Perth-based ISP, iiNet, has posted $699 million in revenue in its full 2011 financial year partly thanks to its AAPT acquisition. And it is gearing up to launch National Broadband Network (NBN) service plans this month.
The company bought AAPT’s consumer division for $60 million in July 2010.
In the first nine months of the 2011 financial year, AAPT delivered over $150 million revenue and more than $15 million in earnings before interest, taxes, depreciation and amortisation (EBITDA).
iiNet’s overall EBITDA was $105 million, up 30 per cent from the previous corresponding year. Its revenue was up 48 per cent.
Despite AAPT pulling down the overall group margin, iiNet is expecting to reap more rewards from the acquisition in the next financial year.
Another one of its acquisitions, Netspace, also contributed to the results.
Operational cashflow for the company was $96 million, up 54 per cent although it has spent $46 million in capital expenditure which was partly used to grow its own network footprint through new DSLAMS, additional ports and on-net customer migration.
On-Net customers use the iiNet network while off-Net customers are on a third-party wholesale network.
The rest was spent on acquisition-related costs, business unit developments and network maintenance.
iiNet’s net debt sits at $96.3 million compared to $44.7 million from financial year 2010.
In terms of customer base, uptake on services was up by 36 per cent to 1.3 million. iiNet cited this as a great result considering the increasingly competitive telco market.
Churn rates for its DSL services, including ADSL2+ and Naked DSL, was at 1.4 per cent. The numbers represent what portion of customers left iiNet and joined a competitor.
Excluding AAPT, iiNet increased its on-Net broadband subscribers by 51,000 of which 131,000 were Naked DSL users.
Its Off-Net customer base failed to grow significantly due to the lack of a competitive ADSL2+ wholesale offer, according to iiNet.
iiNet, along with some of its competitors, have long complained about Telstra’s dominance in the fixed-line broadband market.
The need to level out the telco playing field was the reason the NBN was launched.
With the NBN, which is due to be available in selected areas by the end of the year, iiNet is set to save $24 per broadband port when compared with off-net port costs. The company currently pays $57 per port for off-Net services and $32 for on-Net.
iiNet will release its pricing for NBN service plans this month. Other ISPs including Internode and Exetel have already revealed their NBN plan pricing lists.
It is not known how much the Federal Court copyright case against iiNet initiated by the Australian Federation Against Copyright Theft (AFACT) has impacted the ISP’s financial year 2011 results.
In 2010, iiNet said the court case had already cost the company $4 million in legal fees.
Despite iiNet winning the initial Federal Court hearing, the case is still ongoing and will be heard in the High Court of Australia later in the year.