StarHub Reports 2008 Third Quarter & Year-To-Date Results

• YTD Operating Revenue Increased 8% To S$1,591 Million
• YTD EBITDA Dipped 1% To S$479 Million
• YTD EPS Increased 2% To 13.06 Cents Per Share
• Declares 3Q Interim Dividend Of 4.5 Cents Per Share

Singapore, 5 November 2008 – The third quarter of 2008 operating revenue increased 2% to S$525 million from S$513 million year-on-year (YoY). For the year-to-date (YTD), it recorded an 8% growth or S$116 million to S$1,591 million. The Group’s EBITDA for the quarter inched 1% to S$165 million. EBITDA margin as a percentage of service revenue was 32.9%. For the YTD, EBITDA registered S$479 million and EBITDA margin was at 31.6%.

For the quarter, profit from operations was 1% lower YoY at S$107 million. Net profit after tax decreased 2% to S$80 million. Free cash flow (FCF) at S$126 million was 11% higher compared to last year’s S$113 million. YTD, profit from operations was at S$304 million or 4% lower compared to the same period last year. FCF was at S$296 million, 29% lower than last year’s S$416 million.

Capital expenditure (capex) was S$17 million higher at S$60 million compared to S$44 million a year ago. YTD, it was 51% higher at S$165 million.

Financial Highlights

3Q & YTD 2008 Financial & Business Highlights

For the third consecutive quarter this year, Pay TV revenue registered the highest growth - a 15% YoY lift. Broadband revenue grew 1%, while Fixed Network services increased 2%. Mobile revenue slipped 1%. YTD, Pay TV revenue grew 21%, Fixed Network services increased 7%, Mobile revenue recorded 6% growth and Broadband revenue went up by 2%.

YTD, Mobile continues to be the major revenue contributor at 51%. Pay TV, Broadband, Fixed Network Services and Sales of Equipment contributed 19%, 12%, 14% and 5% respectively to the mix.

• Mobile revenue slipped 1% for the quarter. The lower revenue was a result of the decline in active pre-paid customers. However, YTD, revenue rose 6% to S$807 million from S$762 million. Post-paid mobile services revenue was up 4% YoY. On an YTD basis, it also registered a growth of 10% to S$628 million, accounting for 78% of the Mobile revenue mix. Pre-paid mobile services revenue slipped 13%. YTD, it decreased 7% to S$179 million. Post-paid ARPU decreased S$4 to S$74, while pre-paid ARPU contracted S$4 to S$22. YTD, post-paid ARPU was up S$2 to S$76, while pre-paid ARPU dipped S$5 to S$21.
• Pay TV revenue rose 15% for the quarter. YTD, revenue jumped 21% to S$298 million from S$247 million. Driven by the increase in Basic and Sports group subscription prices, and a larger customer base, Pay TV ARPU increased to S$56 YoY. YTD, it went up by S$8 to S$57. The customer base was up 4% to 520,000. The number of customers on the digital platform increased 23% to 473,000 households. Digital customers now make up 91% of the total pay TV customer base.
• Broadband revenue rose 1% YoY. YTD, revenue grew 2% to S$189 million. The MaxOnline customer base grew 8%, ending the quarter with 365,000. ARPU decreased S$3 to S$57 as more new customers signed up to MaxOnline SurfLite (low-end plan) and enjoyed hubbing discounts offered on other MaxOnline plans.
• Fixed Network revenue increased 2% to S$75 million from S$73 million previously. YTD, revenue rose 19% to S$222 million. Data & Internet services revenue, which makes up 82% of the Fixed Network revenue, jumped 16% to S$62 million from S$53 million a year ago. YTD, revenue recorded 19% growth to S$181 million.
• The percentage of total Hubbing households that subscribed to any two or more StarHub services stands at 53%, with 40% subscribing to all three services.

"The third quarter results were well in line with our internal targets. We were able to grow our customer base while delivering a respectable set of financial results in this highly unpredictable operating environment against a slowing economy and volatile financial markets accompanied by variable competitive intensity.  We also continued to invest in new capabilities and services that position the company well for the future, while our cash position and capital structure remain in safe territory," said Mr Terry Clontz, CEO of StarHub.

Outlook for FY2008

Based on the current outlook, barring any unforeseen circumstances and changes in the economic and market conditions, we expect the Group’s 2008 operating revenue growth will be around 7% YoY. Blended EBITDA margin on service revenue is expected to be around 31%, and the 2008 cash capital expenditure is not expected to exceed 12% of operating revenue. We also maintain our commitment to pay a minimum annual cash dividend for FY2008 of 18.0 cents per ordinary share.

For more details on the Group's performance for 3Q2008 and outlook for FY2008, please visit www.starhub.com/ir. Materials available at this website include the audio conference link, investor presentation and unaudited results for the quarter ended 30 September 2008.

“Some of the statements in this news release constitute ‘forward-looking statements’ that do not directly or exclusively relate to historical facts. These forward-looking statements reflect StarHub Ltd’s current intentions, plans, expectations, assumptions and beliefs about future events and are subject to risks, uncertainties and other factors, many of which are outside StarHub Ltd’s control. Important factors that could cause actual results to differ materially from the expectations expressed or implied in the forward-looking statements include known and unknown risks. Because actual results could differ materially from StarHub Ltd’s current intentions, plans, expectations, assumptions and beliefs about the future, you are urged to view all forward-looking statements contained in this news release with caution."