nbn co faces EBITDA loss of $866 million for 2016 first half results

nbn co faces EBITDA loss of $866 million for 2016 first half results

Attributes losses to an increase in expenses

nbn CEO, Bill Morrow

nbn CEO, Bill Morrow

nbn co has released the financial results for its first half 2016, ending December 31, 2015. The company reported an EBITDA loss of $688 million, from $497 million the same time last year.

The total revenue earned in the half was $164 million, an increase of 152 per cent, as compared to the prior corresponding period (six months to 31 December 2014), with an Average Revenue per User (ARPU) of $43 per month.

nbn CEO, Bill Morrow, said the result solidifies 2015 as a year where the company met or exceeded every target the board set for the company, and is a clear signal it will reach its fiscal year goals.

“We have met or exceeded the targets established by the board of directors and encouragingly, we are seeing continued acceleration across the business. We see the company’s purpose as one that connects the country to fast, affordable broadband, and in turn, closes the digital divide.

“To do this, we are building a broadband network that extends to every home and business as soon as possible, and at the least possible cost. Of equal importance is the work that we’re doing to enable a competitive retail landscape where service providers have low barriers to entry,” he said.

nbn chief financial officer, Stephen Rue, said the company’s CAPEX spend has increased, but within plan, at $11 billion. Rue said the company’s technology rollout is increasing exponentially, with nearly 1.7 million premises ready for service at the end of December.

“This represents double the number of premises ready for service as compared to the same time one year ago. The continued expansion of the network rollout has resulted in a $2.1 billion CAPEX spend in the first half of the year.

“It continues to reflect investment in the network, and primarily relates to the design and build of FTTP, FTTN, and Hybrid Fibre Co-axial (HSC) networks, as well as the investment in IT systems to help businesses and our customers,” he said.

During the first half of fiscal 2016, nbn received a total of $3.2 billion in equity from the Commonwealth Government, taking the total equity fund to date to $16.4 billion out of an aggregate government commitment of $29.5 billion.

Rue said the performance across the company was complemented by a number of milestones in the multi-technology mix, including the commercial launch of the FTTN product.

More than 120,000 premises are now ready-for-service (RFS), with demand strong in initial launch areas such as Bundaberg, QLD and Belmont, NSW. More than 600,000 premises are currently under construction and a further 1,289,000 in design and preparation, with the company on track to meet the full year RFS footprint target of 500,000 FTTN premises.

In addition, 34,000 premises are being added to the footprint in January 2016, at a rate of 8,000 per week (12-week rolling average).

Rue mentioned the first of two dedicated nbn satellites, Sky Muster, was launched on October 1, with in-flight and on-ground testing advancing ahead of the planned launch of commercial services in the coming months.

nbn also entered into an MoU with Telstra, whereby a way forward is being negotiated for the design and construction management of the nbn HFC footprint currently passed by the existing Telstra HFC network. It is currently in discussions with Optus for a similar MoU.

“We have many challenges in front of us, but our momentum gives us the confidence. We need to ensure we have a suite of products and a level of service that brings the business model to life,” he concluded.

Morrow added that the company aims to have eight million premises connected to the nbn by 2020, and it intends to do so by building a united partnership and building affordable products and services.

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Tags nbn cofinancialNational Broadband Network (NBN)

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