Wholesale network provider, PowerTel, has delivered a mixed report for the year to December 31, 2002.
The company wrote down network assets by $106.9 million but improved its earnings before interest, tax, depreciation and amorisation (EBITDA) loss from $42.8 million in 2001 to just $2.4 million in 2002.
The writedown of network asset value was a reflection of the decline in the telecommunications industry PowerTel’s Chairman, Miller Williams, said.
“The board reviewed assets regularly in keeping with Australian Accounting Standards,” he said. “In view of the substantial decline in values of global telecommunications networks, the PowerTel board took a conservative approach in its latest review of the company’s non-current assets.”
The writedown was based on an assessment of the recoverable value of individual assets as well as a review of the level of future benefits expected to be generated by plant and equipment owned by PowerTel.
“PowerTel will have the advantage of reducing future depreciation, enabling the company to reach after-tax profitability sooner,” Williams said.
Excluding the writedown, PowerTel reduced its net operating loss from $83.3 million in 2001 to $52.8 million in 2002.
PowerTel CEO, Stephen Butler, said that the company had passed a major turning point in June 2002 when it became EBITDA positive.
“Substantial increases in voice and data traffic have lifted network utilisation significantly in 2002 and lifted our market share in voice, data and Internet," Butler said. "This has been helped by strong revenue growth from our strategic alliance with Macquarie Corporate.
“New contracts with corporate, government and service provider customers have continued to increase each quarter. Contracts signed during the year reached an annualised total of more than $39 million, and this momentum has continued with new sales of $3 million of annualised sales per month in the first two months of 2003.”