StarHub's Results For Nine Months Ended September 2004

• EBITDA Grew 55% To S$235.8 million On Broad-based Strength
• Revenue Grew 22% To S$994.1 million
• Free Cash Flow Increased  319% to S$117.6 million

Singapore, 8 November 2004 – StarHub reported that its operating revenue for 3Q increased 21% from the previous corresponding quarter, to S$339.6 million. All lines of business reported growth. For the nine months ended 30 September 2004, its operating revenue at S$994.1 million, increased 22% over the same period last year.

Quarter-on-quarter, the Group’s EBITDA grew 54% to S$92.3 million on the back of higher revenue and improved operating efficiencies.  EBITDA margin, as a percentage of service revenue, grew to 28% compared to 22% a year ago. Year-to-date, the Group’s EBITDA, at S$235.8 million, grew 55% over the same season last year.  In the year-to-date period under review, EBITDA margin as a percentage of service revenue rose to 25%, from 19% previously.

The strong performance resulted in the Group turning in a profit from operations of S$6.9 million in this quarter compared to an operating loss of S$23.0 million in 2003, an improvement of S$29.9 million. Year-to-date, the operating loss is reduced 86% to S$13.6 million when compared to the corresponding period of $98.4 million last year.

As a result, the Group’s net after tax loss for the quarter is near breakeven at S$0.7 million, as compared to a net loss of S$26.8 million a year ago, which is a significant improvement of 97%. 

StarHub’s free cash flow for 3Q was S$81.4 million, an increase of 70% from the previous corresponding quarter. Year-to-date for the first nine months of 2004, free cash flow increased 319% to S$117.6 million, driven by EBITDA growth and decreasing Capex. 

Financial Highlights

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First Nine Months 2004 Financial Highlights

• Revenues were S$994.1 million, 21.8% growth over last year.
• EBITDA improved 55.2% to S$235.8 million from S$151.9 million last year, an increase of S$83.9 million.
• Mobile, Cable TV, Broadband, Fixed Network Services and Sales of Equipment contributed 52.4%, 16.4%, 9.0%, 17.5% and 4.7% respectively to the revenue mix.
• Mobile Service revenue grew 28.2% to S$520.5 million from S$406.0 million, reflecting strong customer growth and high ARPU. Post-paid ARPU increased by S$2 to S$72, while pre-paid ARPU increased by S$1 to S$22. Non-voice services contributed 15.3% of blended ARPU mix.
• Cable TV revenue increased 4.4% to S$163.0 million from S$156.2 million, while Broadband revenue turned in a 34.6% jump to S$89.8 million. Fixed Network Services registered a 10.1% growth to S$173.5 million from S$157.6 million previously.
• Net Loss for the nine months was S$46.3 million, including a one-time deferred tax adjustment of S$15m. This compares with a net loss of S$10.2 million in the first nine months of 2003, which included IDA compensation credit of S$90.2 million. 

First Nine Months 2004 Business Highlights

• StarHub’s Mobile customer base for the nine months totalled 1,084,000 customers, representing 29%share of the total mobile market. This is an increase of 34.5% as compared with 806,000 customers as at September 2003. StarHub captured 79% of the market net additions for the nine-month period. This growth was achieved despite a high mobile market penetration of 89.4% in Singapore.
• Total MMS traffic grew 292.6% to 6.8 million messages while total GPRS traffic grew 149.1% to 1,179 Gbytes.
• StarHub’s Cable TV customer base grew to 399,000 from 371,000 as at September 2003.  ARPU was S$40.
• StarHub’s Residential Broadband customer base grew 46.8% to 199,000 from 135,000 as at September 2003. This represents a market share of 45.3%.  Residential Broadband ARPU was S$54.
• Hubbing – StarHub’s Hubbing strategy to achieve customer and revenue growth continued to build momentum. As at 30 September 2004, StarHub served 666,000 households with at least one StarHub service. The percentage of households which subscribe to two services increased from 27.3% to 30.1%, while the percentage of households which subscribed to three or more services increased from 6.5% to 10.3%.

"StarHub’s continued success at growing its customer base and revenue is due to our tight focus on delivering a quality customer experience, while offering the broadest suite of services.  Clearly, more people are enjoying the convenience and savings that come from taking the full bundle of services from StarHub, including CableTV, Mobile and Broadband,” said Mr Terry Clontz, President and CEO of StarHub.

“We are also pleased with the increased operating efficiencies, resulting in higher EBITDA margin and a substantial bottom line improvement in the 3^rd Quarter.  The strength of StarHub’s cash flow will bring us to a decision in early 2005 regarding our dividend policy,” added Mr Clontz.

For more details on the Group's performance and outlook for FY2004, please visit www.starhub.com/ir.  Materials available at this website include the investor presentation and unaudited results for the third quarter and nine months ended 30 September 2004.

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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.