StarHub Ltd
SGX:CC3
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StarHub Ltd
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Our CEO, Peter K; CFO, Dennis Chia; our Chief of CBG Johan Buse; and our acting chief of [ CBG Arthur Frank ].
Before we begin our presentation, I would like to remind all participants that we will conduct a Q&A session at the end of the presentation. [Operator Instructions] Now with that, let's welcome Peter to share this quarter's highlights from the set of results. Peter, please?
Thank you, Veronica, and a very good evening, ladies and gentlemen, and thank you for the interest in our company's results.
Allow me to give you some headline messages and our CFO, Dennis will go through the detailed numbers with you and we welcome your questions.
Quarter 2, year-on-year is characterized by strong revenue growth in the Enterprise Business including cybersecurity, and steady and good growth in the total number of mobile customers, especially mobile, post-paid mobile, and of course it's also characterized by ongoing and intensified competition in the consumer market, which is impacting the NPAT.
Specifically, we've seen the Enterprise market growing at 14.3%, our enterprise revenues and cybersecuity year-on-year. At the same time though we've seen our mobile revenues declining by 7.7% and TV by 18% due to the migration of customers. Also at the same time, we have the highest number of mobile customers in total post and prepaid for the last 5 quarters of 2.267 million.
Basically, the quarter, as I mentioned earlier, we've seen a lot of competitive intensity, with the entry of the new MVNOs, and new brand, of course, including our own all digital mobile brand, giga. Prepaid customer base has been stable compared to quarter 1 this year and the postpaid customers grew by 2.7% between quarter 1 and quarter 2 to the total that I mentioned of 2.267 million customers.
The migration to fiber TV is going as planned and we do expect to conclude the service by the end of September. And of course, our customers have various options in front of them with some great content packages, a promote cost to transfer and potentially, we expect all of them to take up the offer that still want the service. However, the ongoing migration of customers and other options in the marketplace for viewing content is impacting the revenues and we've seen revenue for TV in quarter 2 dropping by 8.5% compared to quarter 1 this year whilst for mobility, despite the more intense competitive pressure, we held revenues flat between quarter 1 this year and quarter 2 this year as well.
Pay TV, the total base is now 374,000 customers. We are reporting a net reduction of 20,000 customers for the quarter. Of course, it's interesting to note that as the TV customers are reducing, we also had the highest number of broadband customers in the last 5 quarters, a total of 509,000 broadband services and 14,000 new customers -- residential customers in the last quarter.
As I mentioned that in the Enterprise segment, certainly cybersecurity is continuing to provide healthy growth and we are still seeing high demand for cloud, for voice and data networking services.
We continue to transform our operations and ensure costs are being minimized and also redirecting cost to fund some new services including digital services and also some of the cybersecurity's products.
As we mentioned earlier, we do have a cost transformation program for $210 million over 3 years and in quarter 3, we will provide you with our very specific details of progress to date but we're on track to deliver those savings over the 3 years.
Finally, again, we're providing guidance for the rest of this year consistent with the guidance we've given you in the first quarter that potentially our revenues will decline by -- between 0% to 2% year-on-year.
We expect also our EBITDA margin to be between 30% to 32% after SFRS 16. And also, we expect our CapEx to be between 11% to 12% and we don't expect to have to make a payment for the spectrum of $282 million this year. So giving you a high-level summary. I'll hand over to Dennis to walk you through the -- some of the details in the pack in front of you. Dennis?
Thanks, Peter. I'll move on to Slide #11 where we reported EBITDA of $146 million for the quarter versus $155 million last year. Bearing in mind that this year, we've implemented the new accounting standard for IFRS 15 -- 16 and without that impact, our EBITDA for the quarter would have been $128 million.
For the half-year, we have generated EBITDA of $308 million, versus $309 million for the corresponding period. Without the IFRS 16 impact the EBITDA generation for the first half would have been $274 million.
On Slide 12, the service EBITDA of $141 million is flat versus $141 million last year and again, that's also the result of the IFRS 16 impact.
And the service EBITDA margin for this quarter is 31.8%.
For the half-year, our service EBITDA margin is 32.8%. Without the IFRS 16 impact, the service EBITDA margin would have been 29%.
Moving on to cost of sales, on Slide number 13, the cost of sales is [ in tandem ] with the various movements in our revenues, traffic cost is down because of the reduction in volumes of data and voice traffic.
Our cost of equipment is also lower because of the lower revenues that we reported in the quarter versus last year, and if you look at the cost of services component despite the increases that we had in Enterprise services as well as the payments for migration to fiber, we've recorded lower content costs as well.
This same trend is also consistent for the first half of 2019.
If you look at our OpEx, our OpEx for the first -- for quarter 2 this year versus last year is more or less -- is actually lower despite having consolidated the results of our cybersecurity acquisition through Ensign. Without the -- those numbers, our operating expenses for the base business is actually much lower, through soft cost management, operating leases and reductions and repairs and maintenance as part of the cost containment and management program that Peter alluded to.
The costs -- operating expenses for the first half is slightly higher and again on a BAU, on a business as usual basis, is -- we are containing the costs for the first half as well.
For net profit, we generated net profit $39 million for the quarter of $0.22 on an EPS basis versus $63 million last year.
We've generated net profit of [ $89 ] million for the first half or $0.56 for the first half.
And finally, on the free cash flow. Our free cash flow for the quarter was $55 million or $0.31 on a FTF fully diluted basis and for the first half it's $0.44. Our net debt-to-EBITDA ratio stands at 1.64x as at the end of Q2.
With that, I hand it over back to Veronica.
And just to add to this point because we do have a migration and we're also funding the growth of our cybersecurity business and we are consolidating various losses and in our announcement, which we have included in our press release, if we normalize the results for the migration, which is one-off cost, we would've reported for the first half an NPAT of $108 million compared to the $120 million, so again -- that we reported a year ago. So again, we have a number of one-offs that are impacting us in this particular quarter.
Having said that, Veronica, over to you.
Thank you, Peter. We are going to open the floor for Q&A now.
[Operator Instructions] Let's welcome our first caller Luis Hilado from Maybank Kim Eng.
I had three questions. The first was you've maintained the service revenue guidance of stable to minus 2% decline year-on-year. The first half, it was down 3%, which segments should we expect in the second half to drive the recovery in terms of the revenue growth? Second question is, I've noticed that for the second quarter, good number of postpaid subscriber net adds but ARPU was also up. Could you give some color on what's driving an increase in ARPU despite going to postpaid base? And last question is, if you could give us an update, last quarter, you mentioned there's a major content being recontracted, has that happened? And has that already impacted your costs in this quarter or will that happen in the second half?
Louis, thank you for your questions. I'll take them and my policy team may help me with some of the answers. First of all, we are maintaining the guidance at 0% to 2% despite being 3% below at this point in time. Our business has 2 engines for generating value and growth. One is our core business, which includes mobility, TV, broadband up to core connectivity and the second engine for growth of course is the cybersecurity business Ensign and D'Crypt. We expect a lot of the growth towards year-end to come from the Ensign and D'Crypt side of the business and that will complement some of the lower revenue growth from the other business. So predominantly will come from -- as I mentioned D'Crypt and Ensign. In terms of net adds and ARPU, yes, we've managed this quarter to do both. What we're saying of course is our new brand giga is adding a number of new customers with healthy ARPUs $25 per connection per SIM card. We're also seeing our MVNOs on our network also growing the customer base in terms of both net adds and also ARPUs. So it's the combination of both, new customers with decent ARPUs that are basically giving us $1 sort of difference between -- in ARPUs between quarter 1 and quarter 2. In terms of contracts for content management, we're still negotiating 1 final contract by the end of September, those negotiations will be over -- again, we will comment when the negotiations are over. I think it's only fair and professional not to comment in between. But the point I want to make is we're still committed to doing two things with content, first of all having the lowest possible content but on top of that having a variable content model where we pay per customer for content rather than a fixed cost for content, irrespective of the customers. Thank you, Louis.
Thanks, Peter. I guess one follow-up question. How would the situation now -- since the ARPUs are better, are the subscribers that are exceeding their data limit this quarter better versus last quarter a year ago?
Look, we have introduced our last year campaign, to add a little bit of color to it. We've removed -- we simplified, we started last December with the Hello Change marketing campaign to bring simplicity, to bring value back to customers. So we removed a lot of what we used to call, our customers used to refer to, toxic revenues from unknown usage charges. So if you can see the last 3 quarters, the total revenue from our billed is stable for us. So customers now pay a fixed fee when they want to go above the normal monthly subscription. Johan, I'm not sure if you want to add anything.
No, maybe to add Luis from my side, building on what Peter said, the ARPU actually the [ Max's ] revenues are obviously coming down at this point in time and they're actually substituted with the reoccurring revenue. So there is a good split in terms of the tariff plan mix. The other thing maybe to add to ARPU composition for this quarter is obviously roaming. So that also helps us this quarter.
Next on the line we have Rama Maruvada from Daiwa.
I have a couple of questions, please. Firstly, with regards to your network solutions business. Could you talk through what has driven the quarter-on-quarter decline in the revenue, in particular any price pressures that you are seeing in the domestic lease line market, that will be the first one. The second one is with regards to your Pay TV and Broadband revenues. I would like to understand in terms of your discount strategy, how long would the discounts impact revenue generation, is it going to be over the next 2 years? Or is it going to be a shorter duration? And along with it, if you could comment on the customer numbers, so Pay TV, is the migration complete or are we expecting another bunch of customers coming off come September? And for broadband, could you disclose how many fiber broadband customers you have in the subscriber base?
Rama, thank you. Three very good questions, let us try and answer the first one about network solutions revenue coming down. What we see in the Enterprise market is predominantly when contracts are coming up for renewal, it's a fairly competitive process and there's price erosion. Corporate customers have an expectation because of how much they spend with companies like us and our competitors to get better value. And typically, they will recontract and either pay the same price but get more bandwidth, more services, or they will go for a straight discount. So we've seen a number of contracts being renewed at a lower price point and that's contributing quite a bit of the revenue decline this particular quarter. Your second question about Pay TV and Broadband and the impact on revenue generation. First of all, the migration is not complete. It will be completed by the end of September and as we've said publicly, we had some very competitive offers and of course, as part of the regulatory commitment, the customer migration was at 0 cost to the customer. So we're seeing the impact of those one-off costs to migrate and we're seeing the impact of very good value, even aggressive offers for the customers to take advantage and migrate. A lot of the customers who are migrating are under 2-year contracts.
All of them.
All of them, so you'll see that revenue for the customers migrating remaining flat for 2 years on a per customer basis. Your third question related to whether we split up the Broadband numbers into fiber and into cable? All I can tell you is we don't, but the number of cable Broadband customers left is very, very few and again by the end of September, we will have migrated all the customers who wish to, on fiber. But there are very, very low numbers compared to the total number of broadband customers we have.
Understood. And if I can just follow up on the network solutions. I mean your competitor made a similar comment some time ago. So my question here is the lower price point or the discounts that you're giving for the network solutions, how long would this weigh? Is it a short term, a few quarter effect or is this through the contract?
Look, typically contracts with corporates are 2 years, some of them are 3 years, the majority is more than 1 year. And we are, as I said, depends on the company itself. We're seeing sometimes very aggressive price erosion on contract renewal. And again, I don't think it's systematic but we've seen last quarter even one auction where a customer has their sort of major suppliers trying to get the best price. Now unfortunately in that particular case, it was really very, very simple, connectivity, it was almost commodity. But so there is price pressure. Of course, how do we mitigate against that? We're trying to win a bigger share of corporates revenues, definitely, we have mobile business and fixed business with the majority of corporates in Singapore. So our strategy is more of share of wallet. If we are under pressure for some of the services we'll provide today how can we capture a bigger share of the corporates wallet? I think at the end of every contract, what we've seen in the past is customers used to take more bandwidth, more gigabytes, more minutes for the same price because they were growing. We've seen couple of customers now not exhibiting that growth in traffic and basically taking more of a discount. We'll wait and see for the next few quarters to see if this is repetitive. We believe it's not yet. There's still a lot of growth in data services, in cloud services, in fixed and wireless network solutions and unified communications for corporates. So we believe that it's probably an aberration for this year, managed services is not growing as fast and we expected. Some of the contracts are not available in the marketplace, especially from the government sector. So we'd like to think it's more of a sort of one- or two-quarter impact rather than a long-term impact on network services.
And next on the line, we have Sachin Mittal from DBS.
My question is on cybersecurity. In this quarter, we saw a loss of less than $1 million in cybersecurity versus a $12 million loss in the previous quarter. So the question is what changed so fast in 1 quarter? And are we at a level where cybersecurity will not make huge losses? Can you throw some light here, because the movement was a bit too sharp from 1Q to 2Q. Second question is on the migration. Have we seen the bulk of the fiber migration in the first half? And are you on track to complete everything by September 2019? And last question is on the cost savings. You had a significant cost-saving program. Are there some items or some cost savings initiatives which you have not undertaken yet, and they show up well in subsequent quarters, or most of the initiatives are already captured in this set of results which we are seeing now?
Sachin, I'll take the question on the bulk migration and then the questions about the cybersecurity losses and the cost program I'll ask Dennis, our CFO to answer. First of all, we are on track for the bulk migration of TV customers. And as I mentioned earlier, we're working through right now to bring the service to an end by the end of September. We're in touch with every customer to make sure that we're clear whether they want or they do not want the service and we're working towards really turning the lights off by the 30th of September. There may be a handful of customers that we're working very closely with NLT, because the infrastructure from the street to the premises may need some upgrading, but we expect there will be a few hundreds left and those are very special case. We call that sort of choking conduit cases that we'll be working through, but the service for all the customers except those very few cases will be turned off and the majority of cost for the migration will be taken up by the end of quarter 3 and we don't expect any other costs for the migration in quarter 4. The cybersecurity losses and initiatives, Dennis if you want to take those two questions?
Sure. Thanks, Peter. Hello Sachin, this is Dennis. On your question on the cybersecurity, in the March quarter, which is our Q1 and which was Ensign's final quarter in FY '19, there were a number of one-off costs, primarily from the post-merger integration of -- following the formation of the entity. There were a number of setup costs in respect of the ERP implementation and the setup of the offices and so forth. All those were recorded in the March quarter, those costs are one-off costs, which did not repeat themselves in the June quarter. On your second question, or your last question on cost savings, we have a number of initiatives that we've already rolled out, primarily the cost management around headcounts that we did in October last year, which, the impact of which, or the savings which were recorded this year. We have a bunch of other transformation initiatives around our digital transformation, our retail transformation, our IT systems transformation that have not yet been baked into these numbers. That's all part of the $210 million transformation savings that we have announced and guided the market to over 3 years. Those will be realized in the subsequent quarters following this year. So those numbers have not been baked into the run rate here.
Okay. Just a follow-up on cybersecurity. So you think we have reached a breakeven kind of level for cybersecurity?
If I can take that question, Sachin. First of all, the cybersecurity business is growing very, very fast. What fuels that growth in terms of, of course opportunities, the cybersecurity compliance here in Singapore is providing more opportunities, but it's also growing in some of the regional overseas markets they operate. The biggest cost to deliver a cybersecurity solution is the people side. So it's all OpEx driven. A little bit of CapEx for SOX and so on. So we believe at this point in time that the losses that we recorded in the past were really one-off. We still expect a breakeven or smaller credit contribution, but we don't expect losses of this magnitude for the rest of the year.
Next, we have on the line Prem Jearajasingam from Macquarie.
A few questions from me, please. Carrying on from the Enterprise questions. Could I just check on what percentage of the customers who are recontracting in the first half have you been able to retain with these lower prices? And what is the risk of this ratio changing materially, given the competitive pressures out there? That's one. Number two, I don't -- I believe -- I don't think you give specific numbers for this, but could you just help us understand, because you've had the sharp drop in revenues for Pay TV. I do appreciate the migration cost is in there but excluding the migration cost, would you say that the Pay TV business has become more profitable, at least less negative, in its margins thus far? And finally, just as a matter of housekeeping, could you remind me what the IFRS 16 impact was on the bottom line, please?
Okay. Let me answer the first 2 questions, and the IFRS, the expert in the thing is Dennis. First of all, we don't provide the details of Enterprise customers under contract and which customers are coming up for recontracting. The good news for us is if you look at the total Enterprise market, we have a small share of the market compared to the largest competitor. So the market potential is out there for us but depending on the anniversary of contracts, sometimes in one quarter you may have a few more customers than other quarters. [ Our call is fair ] to be on enterprise is to deliver both networking solutions and ICT solutions. In addition to the cybersecurity, we believe the opportunities in the addressable market is quite large for us and that's where we are putting the emphasis, but customer by customer, percentage of customers due for contract renewal, that level of detail we do not provide but it's also fair to say with some of the large customers, they're leveraging their spending, but with any supplier. I mean they have tremendous procurement teams, corporates these days are making very sophisticated purchasing decisions on quality, on price, on functionality for the future. So in a sort of tough economic environment, it's to be expected, especially the procurement departments of corporate customers, to be a bit tougher. On the other hand, the -- when there is a tough economic environment, typically, the underdog, the better value company has an opportunity to win more of the business. So we don't believe it's a trend that will continue in perpetuity and we'll see how the business and the opportunities come up in quarter 2 and 3 and 4 in terms of recontracting. Pay TV, as I mentioned again we don't give out margins but what we've been doing with Pay TV is renegotiating and bringing the cost of content down as far as we can and making it variable because we're also seeing customers changing their viewing habits. They are purchasing broadband access and they certainly don't go home at night and after they've switched off content from 1 supplier, they watch a blank screen. So we believe they're obtaining content from other suppliers and the good news for us is as I mentioned we grew our broadband connections to the homes by 16,000 net this month -- this quarter, I beg your pardon, despite the drop of TV viewership. Fees and margins are improving, it's an ongoing I think challenge with the content business because we need to stabilize, every provider out there has to stabilize their customer base. We believe the new content packages are attractive. We've offered lower pricing points. So we will continue to move the content cost down but margins are improving, but I don't believe if we don't see the revenue stabilizing as well, eventually, that has an impact on the margins. But all I can tell you from a year ago, the margins are a little bit better. IFRS 16, Dennis?
So in terms of the IFRS 16 impact, the operating leases, which have now been capitalized as right of use assets in the balance sheet are now amortized and therefore in terms of the numbers that used to be recorded in operating leases under OpEx, above the EBITDA line, it's now reclassified to depreciation, amortization below the EBITDA line and interest also below the EBITDA line. The impact to the bottom line is squared off. So it's just a reclassification between operating leases and depreciation and amortization and interest. So there is no -- and in fact, no material impact to the NPAT number.
We are now going to go back to Luis from Maybank Kim Eng.
Just one follow-up question for me. On the potential migration cost for the second half, could you give us any guidance of what the maximum number could be? And where is the cost reflected, is it cost of services? Equipment costs?
We will not give you direct figure, but I think again, we mentioned earlier that basically if we excluded the cybersecurity losses and the cable migration costs, our profits in the first half of this year would have been $108 million for quarter 1 and quarter 2, compared to $120 million back in the same half of 2018. So again, that will give you guidance in terms of the impact of the cost. You can see the cost in terms of the $12 million coming from the cybersecurity so you can deduce the cost impact on a P&L from the migration.
Should it be a lower number than the second half, do you think, or it's pretty much the same?
It is -- look, the second half, yes because we had 1 quarter, basically, in the 3 months to go, there's fewer customers left than the total customers who migrated in the first half. So yes, the cost of migration impacting our second half results will be lower than the first.
Next on the line, we have Varun Ahuja from Crédit Suisse.
My question on the cost have been asked. I just want -- couple of more questions from my side. On mobile, do you think there is still scope for more mobile competition, given the [ third ] operators likely to launch services over the next few months or so? So wanted to hear, because post March, there have been lot more new aggressive plans which have come into the market, largely SIM Only, so how does the management feel about the thing? And secondly, on the Enterprise side, as discussed earlier also, one of the competitors was seeing pricing pressure. So who -- is it mostly the IT Services guys? Who are kind of coming in and kind of offering lower discounts? Or is it like global satellite cable provider who is coming in and offering up more discount? Besides you and Singtel in the market, is there anyone in the market? Just wanted to hear who all are participating in this market.
Thank you, Varun. First of all, is there scope for more mobile competition, we don't think there is, but obviously the owners of other companies believe so and they keep entering the market, because we've seen some new MVNOs and from what we understand, potentially there's some more MVNOs to enter the market in the second half. The markets again, if you look at all the free offers from some of the new entrants, some of them have a free offer for a year, others have the first month is free. All these new entrants unfortunately using this pricing strategy of a freebie for at least a month if not a year. That's taking away revenue from the mobile pie, in addition to the simplification of charges, removal of extra charges. So the overall pie, we believe is being -- is shrinking from mobility and the more companies that are coming in, they're slicing up mobility into even smaller chunks. So we don't think there is -- I mean customers have tremendous choice today. Price point, bundled and unbundled packages, whipped cream only or whipped cream and a handset. Different brands, different roaming arrangements, so we think the market is very, very well served, there's at least -- I stopped counting after 12 or 13 -- different brands in the market. So the customer is served well and the marketplace is very competitive but there's still some companies that see an opportunity and they're entering the market. Of course, we can't control who enters the market. We can control how do we compete and offer value, position the brand well, make sure our distribution capabilities are right and use leverage both at bricks and mortar, our retail shops and also the digital platforms that we've developed. So we see competition in mobility continuing for the next few quarters, and then of course fundamentals of marketing say that it is not sustainable, if some of the competitors don't win a big share of the market and they have a certain cost. So we don't think there's scope for more competition. But as I said, every quarter we're proven wrong because more and more new entrants are coming in. The Enterprise price pressures again, in Singapore, we have a lot of different providers of Enterprise solutions. For basic connectivity, it's definitely us and Singtel predominantly, although there are other international organizations, telecommunication companies that buy wholesale capacity from us and provide such to their customers as part of global networks. So there is tremendous choice for multinationals to shop around. And sometimes, we're seeing price pressure where there is a global pricing to a global bank based in New York or based in Europe or somewhere else. And there's global pricing and that might affect the local pricing as well. So we're also seeing systems integrators, ICT companies, global names, Dimension Data and many others, not to mention anybody specifically. So the corporate market is well served both on connectivity and solutions, and often it's bundled by some of the global providers and that might put a little bit of pressure. So both whether it's mobility, whether it's TV, whether it's the Enterprise market, Singapore is served very well today by multiple providers and multiple propositions for customers. And certainly, customer is king or queen, whether it's consumer or whether it's Enterprise right now.
Two follow-ups. So on the MVNO side, I'm sure you must have also been approached by various MVNOs who come to you with certain price plans in your mind. So how do you look at them, as in you think, because as you said second half, there are more MVNOs who are lined up, I'm sure some of them may have approached you. So what are they thinking when you see their price point or any business case when you evaluate them? So that's number 1 and number 2, Enterprise are supposed to be if I remember 12 months back, was supposed to be a more stable business. Seems to us right now given what we're seeing the two big telecom operators in here, that the competition is also catching up here. So how should we think about this business in the next 12 to 18 months?
First question on the MVNO, we don't evaluate the MVNO business case. I think that's for the owners of those MVNOs to assess what is best for them. As far as we are concerned, we have wholesale pricing, we're stable in our wholesale pricing. We don't believe that it's rational to offer prices that do not cover our costs and a certain return on the cost of funds per gigabyte, for example, or per minute. So we have a very rational pricing policy and basically, it's the same pricing policy. Of course, we don't discriminate for any of the MVNOs on our network and we hope our competitors are very rational in their pricing strategy for MVNOs as well. I think the business case for its MVNO may vary and as I said I really can't comment about that. In terms of stability in the enterprise market, again, I don't think anymore you can think of the Enterprise market as connectivity only, because again, a lot of products and services to the Enterprise market is connectivity is offered, almost bundled and offered as a service as part of cybersecurity, connection to the cloud. So again, we see the Enterprise market not sort of as split product by product, but in terms of bundling. So when we think of Enterprise, we might have spun off a separate company but we believe cybersecurity is a critical part of an Enterprise portfolio of products and services, so connectivity may be bundled and service later added on top. So yes, some specific products may be under a little bit more pressure in terms of commodity pricing but the overall tie from enterprise continues to grow, because it involves a portfolio of products and services. So we're not looking at specifically 1 or 2 products, we're looking at the portfolio overall and that will continue to grow. And we believe for the next few quarters, that will be the case.
Next on the line, we have Arthur Pineda from Citi.
Just one question. To clarify the $120 million versus the $108 million profit that you were citing a while ago. Just to clarify, this is fiber migration as well as fiber cost as you had mentioned. On the cybersecurity side, is there any specific one-off item that you're actually booking, or is this business as usual losses that, given that you're still building scale?
I'll ask Dennis to comment on this. Dennis?
Okay. So the one-off costs that we recorded in our March quarter were the setup cost that I mentioned, so these are one-off costs. These are not recurring costs and therefore, we don't expect these to repeat in the subsequent quarters. And therefore to Peter's guidance, to the market, that we expect the cybersecurity business to generate some level of profitability in our second half.
I think we've come to the end of this session. Ladies and gentlemen, a transcript of this call will be posted onto our website soon and if you have any more questions, please feel free to contact either Eric or myself. On behalf of the StarHub management team, we would like to thank all of you for joining us. Have a good evening. Thank you.
Good night. Thank you.