SkyNetGlobal writes down $7m

Sydney broadband firm SkyNetGlobal lost $6.6 million in the half year ending 31 December, despite a 330 percent jump in operating revenue over the same year-ago period.

The Sydney and London listed wireless broadband company reported an overall loss of $6.6 million in the last six months of 2004, comprising an operating loss of $2.2 million and one-time expenses -- including write-downs -- of $4.4 million.

Sales revenue leapt 330 percent to $2.3 million for the same period, up from $530,000 reported for the same six months in 2003.

However, chief executive Jonathan Soon claimed the underlying fundamentals of the business had never been better.

“Past revenue and profitability were enhanced by asset sales, which represented 76 percent of all revenue in 2004. These latest results are entirely from operations,” Soon said.

He said all three business units were increasing their sales. The company had invested heavily in W Home.

W Home broadband now had 376 percent more customers, up to 2333. The number of W Home-connected buildings had doubled to 113, he said.

Average take-up rate for subscribers across all W Home-enabled buildings increased from 21 to 32 percent in the six months to 31 December, he said.

“SkyNetGlobal’s near-term profitability picture should improve as well,” Soon said.

Losses in the half-year were a write-down of non-core assets, including software and access rights for SkyNetGlobal’s wireless hotspot network in Singapore, which had been
sold, he said.

Also, there were once-only costs associated with SkyNetGlobal’s second listing, on the London Stock Exchange’s AIM section.

 “Our Board believes that absorbing these one-time costs and write-downs now, while
painful, is necessary in order to unburden the company from a future drag on earnings,”
Soon said.

SkyNetGlobal had just signed a master agreement with large strata property management company Prudential Investment to help get W Home broadband and home automation products into up to 4000 residences.