Macquarie Telecom profit plummets 94.8 per cent

Macquarie Telecom profit plummets 94.8 per cent

Company attributes result to investment for future growth

Australian telecommunications and hosting provider, Macquarie Telecom, has reported a 94.8 per cent year-over-year (YoY) profit drop.

The company’s net profit after tax (NPAT) for the half (ended December 31, 2013) amounted to $387,000, a $7 million decrease from the previous corresponding period.

The company’s earnings before interest, tax, depreciation and amortisation (EBITDA) fell $6.2 to $13.3m.

According to a statement to the ASX, EBITDA profit is expected to reach between $14.7m and $16.7m in the second fiscal half, bringing the full-year EBITDA to between $28m and $30m.

Overall revenue fell 5.3 per cent to $99.8m. An interim dividend of $0.12 per share has been declared.

Macquarie Telecom attributes the result to the “planned consequence of recent significant capital expenditure program” which led to increased operating expenses as datacentre facilities went live, increased depreciation and amortisation charges, and reduced interest revenue.

“Macquarie Telecom’s half-year result reflects the impact of the significant investment for future growth in which we expanded our datacentre footprint, growing our presence in Canberra and further developing our Cloud computing capabilities,” chairman Robert Kaye said.

During the half, the company penned a contract with the Department of Treasury, adding to existing wins with the Department of Agriculture, Fisheries and Forestry (DAFF) and Prime Minister and Cabinet (PMC) agency clusters. Macquarie Telecom expects the investments surrounding the contracts to become revenue streams through the rest of fiscal 2014.

Macquarie Telecom’s hosting business revenue contributed $30.2m (30.3 per cent) to total service revenue; EBITDA was $2.8m, a decrease of $4m.

Its telco arm delivered $39.5m in revenue and EBITDA of $13.4m, down $2.4m.

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