SINGAPORE (Aug 5): NetLink NBN Trust reported 1Q20 earnings ended June of $20.9 million, 10% higher compared to the 1Q19 earnings of $19 million a year ago.
Revenue for 1Q20 came in at $92 million, 6.9% higher than in 1Q19. This was mainly due to higher residential connections and installation-related revenue, partially offset by lower ducts and manholes service and diversion revenue.
Residential connections remained the largest revenue driver, contributing 60.9% of the total revenue. Some 1.38 million residential connections were completed this quarter compared to 1.22 million connections as at June 30 2018.
In tandem with the higher revenue and growth in network assets, total expenses rose 4.5% to $72.9 million this quarter compared to $69.8 million a year ago.
Overall, NetLink EBITDA margin improved 1.5 percentage point to 72.3% in 1Q20 from 70.8% in 1Q19. EBITDA rose 9.1% to $66.5 million this quarter compared to $61.0 million a year ago.
Net cash generated from operating activities stood at $56.5 million for 1Q20, higher than the $46.1 million reported in 1Q19.
No distribution has been declared for the quarter as distributions will be made on a semi-annual basis. Accordingly, the next distribution period will be for the six months ended Sept 30.
In its outlook statement, NetLink expects revenues from key connection services in FY20 to be higher than that of FY19 mainly due to higher residential connections and installation-related revenues. The group says it will continue to invest and expand its network to improve the network’s capability and resiliency. The group also expects capital expenditure in FY20 to be higher than that of FY19.
The group is continuing to expand its network in new housing estates. NetLink has also been working with Requesting Licensees (RLs) who provide fibre services to retail service providers who in turn provide retail fibre services to end-users to meet future demand for non-residential and NBAP (non-building address points) connections, and to support the RLs’ efforts to acquire new non-residential and NBAP customers.
In addition, the group is monitoring the development of the 5G network in Singapore and will explore opportunities associated with the new market development.
Units in Netlink Trust closed 0.5 cent lower at 88 cents on Monday.
