StarHub signals intention to go aggressive on acquisitions even as H1 profit falls 41.7%

[SINGAPORE] StarHub chief executive Nikhil Eapen on Thursday (Aug 14) declared that the telco will continue to be aggressive on acquisitions.

“We have a big war chest,” said Eapen at a briefing accompanying StarHub’s financial results for the first half-year ended June.

“We are also open to further small-scale consolidations in the domestic consumer space,” he added, noting that StarHub has strong cash flow and low leverage levels.

StarHub’s net profit slid 41.7 per cent to S$47.9 million for H1, from S$82.1 million in the corresponding year-ago period.

The drop included a one-off forfeiture payment of S$14.1 million for the return of certain spectrum rights.

Earnings per share declined 43.8 per cent to S$0.026, from S$0.046 in the same period the year before.

Eapen’s comments come after StarHub on Tuesday announced the purchase of the rest of MyRepublic’s broadband business that it did not already own.

Just the day before, Keppel had proposed the sale of its M1 telco business to Simba Telecom – putting an end to long-time speculation about StarHub acquiring its competitor.

Shares of StarHub fell as much as 6.6 per cent on Monday in response to the news.

Responding to media queries about Simba’s acquisition of M1, Eapen noted that the consolidation is a good thing for the market and sector.

While he was unable to comment on StarHub’s bid, he added that StarHub’s aggressive stance on the consumer business will be the “best way to bring about market stabilisation and recovery”.

Keeping close eye on low-cost market

Meanwhile, StarHub will also continue pursuing its strategy to attract the low-cost market.

Responding to queries at the briefing, StarHub’s chief of consumer business group Matt Williams said: “We continue to execute our multi-brand, multi-segment strategy, which means that we are aggressive with Eight.” Eight is a mobile virtual network operator that runs on StarHub’s network.

He added that Eight is a leader for people seeking lower prices, and StarHub will be looking to incorporate additional benefits such as increased roaming allowance.

Williams said that MyRepublic’s broadband will remain independent following the acquisition by StarHub, with Eapen adding that the broadband segment is an “attractive segment”.

Williams noted that StarHub has plans to give access to MyRepublic customers to watch English Premier League football.

This more aggressive stance means that StarHub’s earnings before interest, depreciation, taxes and amortisation outlook for the 2025 financial year have been revised down to between 88 and 92 per cent of the 2024 figures.

“This revision reflects a deliberate strategic decision to preserve competitiveness and defend market share, while continuing to invest in long-term growth levers,” said StarHub.

Higher revenue

The drop in earnings comes despite revenue rising 2.2 per cent to S$1.13 billion in H1 from S$1.1 billion, thanks to higher contributions from its broadband, regional enterprise and cybersecurity services. Revenue from these segments rose 4.4 per cent, 6.8 per cent and 20.1 per cent, respectively.

The group’s regional enterprise business recorded S$296.1 million in revenue in H1 FY2025, from S$277.3 million in the same period in the prior year. This was due to a 12.8 per cent growth in managed services, reflecting higher project completions from StarHub’s modern digital infrastructure solutions.

This was offset by a drop in entertainment service revenue of 9.1 per cent, mainly due to a reduction in subscribers, and a 2.9 per cent fall in revenue from sales of equipment, mainly due to longer device-replacement cycles that resulted in lower volume of handsets sold.

Mobile subscribers rose 8.2 per cent, excluding the impact of a one-time consolidation of inactive prepaid subscribers.

The company has declared an interim dividend of S$0.03 per ordinary share for H1, same as the amount in the corresponding year-ago period. It will be paid on Sep 5.

The company previously guided for a full-year dividend per ordinary share of at least S$0.06 in 2025.

It noted that free cash flow might be temporarily affected by the one-off spectrum payment, but expects positive free cash flow trends from FY2026.

Shares of StarHub closed 1.7 per cent, or S$0.02 lower, at S$1.17 on Thursday.