The bottom line increase to $8 million compared to the prior period loss of $1.8 million and the ASX-listed Netcomm (ASX:NTC) says the results reflected a fundamental rebase of revenue and profitability – and delivery of new major contracts for future growth and progress discussions with Tier 1 carriers globally to implement tailored connectivity solutions.
Netcomm also reported an EBITDA of $20.5 million for 2018, up by 5.7%.
In other results for the 2018 full year, Telecommunication Infrastructure Equipment and Industrial Internet of Things revenue was up 81% to $156.5 million and now represents 86% of Group revenue, while the consumer broadband business recovered, with revenue up 18% due to what the company says were initiatives to reinvigorate that business.
“Reflecting the growth in revenue as contracts scaled, earnings and profits grew even faster, with EBITDA up 5.7 times to $20.5 million. Our balance sheet further strengthened during the period given the strong operating cashflow generated, with no debt and cash of $27.3 million.”
Commenting on NetComm’s operational performance, chief executive and managing director Ken Sheridan said: “Over the course of FY18 we generated material revenues in our Telecommunication Infrastructure Equipment and IIoT business.
“We continued to receive and deliver large DPU orders to NBN for its FttC project and importantly our relationship was further strengthened with the agreement to supply Network Connection Devices, providing the in-home link for connectivity.”
Sheridan also pointed to the continued growth in Australia and the US of fixed wireless, with a new client signed in Canada.
“We were pleased to receive initial purchase orders to deliver our third generation, 100Mbps capable fixed wireless devices to Ericsson for the NBN rural broadband project.
“In North America, we commenced fixed wireless device sales to AT&T and signed a contract to deliver devices to a Tier 1 carrier in Canada. These North American contracts are part of a concerted push to see rural households receive fast Internet connections and are expected to be strong contributors to our future growth.
“We have a fantastic use case in Australia with NBN, which is leading the way in implementing the first large-scale reverse powered 4-port DPU, to introduce FttC to 1.5 million premises, while the NCD completes the end-to-end FttC solution.
“Building on our success locally, we see substantial opportunities to implement similar large-scale solutions in Europe, where we have already successfully completed three lab trials, with an in-field trial currently in progress.”
On 5G, Sheridan said: “NetComm has a deep understanding of the complexities involved in implementing large-scale fixed wireless solutions. With strong partnerships established in global markets, we are well placed to benefit from policy trends that are highly supportive of fixed wireless in developed markets, where we aim to be early to market with commercial Fixed Wireless 5G solutions.”
On NetComm’s “strong global position” and outlook for the future, he said: “In an era where governments across the globe have policies and funding in place to implement broadband solutions to reach both urban and rural populations, broadband is increasingly being seen as a utility that needs to work reliably at all times.
“With a full suite of innovative products to solve operators’ connectivity challenges, NetComm has built a substantial customer pipeline with the goal of achieving 10 customers in three continents by 2022.
“Following the substantial step up in scale in FY18, NetComm expects FY19 to be a year of consolidation to ensure a sustainable platform is in place to drive the next step change in growth expected for FY20."