NetLink's profit up 1% to $78.1m in FY2020

The increase is driven by higher revenue from residential and non-residential connections.

Netlink NBN Trust’s post-tax profit inched up 1% YoY to $78.1m in FY2020 from $77.4m in FY2019, according to an announcement. Meanwhile, its revenue rose 4.7% YoY to $370.2m from $353.6m over the same period.

Unitholders will receive a distribution of 2.53 cents per unit for the six months ended 31 March on 3 June, bringing the total distribution per unit for FY 2020 to 5.05 cents, representing a 3.5% increase from FY 2019.

Its earnings before interest, tax, depreciation, and amortisation (EBITDA) also grew 4.3% YoY to $258.4m in FY 2020 from $247.9m.

This increase was said to be driven by higher revenue from residential connections and non-residential connections, partially offset by lower installation-related revenue, diversion revenue as well as ducts and manhole service revenue.

Residential connections revenue rose 12% to $231.5m in FY2020, contributing 62.5% of NetLink group’s total revenue. As at 31 March, an increase of 7.5% YoY was seen in residential connections with 1,427,445 as compared to 1,327,732 in the previous year.

Non-residential connections revenue also increased by 4.1% YoY to $31.2m as non-residential connections grew to 47,681 over the same period.

Meanwhile, installation-related revenue was $0.9m lower due mainly to lower installation-related revenue from fewer orders requiring installation. Diversion revenue also decreased by $2.4m as it saw fewer completed projects in the financial year.

Ducts and manholes service revenue all fell to $7.1m mainly due to the completion of fewer joint-build projects in FY 2020 and a decrease in service revenue from reduced cable length chargeable to a customer leasing space in NetLink Group’s ducts.

The group noted that despite the higher revenue and fixed asset base in FY2020, total expenses increased by 6.5% or $18.6m to $305.9m attributable to higher operating expenses, depreciation and amortisation, staff and finance costs, partially offset by lower operation and maintenance, installation, and diversion costs.

Other operating expenses were $14.6m higher mainly due to a one-time write-off of capitalised project cost in relation to a discontinued IT system replacement project.

Further, NetLink Group’s net cash from operating activities was higher at $262.5m in FY 2020 as compared to $229.6m a year prior.