Hosting business continues to see Macquarie Telecom grow

Over the past three years, the telco part of Macquarie Telecom has seen steady revenue but EBITDA fell by 5.6%.

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Image: Macquarie Telecom

The day is getting increasingly closer for when Macquarie Telecom will gain more from sales of its hosting business than its telco arm.

For the full year to June 30, MacTel's hosting business pulled in AU$130 million in revenue, an increase of 17.8% compared to last year, while its telco business posted AU$141 million in revenue, a 0.2% increase.

It was a much different story for earnings before interest, tax, depreciation, and amortisation (EBITDA), where hosting contributed AU$38.5 million, a jump of 19.6%, while the telecom arm went backwards as EBITDA shrank 6% to AU$18.7 million.

Over the past three years, hosting revenue has increased by 16.8% on average, and EBITDA by almost 30%. Across the same period, the telco has seen revenue average a decline of 0.5% and EBITDA drop by 1.9%.

Overall, Macquarie Telecom reported revenue of AU$266 million for the year, representing growth of 8%, while EBITDA increased by 9.7% to AU$57.2 million. This flowed through to AU$21.6 million in pre-tax profit and AU$15.3 million in net profit in pre-AASB16 accounting standard terms.

On the new standard, overall EBITDA increased by AU$8 million due to the exclusion of rent, but increases in depreciation and interest saw the company's net profit come in AU$1.8 million lower at AU$13.5 million.

"The 2020 full year results have delivered six consecutive years of strong performance and EBITDA growth," chair Peter James said.

"These results are evidence of our track record of delivery and investment which will provide a long runway of significant growth opportunities."

Looking forward, the company warned its second half EBITDA in 2021 would be relatively flat compared to its first half, and it intends to spend up to AU$148 million in capital expenditure. Next year, its Macquarie Data Centres business will be reporting as its own segment.

In June, the company announced it would spend an initial AU$17 million to build a new data centre at its Canberra campus. The facility, IC5, will have an initial capacity of 1.5MW and is expected to be completed by December.

Once completed, the full Canberra campus comprising of IC4 and IC5 will have a total capacity of 4MW, with the option to expand further if additional capacity is required.

"The IC5 Bunker development will provide our government customers with additional cybersecurity and cloud capacity. We anticipate strong growth given our experience in delivering to the government sector leveraging our strict security certifications and the breadth of our sovereign service offering," MacTel CEO David Tudehope said on Thursday.

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