SINGAPORE (Feb 10): NetLink NBN Trust saw its earnings grow 9.6% to $21.5 million for 3QFY2020 ended December 2019, from $19.6 million a year ago.
Earnings per unit rose to 0.55 cents for 3QFY2020, compared to 0.50 cents in 3QFY2019.
3QFY2020 revenue rose 2.9% to $91.6 million, from $89.0 million a year ago.
The increase was mainly due to higher residential revenue, partially offset by lower installation-related revenue, diversion revenue as well as ducts and manhole service revenue.
Residential connections continued to drive NetLink Group’s revenue, with residential connections revenue increasing by 12.8% to $58.7 million in 3QFY2020 – accounting for 64.1% of total group revenue.
As at end December, there were 1.42 million residential connections, compared to 1.28 residential connections a year ago.
EBITDA climbed 7.4% during the quarter to $67.5 million, on the back of a 3.0 percentage point rise in EBITDA margin to 73.6%.
As at end December, cash and cash equivalents stood at $83.4 million.
No distribution has been declared for 3Q, as distributions by the trust will be made on a semi-annual basis.
NetLink Trust declared distribution per unit of 2.52 cents in 1HFY2020, compared to DPU of 2.44 cents in the same half-year period a year ago.
“The resilience of our business model enables us to achieve sustainable growth in terms of revenue, EBITDA and profit after tax, as we continue to see a steady increase in the number of residential, non-residential and NBAP connections,” says Tong Yew Heng, CEO of the trustee-manager.
“Going forward, the NetLink Group remains fully supportive of Singapore’s objectives towards the deployment of 5G infrastructure and growth of the 5G innovation ecosystem and will continue to work closely with our industry partners to accelerate these objectives,” he adds.
For FY2020 ending March, the manager says the NetLink Group expects revenues from key connection services to be higher than a year ago, mainly due to higher residential connections.
However, the group also expects capital expenditure in FY2020 on the back of continued investments and expansion its network to improve its capability and resiliency.
Meanwhile, the group is continuing to expand its network in new housing estates.
With its extensive nationwide fibre network, the group believes it is well-positioned to support projects such as the Smart Nation initiatives, the Punggol Digital District and Jurong Innovation District.
It adds that it is monitoring the development of the 5G network in Singapore and will explore opportunities associated with the new market development.
To this end, the group says it is also supporting IMDA’s objectives to achieve pervasive deployment of 5G infrastructure and grow the 5G innovation ecosystem.
Riding on this “resilient business model” the group says it expects to provide recurring and predictable cashflows to support distributions to unitholders.
Units in NetLink Trust closed 1 cent lower at $1.00 on Monday, before the results announcement.
Year-to-date, the counter is trading 5.8% higher.
