Sunday, 5 February 2017

StarHub and M1 Financial Results - Part 2

Previously, I posted about the upcoming financial results release by StarHub and M1. They have since both released their full year 2016 results as of this continuation post. 

You can download StarHub FY2016 financial report here and M1 FY2016 financial report here. Overall, the performance for both telcos is nothing to cheer about. There was flat growth in revenue and earnings per share yoy dropped approximately 15% for M1 and 8% for StarHub. In addition, dividend payouts are estimated to be cut in FY2017. M1 will remain its 80% payout ratio on net profit after taxes (if net profit drops further, then dividend will be further reduced) while StarHub guided 0.4c per quarter for FY2017 (20% cut in dividend from FY2016).

With the fourth telco TPG Telcom set to commence operation in mid 2018, StarHub and M1 still have some time to devise strategies to retain their market share or diversify their income streams. Despite the dividend cuts, StarHub and M1 will still pay a dividend of more than 5% based on current market price. Will continue to monitor closely and might add more to these 2 companies if they get too undervalued in 2017.


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