Starhub FY December 2016

Starhub Key Financial Highlights

The total revenue for Starhub is flat Q-on-Q, net profit after tax decreases from S$81m to S$54m for 4Q16. For the full year, net profit after tax decreased from S$372m to S$341m which is about a reduction of 8%.

Starhub proposed the final dividend of 5 cents per share for FY2016. Starhub intends to reduce quarterly cash dividend of 4 cents per ordinary share for FY 2017.

The staff cost continued to increase by 11.4% from S$66.1m in 2015 to S$73.6 in 2016. This is not good management, an increase in staff cost but it did not lead to increase in revenue. 

Looking at Cashflow Statement is demoralizing, Net Cash from Operating Activities decreases from S$122.6m to S$81m. Free cash flow for 4Q2016 was a deficit of S$45.5m, due to lower cash from operating activities and higher CAPEX payments. For the full year, free cash flow was S$31.7m lower at S$184m as a result of higher CAPEX payments.

Conclusion
We will look at it after further price reduction and with a dividend yield of 9-10% based on reduced dividend forecast.