Engin suffers $6.7 million loss during ‘07

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Engin suffers $6.7 million loss during ‘07

Things aren’t looking good for Australian VoIP vendor Engin. According to the company’s audited draft financial statement for the half year ending December 2007, Engin showed a loss of $6.7 million dollars.

Engin blames the loss on a new customer relationship and billing system, implemented in the second half of 2007. This went live in the final quarter of last calendar year and it did nothing to attract high customer growth. Although Engin states in an ASX-announcement that its subscriptions were up 11.4 percent to 85,000.

The vendor undertook a strategic review of the company and decided to place its ADSL 2+ project on hold until profitability returns for the company’s traditional telephony business. Engin claims it’s still holding out for it to be able to combine broadband access and a telephony solution.

Whilst the company is still determined to market TiVo to its customers, as well as work with Seven and its related bodies, it will no longer hold exclusive distribution rights for the product.

“To reduce funding demands, Engin has decided to relinquish its exclusivity of distribution status and in doing so significantly reduce the performance related risk and demands on working capital carried by Engin under the TiVo distribution contract,” stated Engine to the ASX.

It has already reached an agreement with HTS (A Seven Group Company and holder of TiVo rights).

The vendor is still in talks with ISP Unwired, despite selling its share of the ISP to Seven Network Limited, to find compatible products to take out to market. This will allow Engin to distribute TiVo as part of a “Broadband Triple play”.

According to the VoIP vendor, the idea behind a “Broadband Triple” play is to decrease its working capital.

Engin has also announced that Ian Smith, who joined the vendor in September 2007, will assume the role of chairman of the board.
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