StarHub - UOB Kay Hian 2025-05-13: 1Q25 Soft Results In Line, Moving On From DARE+

• For 1Q25, StarHub (SGX:CC3) reported lower overall revenue (-0.9% y-o-y) and PATMI (-20.7% y-o-y), forming 22.3% and 21.5% of our full-year forecasts respectively and just in line with our expectations.
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Soft results in line.

• 1Q25 service revenue (+1.1% y-o-y) was slightly higher, driven by strong momentum from the broadband segment and robust growth from the regional enterprise segment. However, 1Q25 service EBITDA (-5.7% y-o-y) was lower y-o-y, dragged by outsourcing and transformation-related costs such as DARE+ investments.

Muted margins.

• StarHub's management noted that the DARE+ programme is set to finish by end-1H25. As a recap, 10% of the remaining DARE+ investments (S$20m-25m) is set to be expensed by end-1H25, which would help to support margins moving forward. However, with the upcoming S$282m spectrum payment set to be paid in full by end-2Q25 along with decommission costs in 4Q25, we expect overall margins to stay muted in 2025.

Mobile: Strong subscriber gains.

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• Due to the ongoing stiff domestic pricing competition, blended mobile ARPU fell to S$21/month in 1Q25 (4Q24: S$22/month, 1Q24: S$23/month).
• Average monthly churn rate increased slightly to 1.2% in 1Q25 (4Q24: 1.0%).

Broadband: Strong demand for higher-bandwidth plans.

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Chong Lee Len UOB Kay Hian Research | Llelleythan Tan Yi Rong UOB Kay Hian Research | https://research.uobkayhian.com/ 2025-05-13

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