StarHub (CC3) Q1 2025 earnings summary

Executive summary

• Service revenue for Q1 2025 was SGD 464 million, down 0.7% year-over-year, with growth in Regional Enterprise and Broadband offset by declines in Mobile, Entertainment, and Cybersecurity revenues.

• EBITDA fell 5.2% year-over-year to SGD 100.2 million, impacted by lower gross profit and higher operating expenses, partially offset by lower staff costs.

• Net income for the quarter was SGD 31.8 million, down 18.4% year-over-year, reflecting EBITDA decline and higher depreciation from network investments.

• The company continues to execute a multi-brand, multi-segment strategy, focusing on premium, digital, and value segments to retain and grow market share.

• Transformation initiatives are nearing completion, with cost reduction and efficiency gains expected to accelerate, especially from 2026.

Financial highlights

• Total revenue decreased 2.4% year-over-year to SGD 540.5 million.

• Free cash flow for the quarter was SGD 32 million, down 63% year-over-year due to higher CapEx and working capital movements.

• Net debt to EBITDA improved to 1.26x as of March 31, 2025, providing strong financial flexibility.

• EPS for the quarter was SGD 0.017 per share.

• Service EBITDA margin was 20.6%, down 0.5 percentage points year-over-year.

Outlook and guidance

• Guidance for the full year is reiterated, with expectations for positive free cash flow despite spectrum payments and final transformation investments.

• Remaining transformational investments are expected to complete by H1 2025, contributing to higher operating and capital expenditures.

• Cost efficiencies from legacy system shutdowns and automation are expected to deliver meaningful savings from 2026.

• Key priorities include defending/growing consumer market share, scaling regional enterprise, pursuing acquisitive growth, and maintaining dividend commitments.