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Macquarie Telecom reports 214 percent profit increase to AU$6.2m

The telecommunications services provider has reported a 214 percent year-on-year increase in net profit to AU$6.2 million on revenue of AU$106.8 million for the first half of the 2017 financial year.
Written by Tas Bindi, Contributor

Macquarie Telecom has reported its results for the first half of the 2017 financial year, with the telecommunications services provider announcing net profit of AU$6.2 million, a 214 percent increase from the AU$2 million reported in the previous corresponding period.

Earnings before interest, taxes, depreciation, and amortisation (EBITDA) was AU$19 million, a 22 percent year-on-year increase from the AU$16.7 million reported for the first half of the 2016 financial year.

Revenue was up by 7 percent, from AU$100.1 million to AU$106.8 million, with its Telecoms business contributing AU$71.2 million in revenue, up 2 percent from AU$70 million, and Hosting Services adding AU$38.7 million in revenue, a 16 percent increase from the AU$32.5 million reported a year ago.

Macquarie Telecom reported total equity of AU$83.5 million, up AU$1.1 million from AU$82.4 million, and cash and cash equivalents stood at AU$24.7 million as of December 31, which was down slightly from AU$25.3 million in the first half of the 2016 financial year.

The company attributed the growth in its Telecoms business to its focus on improving customer experience.

Macquarie Telecom began providing live data on its Net Promoter Score (NPS) results in December 2015 in order to make customer satisfaction feedback available for potential customers to view on its website. The company boasts an NPS of 66 for Q2 of the current financial year.

It has also been pushing the National Broadband Network (NBN) company to report its live NPS real-time customer experience measurement in order to make customer service more central to its provision of wholesale broadband services.

"We need the NBN to move to Net Promoter Score, move to measure customer experience in real time, so we can then as retail service providers provide that same input as part of our service experience to our customers," CEO David Tudehope said in July 2016.

"It would be incredibly transformational for the NBN; it would be incredibly transformational for us as an industry."

Macquarie Telecom said its Hosting profits grew due to "improvement in datacentre asset utilisation".

"Strong sales of datacentre capacity reflects the success of our hybrid IT solutions that allow our customers to buy the right combination of colocation, cloud, and security to suit their needs," the company stated in a document submitted to the Australian Securities Exchange.

In May 2016, Macquarie Telecom announced that it was spending an additional AU$15 million on equipment for its datacentre business over a period of 20 months, following the signing of an unnamed Fortune 100 customer that required expanded datacentre capacity of 2.5MW to meet its demands. The customer will not be active in billing until Q3 of the current financial year, Macquarie said.

The company has two carrier-neutral hybrid "intellicentres" in Sydney and one in Canberra. Its Intellicentre 2, located in Macquarie Park, is a tier-three datacentre that the telco said has seen strong customer growth in industries and the public sector.

Earlier in February, Macquarie Telecom announced that it had completed the expansion of its intellicentre bunker in Canberra, enabling federal government agencies to fulfil their "cloud first" policy, especially as security becomes the highest priority following the Census debacle last year.

"Our Canberra datacentre is purpose-built to meet the security needs of federal government customers, providing them a secure government to host data and deploy cloud services. The government's need for security has never been higher, as was highlighted in review of the eCensus failure last year," Macquarie Government managing director Aidan Tudehope said at the time of the announcement.

"The right cloud solution can be much more secure than legacy government systems ... Macquarie Telecom has made a deliberate decision to keep our datacentres on Australian soil to keep all sensitive data within the country and completely under the Australian jurisdiction."

For the 2016 financial year, Macquarie Telecom reported net profit of AU$5.4 million, turning around the previous year's AU$4.3 million net loss. EBITDA for that financial year was AU$32.3 million, a 22.8 percent year-on-year increase from the AU$26.3 million reported during the 2015 financial year.

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