StarHub Ltd 1H2025 Financial Results Analysis
StarHub Ltd released its financial results for the first half of 2025, highlighting a period marked by both challenges and strategic transformation. Below, we present a detailed breakdown of key financial metrics, business segment performance, exceptional items, and outlook for investors.
Key Financial Metrics & Performance Table
| Metric |
1H2025 |
2H2024 |
1H2024 |
YoY Change |
QoQ Change |
| Total Revenue (S\$M) |
1,128.8 |
(not disclosed) |
1,104.9 |
+2.2% |
N/A |
| Service Revenue (S\$M) |
976.1 |
(not disclosed) |
947.6 |
+3.0% |
N/A |
| EBITDA (S\$M) |
203.3 |
(not disclosed) |
223.8 |
-9.1% |
N/A |
| NPAT Attributable (S\$M) |
47.9 |
(not disclosed) |
82.1 |
-41.7% |
N/A |
| NPAT (excl. non-recurring items) (S\$M) |
62.0 |
(not disclosed) |
80.5 |
-23.0% |
N/A |
| Interim Dividend |
3.0 cents |
(not disclosed) |
(not disclosed) |
N/A |
N/A |
| FY25 Dividend Guidance |
6.0 cents or 80% of adj. net profit |
(not disclosed) |
(not disclosed) |
N/A |
N/A |
Historical Performance Trends
- Revenue continues to grow modestly (+2.2% YoY), driven mainly by Enterprise and Cybersecurity segments, partially offset by softness in Mobile and Entertainment.
- Profitability has declined, with EBITDA down 9.1% YoY and NPAT down 41.7% YoY (or 23% lower YoY if excluding exceptional items).
- Free Cash Flow (excluding spectrum payment) fell sharply to S\$16.2M from S\$101.6M a year ago, mainly due to higher capex and one-off spectrum payments.
- Leverage increased, with net debt to EBITDA rising to 1.92x (including spectrum payment) from 1.29x.
Exceptional Earnings and Expenses
- Reported NPAT was impacted by a one-off forfeiture payment of S\$14.1 million for the return of a 700 MHz spectrum lot in 1H2025.
- This was partially offset by the absence of a S\$2.0 million non-recurring DARE+ provision utilized in 1H2024.
- Excluding these exceptional items, the underlying NPAT would have been S\$62.0 million (23% lower YoY).
Divestments and M&A Activity
- StarHub completed the divestment of D’Crypt in February 2024, with only two months of its contributions included in the 1H2024 results.
- The company also completed the acquisition of MyRepublic Broadband, consolidating market share in broadband and leveraging unique assets such as sports content rights.
Segment Highlights
- Consumer: Mobile revenue declined by 5.4% YoY, while Broadband grew 4.4% YoY. Entertainment revenue dropped by 9.1% YoY. StarHub retained its strong #2 position in mobile and #1 in broadband, though price competition remains aggressive.
- Enterprise: Regional Enterprise revenue increased 6.8% YoY, with Managed Services up 12.8%. Cybersecurity Services revenue surged 20.1% YoY, reflecting strong demand and project completions.
Strategic Transformation and Cost Optimisation
- StarHub completed its DARE+ transformation investments in 1H2025, shifting from a “build-and-invest” phase to a “harvest” phase focused on cost-efficient operations, simplification, and automation.
- Key initiatives for cost reduction include legacy decommissioning, network automation, systems re-architecture, and business simplification, positioning the company for scalable growth.
Outlook and Guidance
- StarHub expects service revenue to remain resilient, with continued growth in Enterprise Managed Services and ICT segments.
- EBITDA is expected to stay stable year-on-year, as cost optimisation efforts begin to bear fruit.
- Capex for FY2025 (excluding spectrum) is guided at 9-11% of total revenue, with transformation investments largely complete.
- The full-year dividend target remains at the higher of 6.0 cents per share or 80% of adjusted net profit, reaffirming the company’s commitment to shareholder returns.
Events & Corporate Actions
- No mention of legal disputes, natural disasters, or significant macroeconomic events directly impacting the business.
- Refinancing activities secured at attractive rates to support spectrum payments and ongoing operations.
Conclusion and Recommendation
Overall Assessment: StarHub’s 1H2025 results reflect a period of transformation and consolidation. While top-line growth remains steady, profitability has come under pressure from increased competition, exceptional costs, and higher operating expenses. The company’s clear focus on cost optimisation, digital transformation, and regional Enterprise growth gives it a foundation for future improvement.
If You Currently Hold StarHub Stock: The outlook appears neutral to slightly positive for long-term holders. The company’s proactive cost reduction strategy, strong market positions, and continued dividend commitment provide support. However, monitor execution risks around transformation and competitive intensity in core markets.
If You Do Not Currently Hold StarHub Stock: Consider waiting for evidence that cost optimisation efforts are translating into improved profitability and cash flow. While the dividend yield and strong balance sheet are attractive, the near-term headwinds in consumer segments and execution risks suggest a cautious approach for new investors.
Disclaimer: This analysis is based strictly on information disclosed in the 1H2025 StarHub financial report. It does not constitute investment advice. Please conduct your own due diligence or consult a professional advisor before making investment decisions.
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