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FX Networks posts $4.4mln loss, despite 51% revenue boost

Tuesday 27th September 2011

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Rising finance costs saw FX Networks, the privately-held telecommunications infrastructure company, sink into the red in the year to March 31, even as it boosted sales 51%.

The company made a net loss of $4.4 million for the year, compared to a profit of $355,000 a year earlier, according to financial statements lodged with the Companies Office.

Earnings before interest, tax, depreciation and amortisation rose 52% to $4.7 million as the fibre company lifted sales to $37.3 million from $24.7 million a year earlier.

The bulk of FX Networks’ loss came from finance expenses of $4.8 million, of which $2.3 million in cash was paid on loans, and $2.5 million was paid for finance leases relating to cable sections in the South Island and CISCO equipment in the network.

As at March 31, FX Networks had bank loans of some $7.8 million, and lease debts totalling $24.6 million.

In June, the company received waivers for breaching separate debt-to-equity covenants on its bank loan and finance leases. The company almost tripled construction income, its biggest earner at $13.8 million in the year, , followed by a 76% surge in backbone service revenue to $12.5 million.

ISP service income increased by a quarter to $7.2 million, while installation fee revenue climbed 63% to $3.1 million. Dark fibre sales slumped to $409,000 from $4.8 million a year earlier, while other income dropped to $296,000 from $475,000.

The company owns a backhaul network in the North Island and parts of the South Island and has laid more than 3,000 kilometres of fibre nationwide. Last year, FX Networks was awarded the national connectivity contract for the nation’s research and education network, Kiwi Advanced Research and Education Network (KAREN).

The company missed out on a chunk of government funding to roll out fast broadband to New Zealand’s rural areas after a Telecom Corp. and Vodafone New Zealand joint venture won the $300 million project.

FX Networks planned to team up with state-owned Kordia Group and Woosh Wireless.

Earlier this month, managing director Murray Jurgleit announced he would step down from Oct. 1, keeping his seat at the board and taking on the role of new business director.

General manager of infrastructure David Heald will take over as chief executive.

(BusinessDesk)

BusinessDesk.co.nz



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