Out of the loop: Superloop (ASX:SLC) share price drops 11% on half-year results

What did the telecommunications company report today? We have the details.

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Key points

  • The Superloop share price closed almost 11% lower today 
  • The telecommunications company reported a net loss of $21.267 million
  • However, Superloop sees potential for "future growth" 

The Superloop Ltd (ASX: SLC) share price finished deep in the red today after the company reported its half-year results.

Shares in the telecommunications infrastructure company ended the day swapping hands at 96 cents apiece, a 10.7% fall.

Let's take a look at what may have impacted the Superloop share price today.

Superloop share price in the red on half-year results

Highlights from the H1 FY22 results include:

  • Net loss after tax of $21.267 million, 12.7% more than the $18,871 million loss in the previous corresponding period (pcp) of H1 FY21
  • Statutory reported earnings before interest, tax, depreciation and amortisation (EBITDA) of $3.236 million, a 44.2% drop on the pcp
  • Underlying EBITDA of $9.1 million, up 12.2% on pcp
  • Total revenue of $119.8 million, a 125% boost on pcp
  • Gross margin of $39.6 million up 60.8% on pcp
  • No dividends were declared

What else happened in the half?

Superloop also completed the takeover of Australia's largest independent internet service provider, Exetel, in the first half of the financial year. This added 110,000 new consumer and business customers to the result.

This acquisition boosted Superloop consumer revenue by 303% and business revenue by 180%.

Wholesale revenue also surged 12.8% on the back of Superloop launching a new connect platform. This platform is now servicing more than 11,600 customers.

In October, the telecommunications company revealed it had agreed to sell its Hong Kong arm and some Singapore assets for $130 million. The Superloop share price soared on the back of this news.

Management commentary

Commenting on the results, Superloop CEO and managing director Paul Tyler said:

Throughout the first half of this financial year, the Group has achieved some significant strategic milestones, including the completion of the acquisition of Exetel and the announced sale of the Hong Kong business and select Singapore assets.

Fundamentally, Superloop now has a simpler, more focused business, and a greater strategic focus on growth.

What's next?

The company expects to complete the sale of the Hong Kong and select Singapore assets in the first quarter of 2022 (subject to regulatory approvals). This will provide the company with a net cash position of about $50 million. Superloop plans to use this capital to pursue growth opportunities and reduce debt levels.

The company said it is seeing evidence of student accommodation demand for its products returning in January and February.

Superloop believes it is well-positioned for future growth and expects to achieve an underlying EBITDA between $23 and $25 million in FY22.

Superloop share price summary

The Superloop share price has lost more than 6% in the past year, while it is descending around 19% year to date.

In the past week, it has dropped around 8%, while it is down 17% in the past month.

For perspective, the benchmark S&P/ASX 200 Index (ASX: XJO) has returned 5.6% over the past year.

Superloop has a market capitalisation of roughly $464 million based on today's share price.

The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns and has recommended SUPERLOOP FPO. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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