StarHub Q3 profit falls 82.4% to S$3.9 million amid high operating leverage, depreciation

Detailed summary

Consumer segment retreats with mobile, broadband, entertainment revenues down 6%, 4% and 10%, respectively

Consumer segment retreats with mobile, broadband, entertainment revenues down 6%, 4% and 10%, respectively

[SINGAPORE] StarHub on Thursday (Nov 12) reported an 82.4 per cent drop in net profit to S$3.9 million for the third quarter ended Sep 30, from S$22.1 million the previous year.

The telco attributed the fall to the impact of high operating leverage, as well as higher depreciation and amortisation.

Earnings before interest, tax, depreciation and amortisation (Ebitda) dipped 26.3 per cent to S$72.1 million, from S$97.8 million a year earlier.

StarHub said that despite rising revenue, Ebitda continued to decline because of lower gross profit, higher operating expenditure and lower income from other avenues.

Operating expenses rose mainly because of higher staff costs, which StarHub said reflected “deliberate investments in capabilities and business growth”.

In response to queries from The Business Times, a StarHub spokesperson said the investments were aimed at “strengthening core functions and building enterprise capabilities as we scale the business”.

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These investments were being made “alongside our ongoing cost optimisation efforts”, noted the spokesperson. StarHub did not share how much staff costs rose.

Opening of the article, excerpted from The Business Times. To read the rest, open the article on the publisher's site.