NBN clears positive full-year EBITDA hurdle for first time

NBN reported posting its first set of positive earnings before interest, tax, depreciation, and amortisation (EBITDA) for a full year on Tuesday, with the number shifting from a AU$650 million loss last year to AU$1.35 billion at the end of June.

Revenue for the company increased 21% to AU$4.6 billion, while AU$3.6 billion of depreciation and amortisation and AU$1.6 billion in finance costs saw NBN walk away from fiscal 2021 with a net AU$3.8 billion loss, an improvement of 27% on last year.

During the year, the company responsible for the National Broadband Network said it added 933,000 connections to its network, while once again, residential average revenue per user remained stuck at AU$45. Including business connections, NBN needs average revenue per user of AU$51.

With the network being declared built and fully operational in December, NBN said capital expenditure was down 45% to AU$2.8 billion, employee-related expenses dropped 5% to AU$829 million, and subscriber payments to Telstra and Optus fell 49% to AU$1.2 billion.

With its entry into private debt markets during the year, NBN said it was now carrying AU$23.8 billion in debt, with the weighted average cost of the debt dropping from 3.96% to 2.79%, fixed interest ratio dropping from 95% to 88%, and the average duration of debt -- excluding its AU$19.5 billion loan from the Commonwealth -- increasing from 3.8 years to 5.7 years.

The debt consists of AU$3.3 billion from banks, AU$2 billion in Australian medium-term notes, AU$200 million in private placements, and $2 billion from US debt markets.

"We are proud of the measures we have put in place to support the nation [during the pandemic], and the balance we have achieved in delivering strong and sustainable operational and financial results. This is what we believe is expected of us by our ultimate shareholders -- every Australian taxpayer who has indirectly invested in the NBN network," CEO Stephen Rue said.

"Our financial discipline and the delivery of predictable financial and operational performance gives us a solid foundation for future investment as we work to improve and enhance our customers' experience of the network."

On Monday, NBN announced it would be creating 44 more business fibre zones, which will allow businesses to get a full fibre Enterprise Ethernet connection, as well as reduced rates and connection fees.

The new zones will cover 60,000 businesses from September and take NBN to 284 business fibre zones capable of hooking up 850,000 businesses around the nation.

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