Legal costs drag down iiNet's impressive half year results

Stuart Corner
Monday, 22 February 2010 13:47

IT Industry - Listed Tech

iiNet has reported revenues up 11 percent and service numbers up five percent along with 'underlying' EBITDA up 20 percent, and 'underlying' NPAT up 30 percent for the six months to 31 December 2009. Actual results, however were impacted significantly by the costs of defending the copyright case brought against it by movie studios.

When these costs were factored in the NPAT gain was only 6.3 percent and EBITDA gain only eight percent (all figures compared to the half year to 31 December 2009.) The company is maintaining its previous guidance of full-year EBITDA of $75m-$80m (exclusive of copyright case legal costs).

iiNet said that, net of receipts provided by insurance cover it spent $3.8m defending the copyright case, $2.7m post tax. However the court's judgement, unless appealed, will see the movie studios' body AFACT having to pay iiNet's legal fees.

Daniel Blair, an analyst with Southern Cross Equities, said, that subject to an appeal being lodged "We expect IIN to recoup $2-3m of these costs from AFACT."

Revenue was $205.0m, statutory NPAT, $12.1m, statutory EBITDA $33.6m. The company finished the year with almost 800,000 services in operation. It increased the number of naked DSL customers 30 percent to 87,000 and had more than 300,000 customers on its own DSLAMs. As at 31 December 2009 it had sold 16,000 of its BoB integrated CPE devices, launched on 16 August 2009.

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