Pipe Networks turns in a stellar half year

Stuart Corner
Friday, 02 February 2007 09:55

IT Industry - Deals

When most telcos are complaining about declining margins, dark fibre and internet peering point operator, Pipe Networks (ASX: PWK), has reported a 234 percent increase in profit helped along by increasing margins.

For the half year to 31 December 2006 the company has announced a profit after tax of $2.35 million, a 234 percent increase over the previous corresponding half. Revenue from operating activities grew 151 percent to $11.16 million.

Pipe said the growth was primarily due to the completion of key customer dark fibre contracts and billing of related installation and service provisioning charges. "Profit growth has occurred faster than revenue growth due to strong cost controls and improved margins from greater utilisation rates for core assets."

This result is in line with forecasts and the company says it is well on track to meet full year forecast profit after tax of between $4.7 to $5.0 million.

In the year to 31 December 2006, the company expanded its optical fibre cable networks in capital cities from 171 cable kilometres to 724 cable kilometres.