The Aussie Broadband Ltd (ASX: ABB) share price is slipping this morning after the company posted whopping first half earnings growth.
Right now, stock in the All Ordinaries Index (ASX: XAO) telecommunications provider is down 1.54% at $2.89 after dropping even lower near the open.
Aussie Broadband share price falls as profit rockets
Here are the key takeaways from the telco provider's first half earnings:
- $8.6 million net profit after tax (NPAT) – a 516% jump on that of the prior comparable period (pcp)
- $379 million of revenue from ordinary activities – up 65% on that of the pcp
- $41.1 million of earnings before interest, tax, depreciation, and amortisation (EBITDA) – up 86%
- $30.8 million of operating cash flow – a 35% improvement
- Gross margin lifted 2.5% to 34.9%
Aussie Broadband saw its revenue surge last half as it grew its broadband subscribers and other revenue streams. It also recognised earnings from its recently acquired Over the Wire business.
What else happened last half?
The company saw plenty of growth across its key product lines last half.
Its broadband connections soared by 50,449 to 635,242 connections. Meanwhile, its mobile services grew by 10,669 to reach 50,951 and its average voice minutes increased by 13 million to 125.7 million.
Aussie Broadband's market share also rose to 7%, excluding satellite, in a declining nbn market.
Topping it off, the company implemented the combination of its business with Over the Wire. That brought $6 million of annualised synergies last half and is on track to bring about between $8 million and $12 million of annual synergies by 2025.
What did management say?
Aussie Broadband co-founder and managing director Phillip Britt commented on the release driving the company's share price today, saying:
We are pleased to report that Aussie Broadband has continued to deliver outstanding financial and operational performance, with strong growth in both revenue and customer numbers as we successfully execute our Aussie 2.0 strategy to diversify earnings through a broader product offering that brings scale to the business.
EBITDA grew faster than revenue reflecting the operating leverage from our fibre network and the positive shift to higher margin segments, while proactively managing our residential nbn growth strategy.
What's next?
Aussie Broadband upgraded its full year EBITDA guidance but cut that of its revenue following a strong start to 2023.
It now tips its full year revenue to come in at between $780 million and $800 million while its EBITDA is expected to be between $85 million and $90 million.
The company remains committed to becoming Australia's fourth largest communications and technology services provider by 2025.
Aussie Broadband share price snapshot
The Aussie Broadband share price has taken off in 2023, gaining 10% year to date.
However, looking further back, the stock has slumped 42% over the last 12 months.
For comparison, the All Ords has gained 5% year to date and 2% over the last 12 months.
