Kordia | February 28, 2011 | Press Release
Auckland, New Zealand: – Kordia announced today that its solid underlying trading result for the half year to 31 December 2010 has been impacted by the decision to bring Digital Switch Over (DSO) forward to 2012.
CEO Geoff Hunt says that underlying revenue and profit are both ahead of budget and net debt has reduced a further $20.5m over the last 12 months delivering a net debt position for the Group of $80.6m.
“For the past five years, Kordia has been executing a “broadcast to broadband” transformation strategy to enable the business to survive and prosper beyond the termination of the original core activity of analogue television transmission,” explains Hunt. “The success of this strategy is evidenced by the fact that our revenue has increased by 5.5% to $136.3m for the half year and our Net Profit After Tax (NPAT), before abnormals, increased by 26 per cent from $1.1m to $1.4m for the six months to December 2010 period (compared to the six months to December 2009).
Hunt says that the Kordia Group Board is, as a result of the impact of digital switchover being brought forward, recording an impairment entry of $29.0m (before tax), covering the write-down of assets associated with analogue television transmission, and an increase in the make-good provision relating to sites on which the transmission equipment is located. This entry, a non-cash adjustment, reduces the underlying NPAT from a profit of $1.4m to a loss of $18m.
“The Kordia Networks business is seeing real growth in new products including KorKor (integrated two-way digital radio) and OnKor (Managed Ethernet) in New Zealand,” says Hunt.
“Orcon is trading ahead of budget in both revenue and profit, and is successfully widening its product range into managed services (BIZO) and content distribution networks (Sky Television).
“The Kordia Solutions business in Australia has again delivered a strong result with revenue and profit ahead of budget. Over the last six months, it has delivered a record amount of proposals into the Australian National Broadband Network, the telecommunications sector and the mining sector. Kordia Solutions in Australia is on a very strong growth path.
“In New Zealand, Kordia Solutions is now trading on budget and achieving well in a slowly improving market here and in the Pacific Islands,” says Hunt.
Hunt confirms that Kordia continues to have a sharp focus on providing New Zealanders with more competition in the wholesale international bandwidth market, and delivering for the Group a long term strategic asset.
“Kordia is now well through the “broadcast to broadband” transformation but the decision to go early on the commencement of DSO has impacted the current business plan. We will be focused on accelerating development initiatives that can fill the gap left by early DSO,” Hunt says.
