NBN aims up at first positive full-year EBITDA after 25% revenue bump

The company responsible for the National Broadband Network (NBN) has dispensed with its previous earnings before interest, tax, depreciation and amortisation (EBITDA) games as it gears up to report positive earnings at year end after a solid first half.

For the six months to the end of 2020, NBN reported a 25% increase in revenue to AU$2.26 billion, which it said was thanks to 660,000 premises joining the network and increased demand for higher speed plans. Revenue from business customers was also up by a quarter compared to this time last year, and was reported as AU$397 million. Average revenue per residential user remained flat over the past year at AU$45 each month.

On the EBITDA front, the company reported AU$424 million, a AU$1.1 billion turnaround on the AU$663 million EBITDA loss reported last year, and included AU$809 billion in payments to Telstra and Optus as users switch onto the government-owned network. Those payments had previously been excluded as NBN paraded an "adjusted EBITDA" figure as its headline number.

The company said it was "focused on raising AU$27.5 billion of private debt" by the end of the middle of the 2024 calendar year and has repaid AU$3 billion of its AU$19.5 billion loan from the federal government during the half, thanks to the AU$1.6 billion it raised in medium term notes at 1% interest and AU$1.4 billion from its bank credit.

"The strong total revenue growth in the first half puts us in solid position to achieve positive full year statutory EBITDA for the first time, which will be a significant financial milestone for the company," NBN CEO Stephen Rue said.

"We will continue to put our customers at the centre of everything we do. We will support businesses by extending the competitive benefits of NBN to more regions, and we will continue to co-invest with state governments and local councils to help ensure that the benefits of fast broadband are extended to more Australians than ever before."

Across the first half, the company spent AU$1.42 billion on capital expenditure, and announced the next 100,000 premises to hooked up with its fibre-to-the-node upgrades that will cost around AU$4.5 billion.

In NSW, the suburbs and towns of Campbelltown, Elderslie, Narellan, Maitland, Singleton, Tarro, New Lambton, Bathurst, and Orange are on the list; in Victoria, Deer Park, Sydenham, Berwick South, Cranbourne, and more parts of Narre Warren will be next; Albany Creek, Ashgrove, Bald Hills, Ferny Hills, Robina, Burleigh Heads and Townsville will get the upgrade in Queensland; for South Australia the list is Elizabeth, Gepps Cross, Salisbury and Golden Grove; while in Western Australia the suburbs are Girrawheen, Kingsley, Wanneroo, Canning Vale, and Jandakot South.

The company said it was "currently engaged in consultation" with ISPs on how customers will be informed of the upgrades, and what they need to do to get a fibre lead-in. NBN has previously said when a customer orders a service that their copper connection cannot handle, it would at that point build the fibre lead-in to the premise.

At the start of February, NBN confirmed it was pausing connecting new HFC premises to its network, due to coronavirus-related supply chain issues. Nevertheless, the company claimed its HFC footprint was "progressing well".

"As at 10 February 2021, 94% of the 2.5 million premises in the HFC footprint can access the NBN Home Superfast [250/25Mbps] wholesale speed tier, and 46% of premises in the HFC footprint are able to access the NBN Home Ultrafast [500-1000Mbps/50Mbps] wholesale speed tier."

NBN reported it had decreased its net loss by 25% to AU$2.1 billion for the half. In August, it reported an EBIT loss of AU$3.78 billion for the full 2020 fiscal year, compared to AU$3.89 billion a year prior.

The company reported its employee expenses increased by 3% due to restructuring charges and unused annual leave by its employees. Rue said the company had reduced its employee number by 800 during the first half, but would not be drawn on further cuts.

"The size and composition of the workforce changes all the time -- it can change up, it can change down," Rue told ZDNet.

"We've been hiring people in regional Australia, we've been hiring people ... to go into people's homes."

Last week, Telstra resumed its T22 job shedding process as it flagged 1,425 employees would leave the incumbent telco.

On Monday, the CEPU informed its members that under the plans to restructure Telstra into three business, that "pretty much all the jobs at Telstra" are technically redundent.

"The truth is, that even if your role is redundant at Telstra, the three subsidiaries are going to have a whole lot of work with no employees to perform it. So, the scenario is one of thousands of jobless ex-Telstra employees and thousands of vacancies at the subsidiaries," the union said.

"As you can see, the solution is the problem.

"In our preliminary discussions, Telstra has indicated the subsidiaries will seek to employ the same people from Telstra, to continue doing the same work once they have taken it over."

The CEPU added the existing Telstra enterprise agreement for workers would follow the employees across until it is terminated or a new agreement is signed.

Updated at 11:10am AEST, 10 February 2021: Added more information

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