Australian Government broadband company has watershed year in 2020.
NBN Co has reported total revenue of A$2.26 billion for the six months to 31 December 2020, a 25 per cent increase on H1 FY20. The strong result was underpinned by the acquisition of more than 660,000 new customers in the first half of FY21 and increasing demand for higher speed broadband plans.
NBN Co connected a total of more than 7.9 million premises by 31 December 2020, and the company is well placed to meet its Corporate Plan 2021 target of 8.2 million connected premises by 30 June 2021, despite current challenges in the HFC supply chain. A total of more than 11.9 million premises were made Ready to Connect by 31 December 2020.
NBN Co generated Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA), before subscriber costs, of A$1.23 billion in H1 FY21, compared to A$775 million in H1 FY20.
Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA), including subscriber costs, was A$424 million in the first half, reflecting a A$1.1 billion improvement on the corresponding period last year as a result of revenue growth and declining subscriber payments to Telstra and Optus.
In the first half of FY21, NBN Co recognised A$809 million in subscriber costs to Telstra and Optus, compared to payments of approximately A$1.44 billion in H1 FY20. As previously stated, these subscriber payments will continue to decrease throughout the fiscal year and are forecast to cease by FY24.
Residential Average Revenue Per User (ARPU) remained steady at A$45 in the six months to 31 December 2020, despite significant revenue forgone as a result of NBN Co’s response on behalf of the community to the COVID-19 pandemic. Despite challenging business conditions, revenue from Business customers increased to A$397 million in the first half of FY21, up 25 per cent from A$319 million in the previous corresponding period.
NBN Co continues to see strong customer demand for higher speed tiers. At 31 December 2020, approximately 70 per cent of residential and business customers were connected to plans based on nbn wholesale speed tiers with peak download speeds of 50 Mbps2 and above and approximately 80 per cent of new orders from new and existing customers were for plans based on wholesale speed tiers with peak download speeds of 50 Mbps2 and above.
Capital expenditure in the first half was A$1.42 billion, with build and connection costs making up the lion’s share.
On 1 December 2020, NBN Co finalised the latest Wholesale Broadband Agreement (WBA4) agreement with internet retailers. WBA4 delivered more than 70 changes to the previous Wholesale Broadband Agreement (WBA3) to drive substantial improvements and price certainty for retailers and will help to create better customer experience outcomes.
NBN Co is focused on raising A$27.5 billion of private debt by June 2024. In addition to the A$6.1 billion facilities secured before 30 June 2020, the company raised additional facilities of A$4.0 billion during the six months to 31 December 2020, including A$1.6 billion in Australian Medium Term Notes (AMTN). It repaid A$3.0 billion of the A$19.5 billion Commonwealth Government loan using the full proceeds of the AMTN and A$1.4 billion bank debt draw downs.
