Pipeline strong for Pipe Networks

One-off revenues to be replaced with income from operations in the second half.

Pipe Networks was on track to turn over nearly $100 million this financial year following a strong result in its first half, it said.

The builder of the 6900 kilometre PPC-1 submarine optical fibre cable between Guam and Sydney said it made a $16.6 million net profit after tax in the first half of the financial year, mostly from one-off events in its overseas operation ($10.1 million profit) on a 130 percent lift in revenue to $55.4 million.

Pipe projected a profit of $23 million to $25 million by the end of the financial year from $94 million to $98 million revenue.

Pipe, which was set to merge with Australian ISP TPG, said the near trebling of profit on the same period a year before ($5.5 million) was due to revenues from indefeasible rights of use contracts ($14.9 million), sale of its Papua New Guinea spur ($7.4 million) and foreign exchange gains ($1.4 million).

Pipe chief executive officer Bevan Slattery said $29.8 million in first-half revenue came from domestic operations and $25.7 million from overseas.

He expected leasing customers, which "contributed minimal revenue" and profit in the period owing to the completion of the link in October to make "solid contributions" until the end of the financial year.

The company said domestic saleable fibre capacity grew 16.2 percent and utilisation rates lifted 25.6 percent (22.4 percent in December, 2008). That and recurring income lifted revenue 20.7 percent to $22.7 million from the same period a year before.

"Utilisation rates are expected to improve as sales activities are focused on securing additional revenue from existing capacity," Pipe said.

Pipe identified growth in:

• Data centre capacity: Corporate, ISP and government demand led to 46.2 percent growth to $3.8 million
• Internet, VoIP Peering: Customers calling for more bandwidth and redundancy lifted revenue 8.3 percent to $1.3 million
• New revenue-generating assets: Property, plant and equipment rose to $189.7 million in December from $118 million a year before
• Domestic operations: 1400 kilometres of cable sold for dark fibre, data centres, tele-housing and company-location, peering and managed services

Figures at a glance