KEY POINTS:
Australian internet and phone provider Optus has reported a 36 per cent lift in annual net profit in its latest results, as it continues to invest for future growth.
For the year ended 31 March 2007, net profit was A$804 million ($913 million).
Parent company SingTel said Optus
delivered strong results in a challenging market and successfully defended its scale position in mobile.
Optus chief executive Paul O'Sullivan said the results showed the company was maintaining market share and margin while managing its cost base and investing for growth.
"This year has had major challenges, but we delivered solid results, and unlike our competitors, we successfully avoided value destruction in our major business, Optus Mobile."
Optus met targets set out in its guidance, achieving an operational EBITDA margin of 26.6 per cent.
The company recorded a 3.9 per cent increase in annual operating revenue to A$7.48 ($8.49) billion.
Mr O'Sullivan said the focus on deals and products had paid off, achieving growth despite the increased penetration of capped mobile pricing plans, a continuing decline in fixed telephony usage across the market and the ACCC mandated reduction in mobile termination rates.
"We have spent much of the year investing in state-of-the-art infrastructure including our 3G network, which is now being upgraded with high-speed enabling software, our Unbundled Local Loop (ULL) network, our D-series satellites and our IP Core.
"In addition, we continued to focus on upgrading our customer care systems to enhance our customer experience."
The Optus result comes as the company awaits the decision of legal action brought by Seven Network Ltd and one of its subsidiary companies alleging anti-competitive conduct in relation to subscription television content and infrastructure.
Mr O'Sullivan said Optus Mobile continued to lead in the prepaid mobile market in the fourth quarter, but had lower net additions in postpaid.
Mobile contributed 55 per cent to total revenue and Optus successfully defended its market position by adding 60,000 new mobile subscribers in the quarter.
Also in the fourth quarter, mobile service revenue increased 4.2 per cent and total mobile revenue was up 1.2 per cent to A$1.02 ($1.15) billion.
Despite lower termination rates as mandated by the ACCC in early 2007, operational EBITDA for the fourth quarter increased by 4.4 per cent to A$396 ($449) million.
EBITDA margins grew to 39 per cent with the positive trends of higher usage, increased prepaid revenues and slowing margin erosion from mobile caps in postpaid, the company said.
Optus said it had 445,000 subscribers provisioned with Optus 3G at the end of March 2007.
Three key strategies of growth for Optus Mobile included leveraging scale in the consumer segment, stimulating SMS and other data, as non-SMS data revenue now accounted for 3.6 per cent of service revenue, and growing market share in the business market.
Business mobile subscribers were up ten per cent compared to a year ago.
- AAP
