StarHub (CC3) H2 2024 earnings summary

Executive summary

• Service revenue grew 3.9% year-on-year to $2.0B for FY2024, with Q4 up 15% due to a one-off cybersecurity revenue spike; total revenue increased 1.4% to $2.4B, driven by broadband and enterprise segments, partially offset by declines in mobile and entertainment revenues.

• Net profit after tax attributable to shareholders rose 7.7% year-on-year to $161.7M, supported by higher operating profit, lower non-operating expenses, and lower taxation.

• Transformation initiatives are nearing completion, focusing on automation, data-driven operations, and leaner cost structures, with investments expected to conclude by 1H2025.

• Strong free cash flow and low leverage (net debt/EBITDA at 1.29x) provide flexibility for dividends, M&A, and strategic investments.

• Dividend payout for FY2024 was 6.2 cents per share, exceeding the minimum policy, with ongoing share buyback program.

Financial highlights

• Service EBITDA grew 3.1% year-on-year to $437.4M, with a margin of 21.7%.

• Free cash flow was $162.2M, with cash and bank balances at $540M at year-end.

• Capex commitment for FY2024 was 9.5% of total revenue, below the guided range.

• Net debt to EBITDA improved to 1.29x as of 31 December 2024.

• Dividend payout ratio was 80.6%.

Outlook and guidance

• FY2025 EBITDA expected to remain stable, supported by cost optimization and margin efficiencies as transformation completes.

• Capex guidance maintained at 9%-11% of total revenue, excluding one-time spectrum spend.

• Dividend policy remains at no less than 6.0 cents per share or 80% of net profit, whichever is higher.

• Focus on organic/inorganic growth, customer-centric strategies, and continued Enterprise expansion.

• Full benefits of transformation and cost savings expected to materialize more in 2026.