Primus to pump Telstra GSM

Primus Australia managing director Greg Wilson unveiled the Telstra arrangement while announcing the company's $3.9 million profit for its third quarter. Excluding a $3.3 million one-off, write down of non-cash assets related to its Hotkey internet subsidiary, the company recorded a net profit of $7.2 million.

Wilson said the result was the company's third consecutive quarter of profitability, and compared to its profit of $7.8 million for its second quarter and a loss of $4.5 million for the same period a year ago.

Despite "flat" conditions across the industry, Wilson said Primus net revenues grew 2.3 percent in the third quarter to $120.4 million. He said the company was on target to exceed its EBITDA (earnings before interest, tax, depreciation and amortisation) forecast for the year of $60 million to $70 million.

"This was an excellent performance in what was clearly a challenging telecommunications environment in Australia," Wilson said.

Primus' strong revenue performance was the result of the company's ongoing "optimisation” strategy" that aimed to attract higher value, higher margin customers.

Wilson said the company had experienced strong growth in its broadband data offerings, as well as voice-over-IP services to broadband customers.

He said the new "agreement in principle" with Telstra was a recognition of Primus' "strong and growing presence" in the Australian communications market.

Wilson said Primus still intended to list its Australian operation on the Australian Stock Exchange, although it planned to wait until the market strengthened.

"We are gearing the company up to take advantage of a listing," Wilson said, although it was unlikely to take place before mid-to-late 2003.

"We don't need to raise money ... so we can afford to wait until the market is in a more desirable position," he said.

It has not been decided how much of the company would be offered to the public through a float, although Wilson said its parent firm - US-based Primus Telecommunications - intended to retain a majority holding.

Meanwhile, Wilson said the company would continue to look for ISP acquisition opportunities and confirmed Primus would "look at" acquiring the OzEmail business should it be put on sale by the administrators of OzEmail parent WorldCom.

He said the Primus Australia operation had paid back $14 million during the third quarter to its US-based parent, Primus Telecommunications, bringing repayments to the parent to more than $50 million this year. The US company spent $300 million establishing its Australian subsidiary, of which $150 million was converted to equity in December last year.