| Optus EBITDA and profit down |
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| by Stuart Corner | |
| Thursday, 10 November 2005 | |
  
In the results, reported as part of parent SingTel's quarter and half year results, Optus blamed the result on "standing firm in intensely competitive markets and "investing to capture future growth opportunities". Revenue rose marginally to $1.76 billion, while operational EBITDA was down 7.3 percent to $504 million. Net profit after tax declined 8.1 percent to $150 million and free cash flow declined 17 percent to $242 million. All comparisons are with the same quarter last year. Capital expenditure increased to $229 million, mainly due to the 3G mobile network rollout and the planned Unbundled Local Loop (ULL) rollout. CEO, Paul O'Sullivan said: "Intense competition across all our businesses in Australia continues, with retail prices declining more rapidly than traffic expenses. To mitigate this margin pressure, we have taken steps to reduce costs and create savings opportunities. These initiatives include selective outsourcing of our call centre and finance operations, consolidating our IT data centres and reducing the number of management layers. We continue to explore further opportunities for cost savings. Optus Mobile revenue grew by 2.6 percent in the second quarter, made up of service revenue growth of 1.2 percent and equipment revenue of 13 percent. Competition was particularly fierce in the business and wholesale sector where revenue declined by 4.1 percent and EBITDA by 17 percent. Business revenue was stable, but Wholesale revenue declined by 13 percent after "the completion of some one-off low margin transit business." Revenue from managed and professional services increased by 15 percent. Optus is banking on its recent acquisition of Alphawest to boost this part of its business. Optus Consumer & Multimedia revenue was flat for the second quarter with broadband revenue growth of 57 percent offset by declines in traditional fixed products. Optus added 52,000 broadband subscribers for the quarter - taking total customers to 458,000 as at 30 September 2005. |
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