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Macquarie Telecom splashes $32M on data centre despite profit slip

Macquarie Telecom splashes $32M on data centre despite profit slip

But earnings growth continues

Macquarie Telecom's David Tudehope

Macquarie Telecom's David Tudehope

Credit: Macquarie Telecom

Publicly listed Macquarie Telecom has seen net profit slip from $8.3 million to $6.7 million for the first half of the financial year, ending December 31. 

Despite this, it has reported a nine per cent increase in revenue to $131.9 million and earnings before tax (EBITDA) increase of 24 per cent to $31.6 million. 

Macquarie Telecom chairman Peter James said it will continue to focus its investment in data centres, cloud and cyber security to drive more shareholder value and ongoing returns. 

During the first half of FY20, Macquarie Telecom commenced work on Intellicentre 3 East data centre development at the Macquarie Park Data Centre campus, penning the development expenditure to sit between $29 to $32 million during this financial year.

“In January we commenced construction of IC3 East at the Macquarie Park Data Centre Campus to meet the strong demand from corporate and government customers, as well as wholesale customers seeking access to the much sought after Sydney North availability zone,” Macquarie Telecom chief executive David Tudehope said. 

“Our continued investment in data centres, cloud and cyber security has increased Hosting’s share of Group revenue contribution over the last three years from 33 per cent to 46 per cent and EBITDA profit from 51 per cent to 69 per cent.”

The company told shareholders all of its business units experienced growth, particularly highlighting demand in cloud services and from Federal government agencies such as the Australian Tax Office where it secured a three-year deal worth $20 million for cyber security and secure cloud services.

The company’s hosting business saw service revenue increase from $50.4 million in the previous year, to $60 million, and the Telecom business service revenue was also up from $69.2 million in the previous year, to $71.4 million in the first half of FY20. 

In February, Macquarie Cloud Services initiated a strategic agreement with Microsoft to officially launch its Azure practice that will be led by Naran McClung. 

The practice will provide Azure managed services to new and existing customers across Australia and also manage Azure workloads offshore for Australian-headquartered businesses as a tier one Microsoft cloud services provider (CSP).

For the year ahead, Macquarie Telecom is expecting full year FY20 earnings to sit between $63 to $66 million.


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