Kordia swings to $47m loss as sale of Australian half of its business progresses

Kordia chief executive Shaun Rendell. Photo / Supplied

State-owned Kordia group swung to a $47m net loss for the 12 months to June 30, 2021 from an FY2020 profit of $9.6m.

The result included a $55m write-off associated with costs with the SOE's decision to sell its loss-making business across the Tasman - Kordia Solutions Australia (KSA), which accounts for roughly half its staff and more than half of its revenue.

The proposed sale, to Australia's Ventia (formerly Visionstream) was announced early last month, and has yet to gain regulagtory approval.

Despite owning KSA for the full 2021 financial year, and its sale to Ventia yet to close, Kordia's annual report only lists financials from what it calls its "ongoing business", with only New Zealand numbers (and small rump of transtasman business that will remain once the sale is finalised) included in its numbers.

Kordia reported $123.9m in revenue from "continuing operations" for the year to June 30, up from $119.5m on the same basis last year.

But a management commentary says if reported on a "business as usual basis", revenue would have been recorded as $271m - implying that its Australian telco servicing and network business, which is in the process of being sold, generated $147.1m revenue in the 12 months to June 30.

Kordia's total revenue for 2020 was $223m.

Neither Kordia nor Ventia has disclosed a price for the pending sale of Kordia Solutions Australia, whose business centres on mobile phone networks and corporate networks.

Chief executive Shaun Rendell, Kordia's former CFO who stepped up to lead the company earlier this year after the death of longtime CEO Scott Bartlett from brain cancer, told the Herald last month that the SOE is refocusing on cyber-security.

Across the Tasman, it will continue to offer cyber security and marine services - and its limited accounts in its annual report include a rump $7.7m from those operations in Australia.

Rendell said after a string of acquisitions of security companies, including Aura, Kordia now has more than 100 cyber security specialists.

Kordia began life as TVNZ's spun-off broadcasting infrastructure services arm.

With its former business in analogue TV broadcasting gone, and only a limited role for the SOE in a world of digital broadcasting where more and more channels, and streaming services, are delivered by Chorus and others over fibre, the diversification into cyber security makes sense - although it does bring the state-owned company into direct competition with numerous private firms including the likes of Vodafone NZ, Spark and Datacom in an already crowded, if fast-growing, market.