NBN reports nine-month revenue up by over a third but EBITDA loss only closes by 9%
The company responsible for rolling out the National Broadband Network (NBN) across Australia has reported its third-quarter earnings, with the company increasing revenue, closing its EBITDA loss, and reporting a wider EBIT loss.
Over the nine months to the end of March, NBN reported a 38% jump in revenue to AU$2.8 billion, earnings before interest, tax, depreciation, and amortisation (EBITDA) was up 9% from a AU$800 million loss to AU$732 million, while the EBIT loss blew out by 12% from AU$2.7 billion to AU$3 billion.
Comparing nine-month periods, NBN saw residential revenue increase from AU$1.56 billion to AU$2.17 billion, with average revenue per user being bumped up from AU$44 to AU$45. At the same time, business revenue grew from AU$341 million to AU$496 million.
Operating expenses was down 6% or AU$93 million to AU$1.56 billion, however, the company said following accounting recognition changes to its operating leases, it shifted from expenses to a right-of-use asset and lease liability, which was a AU$140 million shift. Depreciation and amortisation for the company increased by 20% to AU$2.2 billion for the nine months to March 30.
At March 30, the company had 4.6 million premises passed by fibre-to-the-node (FttN) technology, 2.46 million on hybrid fibre-coaxial (HFC), 1.9 million via fibre-to-the-premises (FttP), 1.17 million with fibre-to-the-curb (FttC), 589,000 premises get fixed wireless, and 411,000 premises can connect via satellite. In total, the company has 11.16 million premises passed by its network.
In terms of active connections, NBN has 2.97 million FttN customers, 1.58 million HFC customers, 1.4 million premises using FttP, 532,000 on FttC, 307,000 premises connected to fixed wireless towers, and 97,500 on satellite. This gives NBN a total active customer number of 6.89 million to March 31.
Its cost per premises followed a familiar pattern, FttP cost headed slightly down, and everything else rising. The biggest increase was fixed wireless to AU$4,311, which the company pinned on removing 90,000 premises from its guess of how many potential customers were inside its fixed wireless footprint. Otherwise, FttN cost was AU$2,336 per premises, HFC went up AU$250 dollars in a year to AU$2,749, FttC grew by just shy of AU$200 year-on-year to AU$3,288, FttP brownfields was down AU$4 to AU$4,397, and FttP greenfields was down by AU$68 to AU$2,128.
The company now has more than two-thirds of its network on speeds above 50Mbps, with only 32% left on 25Mbps and 12Mbps connections. NBN said that since the start of April, 20% of its new customers have hooked up with 100Mbps plans.
“We remain on track to make 11.5 million premises ready to connect thereby completing the initial rollout by 30 June 2020,” NBN CEO Stephen Rue said.
“Today, NBN is on the cusp of completing the volume build of the national broadband network and on 24 April we reached our 7 million activation milestone, two months ahead of schedule, which is an extraordinary achievement.”
NBN’s targets for the full year are AU$3.7 billion in total revenue, and AU$1.5 billion in EBITDA before payments to Telstra and Optus are made. That number is currently sitting at AU$1.25 billion.
Across the nine months to March 30, the company spent AU$561 million less in capital expenditure to AU$3.73 billion, which consisted of increases in fixed wireless, FttC, and FttP, and falls in spending on other technologies.
Earlier this week, NBN took on a AU$6.1 billion line of credit. This is the first time the company has taken on private debt. Separately, it also has a AU$19.5 billion loan that is to be repaid to the federal government by 30 June 2024 through refinancing.