Netlink Trust 9-month profit after tax down 5.2%, despite higher revenue

FIBRE network infrastructure owner NetLink NBN Trust reported on Monday (Feb14) lower profit after tax for the 9-month period ended Dec 31, 2021, even as revenue rose slightly.

In a business update, the trustee-manager said revenue for 9M FY22 increased by S$5.3 million or 1.9 per cent on-year to S$281.6 million mainly due to higher residential, non-building address point (NBAP) & segment connections revenue and installation-related revenue, partially offset by lower central office revenue.

While revenue was higher, earnings before interest, taxes, depreciation and amortisation (Ebitda) was down 6.2 per cent on-year to S$196.9 million. Profit after tax for the 9 months also fell to S$65.8 million, down 5.2 per cent from the prior year period.

The decrease in Ebitda was mostly due to a remeasurement loss of S$12.4 million relating to finance lease receivables arising from the reduction in rental rates upon the renewal of the central office lease agreements.

This had been disclosed in the results for the first half, the trustee-manager said, adding that accounting standards require the reduction in rental rate for FY22 and subsequent years to be recognised upfront as the remeasurement loss.

"The reduction in rental rates is not expected to have a material cashflow impact for FY22 or subsequent years."

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As at end-Dec 2021, the trust had net assets of S$2.7 billion, with a cash balance of S$113 million.

Units of Netlink Trust closed at S$0.97 on Monday, down 1 per cent or S$0.01 before the business update.