Decade old Optus sniffs at break even

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Optus is creeping closer to its goal of reaching cashflow break even, announcing a net loss of $76 million for the first fiscal half of 2002-2003 and predicting full year EBITDA growth of more than 30 percent.

In the same period a year ago, Optus booked a net loss of $287 million.

"I think it is the first time that Optus, in its history, has been cash flow positive," Optus chief executive Chris Anderson told a news conference. However, he said this position may not be maintained for the full year as there were large capex items due in the second half.

"We are well on our way to our target, which we've said is to be cash flow break even by the end of next fiscal year," Anderson said.

Optus' EBITDA earnings climbed from $435 million to $601 million over the same period, while overall revenue rose 12 percent to $2.6 billion.

For the full year, Optus said it is expecting EBITDA growth of more than 30 percent, excluding the cost of the C1 satellite launch in the second half.

Optus' mobile revenue rose 19 percent compared to the previous first half, to $1.35 billion, while subscriber numbers climbed 12 percent to 4.3 million. "We are the only one of the three main carriers that has not lost share as a result of mobile number portability," Optus mobile director Paul O'Sullivan said.

Prepaid continued to be the main engine for mobile growth, with subscriber numbers increasing seven percent between the June and September quarters, compared to a postpaid increase of 0.6 percent.

Overall business revenue increased 13.4 percent compared to September 2001, resulting in revenue of $461 million. Wholesale voice and data revenue declined substantially over the period, with voice falling 24 percent to $145 million, while data and IP dropped 36 percent to $79 million.

Optus blamed market conditions, including an oversupply of capacity, for the drop in wholesale revenue.

Revenue in the consumer and multimedia division grew 21 percent over the September 2001 half to $592 million. Narrowband, or dial up, internet revenue increased 32 percent in the same period, to $41 million, with Optus now claiming 433,000 subscribers on narrowband.

Broadband cable revenue, including voice internet and cable TV, grew 20 percent to $295 million, with Optus claiming 75,000 broadband subscribers.

Optus reported it had cut capex in consumer and multimedia by 59 percent, but Anderson said the company has no more plans for large scale cost cutting exercises.

"We don't plan any other full scale reviews of the nature of the one we did last year and certainly there will be no review of any particular division," he said.

Anderson again stated that Australia's cable TV business could not continue in its current form. "I think the industry is flawed. No one is going anywhere at the moment," he said. Anderson said he expects the ACCC to give a ruling on the undertakings presented to it by Optus and Foxtel within the next few weeks.

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