Kordia profit climbs post-Orcon

Monday, 2 September 2013, 10:21 am
Column: Bill Bennett

State-owned network business telecommunications specialist Kordia posted a $10.7 million profit on revenues of $309 million for the year to June 2013. The result reflects the company’s ‘continuing operations’, that is, not taking the Orcon business unit, sold in March, into account.

The 2013 profit represents a rise of of 46 percent when compared to the year earlier. In 2012 Kordia’s profit was $7.3 million on revenues of $306.4 million.

Kordia grew out of the government owned operation originally set up to manage television transmission services. For most of its recent the history the company has been preparing for when the analogue TV network switches off – that is due to happen next year and will have a significant effect on the company.

Kordia ‘well-placed’
Group chairman David Clarke says the company is well placed to deal with the analogue TV network closure. “Over the last several years, Kordia Group has improved its core profitability, increased its dividend, reduced its gearing and is ready for the analogue switch off. Gearing reduced to 36 percent at 30 June 2013, from 46 percent at the half year,” he says.

“With net debt at its lowest level for eight years there continues to be plenty of headroom under our bank facilities and covenants to fund continued growth in the business. The performance of the on-going business in FY13 together with the divestment of Orcon has strengthened the balance sheet,” Clarke says.

New Zealand braces for earnings hit…
The analogue switch off will hit 2014 earnings, yet Clarke says Kordia saw solid revenue growth from its telecommunications products, including the core corporate offering, managed WAN product OnKor. He says the company will increase the range of its products and services.

Kordia also reports continued strong demand for digital television transmission services and good growth int telecommunications sector. Clarke says the Kordia Solutions New Zealand business made progress identifying new opportunities both nationally and in the Pacific region.

…while Australia surges
Kordia’s Australian business continues to perform well consolidating the 2012 growth with another year of record revenues. Clarke says the business has driven further into new market segments and expanded its service offering. Significantly 40 percent of the unit’s revenue in 2013 came from services that didn’t exist three years ago.

He says: “The transformation of the business has continued from providing specialist services to becoming a true end-to-end services provider across the entire network deployment value chain. This capability enables Kordia Solutions Australia to work with its customers seamlessly, enhancing value and reducing cost.”

“This growth was underpinned by the progress of work for APLNG in the energy and natural resources market, civil infrastructure design and construction works for mobile operators, and design work for the Australian National Broadband Network (NBN)”, he says.

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ENDS

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Bill Bennett

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