Amcom triples half year profit to $2.3m

Stuart Corner
Monday, 26 February 2007 16:26

IT Industry - Deals

Amcom Telecommunications has reported a 200 percent increase in net profit after tax of $2.3m for the six months ending 31 December 2006.

The result was based on a 49 percent increase in sales to $18.9m and includes equity accounted earnings of $1.4m from its 20 percent stake in iiNet and a once off derivative loss after tax of $0.7m resulting from the conversion of the Futuris loan to equity in the company. The $20.4m loan was converted into equity in the company at 17 cents a share and took Futuris stake to 46 percent.

EBITDA from operations increased 36 percent to $4.6m. The fibre division reported sales up 48 percent to $13.8m and EBITDA increasing 18 percent to $5.3m despite what Amcom said were competitive market conditions.

The Amnet division posted its first profit on sales growth of 52 percent to $5.1m recording an EBITDA of $0.5m up from an EBITDA loss of $0.3m in the previous corresponding period.

The Amnet division leverages the company's physical fibre network to provide DSL broadband and voice services to corporate, SME and residential clients over the company owned fibre and DSL networks. The division also provides IT services, including LAN/WAN, data centre and ISP services to larger corporate and government enterprises.

Amcom is upgrading its fibre network infrastructure to DWDM (dense wavelength division multiplexing), a move that it says will enable customers to get download speeds up to 1Gbps. This infrastructure will be rolled out and will become operational at the start of the next financial year.

The fibre division commenced its fibre rollout in 1999 and has since deployed over 1072km of metropolitan networks in Perth, Adelaide and Darwin, accessing over 788 buildings.
 
Amcom had cash reserves of $3.3m at 31 December but has since established a long term bank load of $20m to fund working capital and acquisitions. This is in addition to the equity backed $30m facility provided by Futuris.