Cloud managed services hurts Superloop profit

Cloud managed services hurts Superloop profit

Closes FY19 with $72 million loss

Credit: Dreamstime

Network operator Superloop has closed the 2019 financial year with a $72 million loss as a result of a $50.7 million impairment for the retiring of the cloud managed services.

The publicly-listed company informed shareholders on 1 August it was expecting a 30 per cent decline in its services segment revenue as a result of the performance of the unit.

The cloud managed services unit provided outsourced IT to small and medium enterprises. It has historically contributed to approximately 10 per cent of Superloop's margin but has been declining during the past year.

In February, Superloop posted a decline in the services segment's revenue from $18 million down to $14.1 million for the first half of FY19.

On 1 August, a spokesperson for the company told ARN that since February Superloop had not sold any further cloud managed services to customers and was in the process of transitioning out of that business.

Total revenue for the year ended 30 June was up by 1.43 per cent to $117.3 million. Last year's results showed the company had however closed FY18 with $125.2 million revenue, which differs from its current report that states last year's number to be $118.1 million.

Same applies to earnings, which were down 61.53 per cent from $22 million to $8.5 million. However, last in last year's presentation to shareholders the company reported EBITDA of $29.1 million.

ARN has contacted Superloop for further details on the differences between the 2019 and 2018 financial years.

The Group’s Connectivity operating segment, which includes the Superloop fibre infrastructure and high performance network solution businesses, fixed wireless wholesale and corporate products as well as revenue  associated  with  SubPartners’  undersea  cable  activities,  contributed  revenue  of  $57.7 million.

The Broadband segment, which covers Guest Wi-Fi and Home Broadband (encompassing NuSkope’s retail wireless broadband services, GX2 Technology’s managed Wi-Fi, campus broadband solutions and the fixed line NBN subscriber base acquired  from  SkyMesh  in  June  2018)  contributed  revenue  of  $35.0  million, it told shareholders.

The  Group’s  Services  operating  segment, Superloop+, contributed  revenue  of  $24.7  million.

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