additions of 48K
Pre-paid revenue dipped 4%Pre-paid revenue dipped 4%
17
Post-paid Mobile Net Adds
Net Adds (‘000)Net Adds (‘000)
9
19
12
36
(2)2Q-2007 3Q-2007 4Q-2007 1Q-2008 2Q-2008
18
Pre-paid Mobile Net Adds
Net Adds (‘000)Net Adds (‘000)
41
55
31
(40)
49
2Q-2007 3Q-2007 4Q-2007 1Q-2008 2Q-2008
19
Mobile
260 314 391 457 533
525 480 422 368328
848 889 944 975 935
2Q-2007 3Q-2007 4Q-2007 1Q-2008 2Q-2008
3G Post-paid 2G Post-paid Pre-paid
Customers (‘000)Customers (‘000)
1,6831,757
1,633
1,7961,799
212211207198
189
2Q-2007 3Q-2007 4Q-2007 1Q-2008 2Q-2008
Post-paid Revenue (S$M)Post-paid Revenue (S$M)
Pre-paid Revenue (S$M)Pre-paid Revenue (S$M)
6468 68
6358
2Q-2007 3Q-2007 4Q-2007 1Q-2008 2Q-2008
Note: Numbers may not add up due to rounding.
52%
48%
79%
21%
20
74 78 79 79 77
2Q-2007 3Q-2007 4Q-2007 1Q-2008 2Q-2008
11.2 11.412.5 11.9 12.0
2Q-2007 3Q-2007 4Q-2007 1Q-2008 2Q-2008
26 26 26
2220
2Q-2007 3Q-2007 4Q-2007 1Q-2008 2Q-2008
Mobile ARPU & Non-Voice Services
Post-paid ARPU (S$ per month)Post-paid ARPU (S$ per month)Pre-paid ARPU (S$ per month)Pre-paid ARPU (S$ per month)
Pre-paid non-voice services (% of ARPU)Pre-paid non-voice services (% of ARPU) Post-paid non-voice services (% of ARPU)Post-paid non-voice services (% of ARPU)
23.7 23.3 23.3 23.9 24.7
2Q-2007 3Q-2007 4Q-2007 1Q-2008 2Q-2008
21
0.9
1.11.11.11.2
2Q-2007 3Q-2007 4Q-2007 1Q-2008 2Q-2008
148
124
979291
2Q-2007 3Q-2007 4Q-2007 1Q-2008 2Q-2008
Mobile Acquisition Costs & Churn Trend
Average Acquisition CostsAverage Acquisition Costs Monthly Churn Rate (Post-paid)Monthly Churn Rate (Post-paid)Per Gross Connection (S$) (%)
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Chat Anywhere - Asia's first integrated instant messaging mobile client that allows mobile customers to access Windows Live Messenger and Yahoo! Messenger
True Number Portability – 13 June 2008
Olympics – FREE for StarHub postpaid customers; full ‘LIVE’ coverage of the Olympic games on six channels
Mobile Updates
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Business Overview – Pay TVBusiness Overview – Pay TV
Outlook
Financial Overview
24
Pay TV – Highlights (1H-2008 vs 1H-2007)
Revenue expanded 24%Revenue expanded 24%
ARPU increased by S$9 to S$57ARPU increased by S$9 to S$57
Digital customers expanded to 89% of base (453K)Digital customers expanded to 89% of base (453K)
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Pay TV Net Adds
Net Adds (‘000)Net Adds (‘000)
3
5
3 3
1
2Q-2007 3Q-2007 4Q-2007 1Q-2008 2Q-2008
26
2Q-2007 3Q-2007 4Q-2007 1Q-2008 2Q-2008
Pay TV
Digital Customers( ) As a % of base
Pay TV Customers (‘000)Pay TV Customers (‘000)
453
(89%)
408
(81%)384
(77%)363
(73%)
511496
508504499
1029795
8682
2Q-2007 3Q-2007 4Q-2007 1Q-2008 2Q-2008
Pay TV Revenue (S$M)Pay TV Revenue (S$M)
439
(87%)
Pay TV ARPU (S$ per month)Pay TV ARPU (S$ per month)
4951
5557 58
2Q-2007 3Q-2007 4Q-2007 1Q-2008 2Q-2008
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Upcoming: Video-On-Demand – offering popular shows with advanced windows
More HD content - expect five HD channels by the year-end
Olympics – FREE for StarHub Digital Cable customers; six dedicated cable TV channels, also on HD5
Pay TV Update
As at end June 2008, we have:Over 150 channels (including seven FTA and 40 Demand TV channels) in 13 languages
(Available from 14 August)
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Business Overview - BroadbandBusiness Overview - Broadband
Outlook
Financial Overview
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Broadband – Highlights (1H-2008 vs 1H-2007)
Revenue growth of 3% Revenue growth of 3%
ARPU slipped S$2 to S$58ARPU slipped S$2 to S$58
Net customer additions of 25K (7% growth)Net customer additions of 25K (7% growth)
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Residential Broadband Net Adds
Net Adds (‘000)Net Adds (‘000)
4
87
65
2Q-2007 3Q-2007 4Q-2007 1Q-2008 2Q-2008
31
Residential Broadband
Broadband Customers (‘000)Broadband Customers (‘000)
358352346
338334
2Q-2007 3Q-2007 4Q-2007 1Q-2008 2Q-2008
6264
626262
2Q-2007 3Q-2007 4Q-2007 1Q-2008 2Q-2008
Broadband Revenue (S$M)Broadband Revenue (S$M)
Broadband ARPU (S$)Broadband ARPU (S$)
60 60 60 5957
2Q-2007 3Q-2007 4Q-2007 1Q-2008 2Q-2008
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MOL Milestones (2Q-2006 to 2Q-2008)
MOL Ultimate(S$124.12 monthly)
2Q06 3Q06 4Q06 1Q07 2Q07 3Q07 4Q07 1Q08 2Q08
MOL Premium(S$81.32 monthly)
MOL Express(S$59.92 monthly)
MOL SurfLite(S$29.96 monthly)
30Mbps
100Mbps
6.5Mbps
12Mbps
4Mbps
8Mbps
1Mbps
2Mbps
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1.1
1.41.4
1.31.3
2Q-2007 3Q-2007 4Q-2007 1Q-2008 2Q-2008
Residential Broadband Churn
Average Monthly Churn Rate (%)Average Monthly Churn Rate (%)
34
Business Overview – Fixed Network ServicesBusiness Overview – Fixed Network Services
Outlook
Financial Overview
35
Fixed Network Services – Highlights (1H-2008 vs 1H-2007)
Revenue growth of 9%Revenue growth of 9%
Data & Internet revenue grew 21%Data & Internet revenue grew 21%
Data & Internet services contribute 81% of revenueData & Internet services contribute 81% of revenue
36
75737267 73
2Q-2007 3Q-2007 4Q-2007 1Q-2008 2Q-2008
Fixed Network Services
Fixed Network Revenue (S$M)Fixed Network Revenue (S$M) 1513
19
16
20
2Q-2007 3Q-2007 4Q-2007 1Q-2008 2Q-2008
Voice (S$M)Voice (S$M)
6060
535350
2Q-2007 3Q-2007 4Q-2007 1Q-2008 2Q-2008
Data & Internet (S$M)Data & Internet (S$M)
Note: Numbers may not add up due to rounding.
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OutlookOutlook
Business Overview
Financial Overview
38
FY2008 Outlook
Revenue: Revenue growth revised to around 7% YoY
EBITDA: EBITDA margin on service revenue revised to about 31%
CAPEX: As a percent of operating revenue,
cash capex to not exceed 12%
Dividend: To pay 2Q-2008 interim dividend of 4.5 cents per share
Expect a minimum annual cash dividend of 18.0 cents per share for FY2008
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For enquiries, please contact:
Jeannie ONG Eric LOHHead, Corporate
Communications & Investor Relations
Manager, Corporate Communications & Investor
Relations
Office: (65) 6825 5168 Office: (65) 6825 5171
Email: [email protected] or [email protected]
Email: [email protected] or [email protected]