The Superloop Ltd (ASX: SLC) share price is the third-worst performer on the All Ordinaries on Tuesday behind only Altium Limited (ASX: ALU) and Seven West Media Ltd (ASX: SWM).
In afternoon trade the telco company's shares are down 13% to 74 cents. They were down as much as 18% to 69.5 cents at one stage.
Why is the Superloop share price crashing lower?
Investors have been selling Superloop's shares following the release of a disappointing half year result. For the six months ended December 31, the company reported EBITDA of $4.1 million on revenues of $51.3 million. This was a 9.1% and 14.7% decline, respectively on the prior corresponding period.
Superloop's results were impacted by its decision to divest its non-core products. These include the CMS services segment and non-APAC Guest WiFi.
On the bottom line the company reported a loss of $21.4 million, compared to a loss of $8.7 million in the prior corresponding period. This was due largely to an increase in its depreciation and amortisation expense to $21.65 million.
In light of this poor performance, the company has continued to suspend its dividend.
Outlook.
With Superloop's Asia Pacific network complete, management advised that it can now focus on a portfolio of key initiatives to enable the company to scale and meet customer needs and utilise network capacity.
However, this hasn't stopped the company from downgrading its guidance for the full year. Previously Superloop was targeting FY 2020 EBITDA of $14 million to $16 million. This has now been downgraded to $12 million to $15 million.
Management explained: "The board has deemed it prudent to revise its guidance to $12m – $15m as we fully assess the short term implications of international travel restrictions and the resulting business impact from the coronavirus outbreak in particular, our student accommodation & our international prospects given our exposure to Hong Kong and Singapore."
