Macquarie Telecom reports 13.8 per cent profit hike

Total revenue dropped 3.1 per cent, however

Macquarie Telecom (ASX: MAQ) has reported net profits after tax of $11.1 million for the six months ended 31 December 2011, a 13.8 per cent hike on the previous corresponding period.

The company’s reported earnings before interest, tax depreciation and amortisation (EBITDA) rose 4 per cent to $21.1 million, up from $20.3 million on the previous corresponding period.

Despite the gains, the company’s total revenue dropped 3.1 per cent from $115.8 million to $112.2 million.

Macquarie Telecom chairman, Robert Kaye, said the results were delivered while absorbing costs associated with the establishment of its Intellicentre 2 data centre and Cloud services.

During the six months ended 31 December 2011, the company invested $8.2 million into the construction, mechanical and electrical needs for Intellicentre 2.

Revenue from the company’s hosting business has experienced a continued growth of 13.4 per cent on the previous corresponding period, contributing $29.6 million of total revenues.

It also recorded EBITDA of $7.7 million in line with the previous corresponding period, including associated costs with Intellicentre 2 and Cloud computing.

The company’s telco business reported an 8 per cent revenue drop from $89.7 million in the previous corresponding period to $82.5 million. This was due to the increased competition in voice, the transition from fixed-line to mobile and data, as well as the poor performance of Vodafone’s network in fiscal 2011.

EBITDA was $16.5 million, an increase of 4.5 per cent on the previous corresponding period as a result of strict cost control and the investment in automation of systems and processes.

Looking forward, Macquarie Telecom chief executive, David Tudehope, said there would be a continued focus on the expansion of the company’s hosting capacity with Intellicentre 2.

“In addition, we will continue to invest in developing our Cloud computing offerings as we believe the emergence of Cloud computing, which is a natural extension of managed hosting, will increase the trend of selective outsourcing of internal information technology and provide new market opportunities for Macquarie Telecom,” Tudehope said in a statement.

“In the remainder of fiscal 2012, we expect to complete the construction of the Intellicentre 2 data centre.

“Phase one will see a further $47.4 million invested into building construction, mechanical and electrical needs.

“Approximately $31.8 million of this investment is expected to be made in the second half of fiscal 2012.”

Macquarie Telecom recently secured News Limited as a tenant for the new data centre, the company has already been a tenant in the Intellicentre 1 data centre in the Sydney CBD for more than five years.

Follow Chloe Herrick on Twitter: @chloe_CW

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