Fibre-optics adds to TeamTalk's profits

CityLink buy proves valuable for mobile radio firm

TeamTalk has posted a $1.5 million profit for the half-year to December.

In a results announcement posted on the NZX website today, the mobile radio and fibre-optic operator notes that at $15.5 million, revenue was up 2.4% on the July-December 2007 figure, and EBITDA of $6.3 million was 4.5% better than for 2007.

Revenue from mobile radio was up 2.7% to $10 million, while fibre-optic provider CityLink, which TeamTalk bought in 2006, provided further revenue of $5.4 million, up 1.9% on 2007’s figures.

The announcement notes that CityLink’s was “a particularly pleasing result, given that the 2007 result had been boosted by a major one-off project for Peter Jackson’s Camperdown studios.

“Most importantly, the recurring monthly revenue from CityLink is over 20% higher than the corresponding period”, the report notes.

TeamTalk invested $4.4 million in its wireless and fibre-optic capacity in the second half of 2008, with the aim of expanding coverage and reducing the company’s dependence on third-party infrastructure, according to the announcement.

The overall $1.5 million profit would have been higher, but it was “unduly influenced by bringing to account a $0.5 million loss on the revaluation of interest rate swaps at the end of the [July-December 2008] period”, according to the report.

A note of caution is sounded in the announcement, with a prediction that the growth in the mobile wireless business, which bolstered the 2008 result, is “not expected to continue, largely because of the recessionary trading conditions that our customers, particularly in the key transport sector, are currently experiencing”.

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