StarHub (CC3) H2 2021 earnings summary

Executive summary

• FY2021 net profit was $148.3M, up 17% excluding the effect of JSS payouts recognized in the comparative periods; revenue was $2.04B.

• FY2021 service revenue grew 1.4% YoY and service EBITDA margin was 29.8%, both ahead of guidance; free cash flow rose 25% to $484.6M.

Financial highlights

• Service revenue growth of 1.4% YoY exceeded prior guidance for stable revenue; lower operating expenses reflected financial discipline, efficiency gains and digitalisation.

• Free cash flow increased 25% YoY to $484.6M, supported by Capex Commitment of 3.7% of total revenue.

Outlook and guidance

• FY2022 service revenue is expected to grow at least 10%, including higher revenue across most segments and initial contributions from JOS Singapore and Malaysia and MyRepublic Broadband.

• FY2023 service revenue is targeted to grow an incremental 5%–10% YoY as early DARE+ outcomes begin.

• Service EBITDA margin is expected to be at least 20% in FY2022 and recover to at least 23% in FY2023.

• BAU Capex Commitment is expected at 7%–9% of revenue; total commitment, including front-loaded investment, is guided at 12%–15% in both FY2022 and FY2023.

• Minimum dividend commitment is 5.0 cents per ordinary share for FY2022 and FY2023.