Home Telecoms & NBN Vocus revises FY18 earnings down, drops dividend

Vocus revises FY18 earnings down, drops dividend

The Vocus Group has reported $967 million in revenue for the first half of the 2018 financial year, with underlying net profit after tax (NPAT) of $68.6 million.

The NPAT for the first six months of 2018 was down 25.3% on the figure of $91.8 million in the first six months of the previous financial year. Full-year underlying profit is expected to come in between $125 million and $135 million, down from earlier expectations of being between $140 million and $150 million.

The company said the board had decided not to declare an interim dividend for FY18 "in light of the competing demands and opportunities for capital investment across the business, including the ASC project".

vocus overall

It said it was revising downwards its earnings guidance for FY2018, with underlying earnings before interest, taxes, depreciation, and amortisation expected to be in the range of $365 to $380 million as compared to the previously announced figure of $370 to $390 million on revenue in the range of $1.9 to $2 billion; the last figure is unchanged.

Vocus said the revision was mainly due to its Australian Consumer division set to face headwinds in H2 FY18 due to "over hedging of its energy portfolio and a change in its go to market strategy, resulting in a reduction in the amount of subscriber acquisition costs that can be deferred".

horth vertVocus' consumer NBN market share increased to 7.7%, up from 7.3% on the previous corresponding period, with gains slowing in Q2 FY18 as a result of the decision to stop promoting HFC (before the NBN Co decision to pause the rollout) due to customer experience issues.

Group chief executive Geoff Horth (right) said: “Today, we deliver results that demonstrate progress in improving performance for our shareholders.

"We have recorded strong growth in our Enterprise & Wholesale businesses in both Australia and New Zealand, we continue to take share in NBN and UFB and our transformation program is gaining traction across the business.

“The Vocus Australia Singapore Cable project is on track to be ready-for-service in Q1 FY19 and is attracting strong customer interest, and has executed several customer capacity agreements.

vocus 1h18

"Similarly, the divestment of our New Zealand business is progressing in accordance with the planned timeline.

"While facing some short-term earnings headwinds in the Australian Consumer division, the Vocus business has significant growth opportunities available to it and a clear strategy in place to take share in the most attractive market segments; combined with our focus on efficiency and customer experience, the business is well positioned to deliver shareholder returns into the long term."

Vocus has been given the contract for a scoping study on design, construction and procurement of an undersea cable system between the Solomon Islands, Papua New Guinea and Australia, in January, displacing Huawei which was the original company signed to undertake the job.

The company said at the time that the outcome of the scoping study phase was expected to result in the rollout of a cable system on behalf of the Australian Government commencing this year.


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Sam Varghese

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A professional journalist with decades of experience, Sam for nine years used DOS and then Windows, which led him to start experimenting with GNU/Linux in 1998. Since then he has written widely about the use of both free and open source software, and the people behind the code. His personal blog is titled Irregular Expression.