Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 


Kordia turns to a loss in 2014

Kordia turns to a loss on difficult trading in Australia, end of NZ analogue revenue

By Tina Morrison

Sept. 3 (BusinessDesk) - Kordia Group, the broadcasting and telecommunications platform operator, turned to a loss last year as it faced increased rivalry and disputed contracts in its Australian unit, which accounts for about three quarter of its revenue, and its high-margin New Zealand analogue service was switched off.

State-owned Kordia posted a loss of $8.6 million in the 12 months ended June 30, from a profit of $3.7 million in the year earlier period, the Auckland-based company said in a statement. It had forecast a profit of $1.7 million in its Statement of Corporate Intent. Revenue fell 3 percent to $301.4 million, short of its $311.8 million forecast.

Kordia lost about $14 million in annual revenue and $10 million of profits when New Zealand's analogue television network was switched off in December last year. Ahead of the change, the company has been diversifying its earnings by expanding into providing data and voice services for New Zealand businesses including Fonterra Cooperative Group, the country's largest corporate. Kordia has also been expanding in Australia, where it typically gets about $200 million of revenue and $40 million of profit. However it said the Australian business has had a "a very difficult trading year" with margins squeezed, a significant contract ending with negative results, and a high New Zealand dollar crimping returns.

"Despite the analogue switch off and the associated drop in earnings, the Kordia New Zealand business remains profitable and had a strong performance for the year, with growth in both broadcast and telecommunications revenues," the company said in a two-page statement. "This strong performance was offset by Kordia Solutions Australia experiencing difficult trading conditions with the competitor pressure reducing margins, which, combined with some problematic contracts, have impacted profitability during the year."

In the second half of the financial year, the company cut back its Australian business, reducing costs and closing out unprofitable projects, it said. In March, Kordia appointed Ken Benson as the new chief executive of its Australian business, replacing Peter Robson who held the position for 10 years.

The company didn't provide further details of its Australian contract dispute. It has a two-year contract with Australia Pacific LNG worth about $80 million. The company said in March that the mining project's delivery date had slipped to September or October from June but was on track and not at risk of not going ahead.

Kordia didn't detail the revenue and profit for its Australian and New Zealand units.

In New Zealand, the company is facing increased competition from other broadcasters, such as pay-television operator Sky Network Television and Spark New Zealand, previously known as Telecom, which is starting its own subscriber video-on-demand service.

Kordia won't pay a dividend for the 2014 financial year, in line with its forecast, which cited the loss in earnings related to the switch-off of analogue television. It paid a $5 million dividend in 2013 and has flagged a $4.9 million dividend for 2015.

The company had net debt of $60 million at June 30, up from $52.8 million the year earlier, and said it had "plenty of headroom" to fund the ongoing requirements of the business. In July, the sale of its Orcon business to Callplus was completed, with an outstanding loan of $10 million repaid, it said.

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Must Sell 20 Petrol Stations: Z Cleared To Buy Caltex Assets

Z Energy is allowed to buy the Caltex and Challenge! petrol station chains but must sell 19 of its retail sites and one truck-stop, the Commerce Commission has ruled in a split decision that acknowledges possible retail price coordination between fuel retailers occurs in some regions. More>>

ALSO:

Huntly: Genesis Extends Life Of Coal-Fuelled Power Station To 2022

Genesis Energy will keep its two coal and gas-fired units at Huntly Power Station operating until 2022, having previously said they'd be closed by 2018, after wringing a high price from other electricity generators who wanted to keep them as back-up. More>>

ALSO:

Dammed If You Do: Ruataniwha Irrigation Scheme Hits Farmer Uptake Targets

Enough Hawke's Bay farmers have signed up for water from the proposed Ruataniwha Water Storage Scheme for it to go ahead as long as a cornerstone institutional capital investor can be found to back it, its regional council promoter announced. More>>

ALSO:

Reserve Bank: OCR Stays At 2.25%

Reserve Bank governor Graeme Wheeler kept the official cash rate at 2.25 percent, in a decision traders had said could go either way, while predicting inflation will pick up as the slump in oil prices washes out of the data and capacity pressures start to build in the economy. More>>

ALSO:

Export Values Down: NZ Posts Biggest Annual Trade Deficit In 7 Years

New Zealand has recorded its biggest annual trade deficit since April 2009, reflecting weaker prices of agricultural commodities such as dairy products, beef and lamb, and increased imports of vehicles and machinery. More>>

ALSO:

Currency Events: NZ's New $5 Note Wins International Banknote Award

New Zealand’s new Brighter Money $5 note has been named Banknote of the Year in a prestigious international competition. The $5 note was awarded the IBNS Banknote of the Year title at the International Bank Note Society’s annual meeting. More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news