NetLink logs 12.4% rise in Q1 PAT despite manpower constraints

FIBRE-optic cable owner NetLink NBN Trust posted a 12.4 per cent increase in profit after tax (PAT) to S$23.5 million for Q1 FY2021 ended June, even as its top line shrank amid restricted manpower and access amid the Covid-19 pandemic.

The mainboard-listed trust's Q1 revenue dipped 3.3 per cent to S$89 million, on the back of decreases in activity-based installation and diversion revenues. This was partly cushioned by a S$2.9 million rise in revenue from fibre connections, given a 3.3 per cent increase in residential connections.

NetLink's Q1 installation revenue fell by S$4.7 million, due to fewer orders and service activations than a year ago, when StarHub was migrating its coaxial cable subscribers onto fibre. The firm was also hit by fewer contractor resources and restricted access to homes and buildings amid Covid-19, which affected the completion of installation works.

Meanwhile, diversion revenue fell by S$900,000, as stoppages of construction work nation-wide impacted cable-diversion work, leading to fewer completed and billed projects.

Even so, NetLink's Ebitda (earnings before interest, taxes, depreciation and amortisation) rose by 3.4 per cent to S$68.8 million, due to the recording of government relief grants under other income.

With higher profits and cash received for property tax rebates, NetLink strengthened its net operating cash flows to S$65.1 million, S$8.6 million higher than a year ago.

Covid-19 continues to impact the company, with the reduced availability of contractors' manpower resources having constrained its ability to fulfil service requests from April. Nevertheless, NetLink does not expect the delays in fulfilling requests to have a long-term impact on its revenue.

The company said in a statement: "Despite temporary operational issues resulting from the Covid-19 pandemic, NetLink's resilient business model is well-supported by predictable revenue streams. With a strong balance sheet and liquidity underpinned by stable cash flows and the availability of bank facilities, the group is well-positioned to continue to invest and expand its network's capabilities and resiliency."

NetLink units closed at S$0.97 on Wednesday, up 0.52 per cent, before the results announcement.