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

 

Cosmetics & Pollution: Proposal To Ban Microbeads

Cosmetic products containing microbeads will be banned under a proposal announced by the Minister for the Environment today. Marine scientists have been advocating for a ban on the microplastics, which have been found to quickly enter waterways and harm marine life. More>>

ALSO:

NIWA: 2016 New Zealand’s Warmest Year On Record

Annual temperatures were above average (0.51°C to 1.20°C above the annual average) throughout the country, with very few locations observing near average temperatures (within 0.5°C of the annual average) or lower. The year 2016 was the warmest on record for New Zealand, based on NIWA’s seven-station series which begins in 1909. More>>

ALSO:

Farewell 2016: NZ Economy Flies Through 2016's Political Curveballs

Dec. 23 (BusinessDesk) - New Zealand's economy batted away some curly political curveballs of 2016 to end the year on a high note, with its twin planks of a booming construction sector and rampant tourism soon to be joined by a resurgent dairy industry. More>>

ALSO:


NZ Economy: More Growth Than Expected In 3rd Qtr

Dec. 22 (BusinessDesk) - New Zealand's economy grew at a faster pace than expected in the September quarter as a booming construction sector continued to underpin activity, spilling over into related building services, and was bolstered by tourism and transport ... More>>

  • NZ Govt - Solid growth for NZ despite fragile world economy
  • NZ Council of Trade Unions - Government needs to ensure economy raises living standards
  • KiwiRail Goes Deisel: Cans electric trains on partially electrified North Island trunkline

    Dec. 21 (BusinessDesk) – KiwiRail, the state-owned rail and freight operator, said a small fleet of electric trains on New Zealand’s North Island would be phased out over the next two years and replaced with diesel locomotives. More>>

  • KiwiRail - KiwiRail announces fleet decision on North Island line
  • Greens - Ditching electric trains massive step backwards
  • Labour - Bill English turns ‘Think Big’ into ‘Think Backwards’
  • First Union - Train drivers condemn KiwiRail’s return to “dirty diesel”
  • NZ First - KiwiRail Going Backwards for Xmas
  • NIWA: The Year's Top Science Findings

    Since 1972 NIWA has operated a Clean Air Monitoring Station at Baring Head, near Wellington... In June, Baring Head’s carbon dioxide readings officially passed 400 parts per million (ppm), a level last reached more than three million years ago. More>>

    ALSO:

    Get More From Scoop

     
     
     
     
     
     
     
     
    Business
    Search Scoop  
     
     
    Powered by Vodafone
    NZ independent news