​MNF attributes AU$4.9m first-half profit to 'organic growth'

The VoIP and cloud telco provider posted AU$4.9 million in after-tax profit for the six months to December 31, 2016.

Australian retail and wholesale voice-over-IP (VoIP) provider MNF has announced its results for the first half of the 2017 financial year, recording net profit after tax (NPAT) of AU$4.9 million, a 21 percent increase compared to the same period last year.

Earnings before interest, tax, depreciation, and amortisation (EBITDA) increased by 22 percent year over year to AU$10 million, while revenue for the half increased by 9 percent to AU$91.4 million.

The Australian Securities Exchange (ASX)-listed company's domestic retail segment experienced revenue growth of 3 percent and margin growth of 12 percent over the prior corresponding period to AU$14.7 million, which MNF attributed to its success in the SMB and enterprise and government sub-segments, where it is expecting further growth.

The domestic wholesale segment delivered 49 percent margin growth year over year to AU$15.5 million. MNF commented that the result is due to the "monotonic increase" in recurring revenue subscriptions in high-margin hosted services products. The company also expects domestic wholesale momentum to continue.

Global wholesale saw revenue increase 10 percent to AU$64.2 million and and margin increase 7 percent on the prior corresponding period, with MNF noting margin contribution for the half year was AU$11.2 million.

During the year, MNF -- which rebranded from its previous name of MyNetFone in late 2015 -- completed capacity and technology upgrades in London and Los Angeles, which it said will allow it to expand capacity and provide additional products to the respective markets.

In addition, MNF invested in extra sales resources in Europe and North America in order to expand its customer base in the regions.

MNF announced the AU$17.5 million acquisition of conferencing provider Conference Call International (CCI) earlier this month, which included a business, enterprise, and government customer base of approximately 5,000 organisations.

CCI, headquartered in Melbourne, is expected to contribute AU$7.9 million in revenue to MNF.

"The acquisition of CCI provides MNF a significant entry into the audio conferencing and collaboration market in Australia and the region. These applications generate high-margin recurring revenues, with potential for consistent long-term growth and innovation potential," MNF CEO and founder Rene Sugo said previously.

"These applications are an excellent fit with the current MNF business, enterprise, and government sub-segment, as well as a high-value synergy with the group's domestic and global network assets."

In October, MNF signed a mobile virtual network operator (MVNO) deal with Telstra Wholesale to push into 4G and 3G mobile offerings and offer its customers a "complete communications solution".

Earlier this year, MNF also announced being signed on to the Victorian government's telecommunications panel.

In April 2015, MNF bought New Zealand telco Spark's international voice business, TNZI, for NZ$22.4 million. MNF in June announced the completion of this purchase after receiving approvals from the United States government.

TNZI sells voice, data, mobile, and digital services throughout Europe, North America, Asia, and Oceania.

In March last year, MNF then announced that it would be constructing a nationwide voice network in New Zealand through its IP voice communications provider Symbio Networks, which it will wholesale to service operators and over-the-top (OTT) providers.

MNF said it had identified a gap in the market left by New Zealand's bigger telcos, which are choosing to occupy themselves with growing their own retail networks rather than developing the wholesale layer to lease off to the many low-cost OTT operators that are entering the market.

MNF told shareholders its first half result was in line with expectations for the period, with the board anticipating MNF will hit its forecast EBITDA of AU$22.3 million and NPAT of AU$11 million for the full year ending June 2017.