iiNet chief executive David Buckingham says he’s “furious” about the national broadband network’s slow rollout and delayed renegotiations with Telstra.
The Perth-based internet service provider’s new boss called on NBN Co to finalise the talks and speed up construction. iiNet is one of Australia’s leading providers of NBN broadband services.
“I’m furious about it,” he said. “When [Telstra] can make $7.5 billion in free cash and more profit than the cash flow Vodafone Australia made last year and still get paid $640 million by the Government for NBN things are weird.
“NBN needs to get on with the rollout because we’re sick of waiting. They really need to start unleashing the plan they keep putting in front of us.”
Mr Buckingham was speaking to journalists following the release of iiNet’s financial results. The company reported a 3 per cent increase in net profits to $63 million with its annual revenue hitting a company record of $1 billion.
iiNet performed below analyst expectations for net profit (NPAT). Citi Research forecast the company would hit $1 billion in revenue and $66 million in NPAT while Goldman Sachs predicted net profits would reach $68 million.
But the company’s underlying net profit reached $65.8 million once acquisition and other one-off costs were removed.
The company exceeded its expected subscriber growth levels with 40,000 broadband customers joining the company over the past 12 months thanks largely to the national broadband network. It now has a total of 950,000 customers.
By comparison, Goldman Sachs was expecting iiNet to hit 36,000 net additions during financial year 2014.
Citi Research analyst Justin Diddams described the result as “robust”.
“We believe the market should take comfort in these numbers, highlighting improving underlying operational trends, albeit slightly slower than Citi forecasts,” he said. “iiNet has returned to organic subscriber growth in FY14, delivering four successive quarters of improving trends.”
iiNet will pay a fully franked dividend of 13¢ per share on September 15, 2014.
iiNet last month completed work on its five-year business plan, which picked evolution over revolutionas a path towards revenue growth. It will focus on providing high levels of customer service while riding the NBN rollout to potentially double its user base.
“The most pleasing aspect of these results is our return to organic growth,” Mr Buckingham said. “We now have over 20 per cent share of the NBN market with over 40,000 iiNet customers on the NBN and more than 50% of our NBN customers are new to iiNet.”
