StarHub Reports Strong Mobile Revenue With Dare+ Costs to Hit 2023; FVE Cut to SGD 1.24

StarHub’s 2022 result had some positive aspects on the revenue front, particularly mobile revenue increasing 7.5% for the full year and 11.1% for the second half. However, heavy spending on Dare+ and IT transformation and some provisions and impairments meant that the company reported net profit of only SGD 1.3 million, or 1% of revenue, in the second half. 2023 guidance is for 8%-10% service revenue growth and service EBITDA margin flat at 20%. Capital expenditure/sales will be 13%-15% including investments. Around SGD 80 million of investments in the Dare+ program (spread across both operating costs and capital expenditure) was spent in 2022 with around SGD 200 million to be spent in 2023 and the remaining SGD 30 million in 2024. The company is therefore banking on a turnaround in profitability and cash flow generation in 2024 and beyond.