Netlink Trust posts 47% earnings jump on lower costs

FIBRE network infrastructure provider Netlink NBN Trust on Tuesday posted a 47.1 per cent increase in net profit to S$50 million for its second half ended March 31, 2021, from S$34 million in the previous year.

This came from lower finance costs and other operating expenses - the latter mainly due to lower write-off of capitalised project costs in relation to the discontinuation of a contract with a vendor for the replacement of a business- and operation-support system in February 2020.

Some S$15.4 million had been written off in H2 FY20, versus S$7.4 million written off in H2 FY21, as certain project-related IT assets had been further assessed not to be reusable for the expected future replacement of the business- and operation-support system.

Revenue grew 1.6 per cent to S$187 million, as contractors' resources returned to normal levels in the second half of the year. At the same time, residential, non-building address points (NBAP) and segment connections revenue as well as installation-related revenue also improved.

The trust also reported a 0.8 per cent rise in attributable distributions to S$99.4 million, and a similar 0.8 per cent increase in distribution per unit (DPU) to 2.55 Singapore cents. It will close its books at 5pm on May 25, and pay out its distributions on June 9.

For the full year, it reported a 21.4 per cent increase in net profit to S$94.8 million, due to the lower write-off of capitalised project costs, higher other income arising from government grants, as well as lower operation and maintenance, installation and finance costs.

Full-year revenue dipped 0.5 per cent to S$368.5 million, mainly due to lower revenue from installations, diversions, ducts and manholes services as well as co-locations and others.

Revenue that relied on contractors' resources and requiring access to premises were also affected by Covid-19 related issues such as work stoppages and access restrictions to homes and buildings. This affected the completion of installation works from April to August 2020.

The trust said it expects to maintain its distributions to unitholders.

It is also expanding its network in new housing estates and working proactively with the requesting licensees and retail service providers in their efforts to acquire new non-residential and NBAP customers.

It is looking to improve its presence in major data centres, and to support mobile operators by deploying fibres to support their mobile network infrastructure. It is also exploring opportunities to invest in telecommunication infrastructure businesses overseas.

Its units closed flat at S$0.98.