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Superloop announces AU$1.19m loss for FY15 as network construction continues

Fibre company Superloop has announced a loss of more than AU$1 million on revenues of just over AU$7,000 as it continues rolling out its networks across APAC.
Written by Corinne Reichert, Contributor

Asia-Pacific fibre infrastructure company Superloop has released its first annual results report [PDF] for the financial year ending June 30, 2015, recording a net loss of AU$1.19 million due to the costs of developing the new business and expanding its fibre-optic network across Australia, Singapore, and Hong Kong, as well as a lack of customers.

The company also reported underlying earnings before interest, tax, depreciation, and amortisation (EBITDA) at a loss of AU$3.55 million. Given the continued rollout of its networks, customer revenue was not recorded; however, the company made revenue from interest income on deposits held, which amounted to AU$7,217.

Operating expenses were AU$3.26 million for FY15, including AU$1.1 million in employee expenses, AU$1.7 million in professional services, AU$329,060 in office and administrative expenses, and AU$70,207 in marketing costs.

The company's net assets were worth AU$53.77 million as of June, with cash and cash equivalents equalling AU$18.1 million. Superloop also realised foreign exchange gains of AU$3.42 million, which was mainly attributed to acquiring and funding its duct network in Singapore.

Superloop, which was founded by Australian technology entrepreneur Bevan Slattery in 2014, only listed on the Australian Securities Exchange (ASX) in June after a successful IPO wherein it raised AU$17.5 million through more than 2,300 investors.

The company was created when Megaport's fibre assets were spun off so that Megaport could return its focus to expanding its layer 2 elastic connectivity platform outside of Asia and Australia.

Superloop's 130km fibre network in Sydney, Melbourne, and Brisbane was subsequently sold off to Amcom. In return, Superloop secured a 15-year exclusive lease on the network, which services such customers as iiNet, M2, and Anittel.

"2015 has been a landmark year for Superloop. Within the past year, Superloop has built or acquired strategic network assets in Singapore and Australia, obtained our Unified Carrier Licence in Hong Kong, assembled an outstanding management team, and of course undertaken our successful initial public offering (IPO) on the Australian Stock Exchange. These are the important foundations of our future," said founder and executive chairman Slattery in the company's annual report.

"Looking forward, the board is working to build on this foundation. Later this quarter, Superloop expects all initial networks in Singapore and Australia will be completed and fully serving customers."

The Superloop (Hong Kong) subsidiary was also granted a Unified Carrier Licence (UCL) by the Hong Kong Office of the Communications Authority in August, with Superloop CEO Daniel Abrahams stating that this would enable the company to provide the Chinese territory with fixed-line telecommunications services.

"The UCL allows Superloop to build, operate, and provide telecommunications networks and services in Hong Kong," Abrahams said.

Abrahams had previously told ZDNet that from July, the company would focus on the completion of building out its Australian network and picking up customers.

"We said Q3 of 2015, and that's about to happen. We obviously have this fairly significant milestone under our belt now with the ASX listing, and we committed to make sure the investors understand the growth opportunity that Asia-Pacific represents in the telecommunications sector, and particularly in Singapore," he said.

"Post the IPO, it's getting the networks live, and getting the customers onto the networks."

In Singapore, the company acquired and has been installing a 120km duct network underground, with a fibre optic network also currently being rolled out to connect datacentres and submarine cable landing stations.

Abrahams said in June that the dark fibre company would also be targeting telcos and content providers in Asia Pacific, predominantly in Singapore, with the swell in subsea cables and datacentres a major drawcard for the region.

"We see Australia as an important market, but we recognise growth is going to come from Asia Pacific," he said.

The company last week confirmed that it would have its networks in Singapore and Australia finished by the end of Q3 2015.

Project Red Lion

Last week, Superloop announced that it would be investing further into its Singapore network [PDF], by expanding the fibre that connects its datacentres and cable landing stations directly into 25 commercial buildings in the CBD.

Abrahams said the project, dubbed "Red Lion", will involve an investment of under AU$2 million and will leverage the provider's existing assets, meaning no material increase to operating costs.

"Project Red Lion will bring on-net buildings that accommodate some of the largest corporate and enterprise customers in the country," the CEO said.

"The first phase of Red Lion will expand our network into more than 25 strategic commercial buildings that provide Superloop and its channel partners, as part of its upcoming channel partner program, with access to the regional headquarters of a number of multinational enterprises, among other potential customers."

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