NetLink's H1 net profit grows 1.5% to S$44.8m

Singapore

FIBRE optic cable owner NetLink NBN Trust reported a net profit of S$44.8 million from April to September, a 1.5 per cent increase from the same period last year.

Tong Yew Heng, chief executive of the trustee-manager, said the Covid-19 pandemic highlighted the importance of fibre broadband as an essential service, especially as more people started working from home.

The company's earnings before interest, taxes, depreciation and amortisation grew by 3.4 per cent to S$139.7 million, mainly due to higher revenue from residential connections and other income arising from government grants.

This comes even as revenue dipped by 2.5 per cent to S$181.5 million, the company said in an exchange filing.

The decrease was attributed to lower installation-related revenue, diversion revenue and ducts and manholes service revenue.

At the same time, total expenses fell by 3.5 per cent to S$140.7 million.

Recurring revenue from residential connections rose by 4.1 per cent to S$118.5 million in the first half of its financial year, contributing to 65.3 per cent of NetLink's total revenue.

For the 12 months to September 2020, the number of residential connections grew by 1.9 per cent to 1,437,360.

Installation-related revenue fell 44.3 per cent to S$6.9 million in H1 due to lower installation charges from fewer installation orders and service activations, compared to the same period last year, when StarHub was migrating its coaxial subscribers, NetLink said. It added that the pandemic has also disrupted installation works.

NetLink said while its capacity to fulfil new service requests has normalised, it remains mindful of the uncertainty brought by Covid-19 and its potential impact on the group.

Even so, it said its business model is resilient and well-supported by predictable revenue streams, which include monthly recurring charges for fibre connections and contracted revenues.

Distribution per unit was 2.53 Singapore cents, up slightly from 2.52 cents in the same period last year.

NetLink units closed at 97.5 Singapore cents on Friday, up 1.5 cents or 1.56 per cent.