Question 1

Is the current revenue growth sustainable or driven by one-off projects?

Accepted Answer

While group revenue rose 1% to $974.2 million, the growth is structurally fragile. The 27% increase in Networks revenue was primarily fueled by $69.1 million in non-recurring project revenue from subsea cable builds rather than high-margin recurring services.

Question 2

How severe is the margin compression across the group?

Accepted Answer

Profitability is tightening significantly, evidenced by a 29% decline in underlying NPAT and a group EBITDA margin of 18.1%. Underlying EBITDA fell 7% to $176.4 million as rising NBN costs and legacy declines offset top-line gains.

Question 3

What is the outlook for the consumer broadband business?

Accepted Answer

The segment is facing a profitability crisis despite volume growth. Although NBN subscribers grew 25% to 324,000, total consumer revenue dropped 12% to $350.4 million, driven by a 37% collapse in legacy voice revenue and unsustainable CVC costs.

Question 4

Which business units are providing the most reliable growth?

Accepted Answer

New Zealand is the standout performer, delivering a 4% revenue increase to NZ$188.2 million and a 10% rise in EBITDA. This performance provides a necessary hedge against the Australian SMB segment, which saw revenue plummet 27% to $88.6 million.

Vocus 1H19 earnings update: Losses in both Consumer and Business

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