FY2008 results. StarHub reported FY2008 operating revenue of S$2,127.6m (+5.7% yoy) and net profit of S$311.3m (-5.8% yoy). It also declared a final dividend of S$0.045 per ordinary share, bringing the total dividend for FY2008 to S$0.18 (+12.5% yoy) per share. This was higher than the total dividend of S$0.16 last year. Net profit dropped because of higher acquisition and retention costs. This was a result of mobile phone numbers becoming portable on 13 June 2008. In addition, tax expenses were higher in FY2008 because there was credit adjustment for deferred tax assets and tax adjustment for revision in corporate tax rate in FY2007.

Performances of the various business units. StarHub reported strong growth in most of its business units: mobile revenue was S$1,079.0m (+4.0% yoy), Pay TV revenue was S$398.2m (+16.5% yoy), broadband revenue was S$253.2m (+2.5% yoy) and fixed network service revenue was S$299.9m (+7.1% yoy). This was because StarHub was successful in attracting new customers to its services. As at 31 December 2008, the number of customers for its mobile, Pay TV and broadband businesses were 1,765,000, 524,000 and 373,000 respectively. Pay TV outperformed as there was higher take-up of premium channel and strong growth in the subscriber base.

However, sale of equipment fell to S$97.3m (-9.8% yoy). We felt that this could be due to consumers turning more cautious in their purchases during the economic slowdown. Profit margin. Net profit margin increased from 15.2% in 3Q FY2008 to 16.3% in 4Q FY2008 mainly due to higher mobile, Pay TV and broadband revenue. Based on a year-on-year comparison, it fell from 16.4% in FY2007 to 14.6% in FY2008 because of higher cost of services and operating expenses.