This morning fibre-optic internet business Superloop Ltd (ASX: SLC) reported its financial results for the year ending June 30, 2017. Below is a summary of the results with comparisons to the prior corresponding year.
- Net loss of $1.2m, compared to a loss of $7.2m in prior year
- Revenues up 755% to $59.8m
- $40.6 million of revenue came via acquisition of BigAir Group
- Singapore dark fibre network contributed revenue of $3.9m
- Hong Kong dark fibre network contributed revenue of $1m
- SubPartners acquisition contributed revenue of $2.9m from April 2017
- Invested $52.6m in network property plants and equipment over FY 2017
- EBITDA (operating income) of $4.6 million, up $10.2 million on prior year
- Declared a final dividend of 0.5 cent per share
- Cash on hand of $7.1m as at June 30, 2017
The result is complicated by the fact that Asia-focused Superloop as a dark-fibre startup took the decision to acquire Australia-based wireless internet provider BigAir over the course of the financial year. The BigAir business is now the main driver of revenues and earnings and is carrying the weight of the group's heavy investment in fibre-optic networks in Asia.
The dark-fibre business delivered just $4.9m in revenues across Asia over the year, despite the heavy investments made in fibre-optic loops of cables under high-density urban metropolises such as Hong Kong.
The group also acquired SubPartners over FY17, which is involved in the construction of an internet-services cable named Indigo that is due for completion over 2019.
Surprisingly, the group also decided to declare a dividend of 0.5 cent per share despite making a loss and having cash on hand of just $7.1 million at the end of the period, with $29.7 million in debt.
The company is valued at more than $500 million (around 8.5x total sales), and with just $4.9 million delivered in sales on its Asian fibre-optic networks it will hope to see a better return on investment in the year ahead. As such I'm not a buyer of Superloop shares, as I would prefer TPG Telecom Ltd (ASX: TPM) if I wanted an attractively valued business capable of benefiting from the ever-growing demand for data and internet services.
