​Verizon Australia's profit slumps to AU$5.36m

The local arm of the wireless giant has posted AU$5.36 million in after tax profit, on revenue of AU$161 million for 2016.

Verizon Australia has reported a AU$15.2 million year-on-year drop in after-tax profit to AU$5.36 million in 2016.

Revenue for the 12-month period totalled AU$161 million, a slight decrease on the AU$164 million posted in 2015.

Revenue was comprised of AU$110 million from services, AU$2.4 million from the sale of goods, and AU$48.4 million in revenue from global network support.

Gross profit for the period was AU$114 million, which was down from 2015's AU$120 million total.

The local arm of the wireless giant paid AU$1.33 million in income tax, after receiving a AU$1.29 million benefit a year prior.

In its filing to the Australian Securities and Investments Commission (ASIC), the company said Verizon Australia's principal activities during the year comprised of the provision of national and international telecommunication and IT services in Australia to business and government customers, including sales, marketing, network installations, integration of networks, construction, maintenance, running of networks, professional services, and internet security solutions.

The company is a wholly-owned subsidiary of Verizon Services Singapore Pte Limited, which is an indirect wholly-owned subsidiary of Verizon Communications Inc.

The Australian government legislated a new Diverted Profits Tax (DPT) in March, which is intended to prevent the practice of multinational organisations shifting profits made in Australia offshore to avoid paying tax.

The DPT will hit multinationals with global revenue of more than AU$1 billion and Australian revenue of greater than AU$25 million with a 40 percent tax on all profits.

Slated to commence on July 1, 2017, the new tax is expected to see AU$100 million in revenue per year -- from 2018-19 -- stay on Australian soil.

The new legislation mirrors one implemented in the United Kingdom, nicknamed the Google Tax after the search engine giant was ordered to pay the UK government £130 million in back taxes.

In its first quarter results published last month, Verizon reported $3.6 billion in net income, on revenue of $29.81 billion.

For the 12 months to December, Verizon reported total revenue of $126 billion.

The results followed the announcement made by datacentre giant Equinix in December that it was scooping up 24 of Verizon's datacentres for $3.6 billion.

Verizon is also slated to complete its $4.48 billion acquisition of Yahoo in the second quarter of the year. Once closed, the merger of AOL and Yahoo will result in a new parent company called Oath, with the remaining Yahoo assets to be renamed to Altaba Inc as it begins its new direction as an investment company.

Last week, Verizon announced the establishment of a new Threat Research Advisory Center which is expected to unite all of Verizon's cyber-intelligence capabilities under one roof. It followed the February launch of its Asia-Pacific Advanced Security Operations Centre (SOC) in Canberra, Australia, to complement the other nine SOCs across the world.

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