Kordia posts strong half-year profit

Debt repayments ahead of schedule, says CEO. Orcon beats budget

State-owned network company Kordia has posted a strong half-year after tax profit of $1 million for the half ended 31 December 2009.

The result compares with an an after tax loss of $4.4 million for the same period to December 2008 and is against a full 2010 year budget of $1.3 million. The company was ahead of both budgeted revenue and profit and is also ahead of budget in debt repayments, a key priority signalled by CEO Geoff Hunt last year. Kordia says it has reduced its net debt from $105.4 million to $101.1 million in the past six months. Kordia Networks produced $33.8 million in revenue, below budgeted revenue of $34.1 million. However, Kordia Solutions was more than $8 million over budget with $75 million in revenue for the half year. Hunt says that result reflects the $167 million investment made in the business in the past four years, which are now contributing. “The transformation of the Kordia Group from a sunset, analogue, broadcast-centric business to a technology, media and telecommunications business with new services and products is really starting to deliver to the bottom line,” he says in a statement. Hunt says sales activity for new products such as KorKor integrated two-way digital radio and OnKor carrier Ethernet is increasing. "However, we are noting a reduction in capex investment, and considerable delays in decision-making inside customer organisations — and more generally, across the industry — as a result of the challenging economic climate,” he says.

“Kordia Solutions Australia has again delivered a strong result, and has a good pipeline of work for the next six months from a broad base of customers and industry sectors, which is pleasing." Kordia Solutions New Zealand also has some promising contracts in the pipeline after a difficult first half, he says. In addition, ISP Orcon is achieving its targets and is ahead of budget on both revenue and EBIT, he says. Orcon produced $26.7 million in revenue for the half year, compared with a budget of $24.7 million.

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