Press Release – Kordia
The Kordia Group has posted a strong second half net profit after tax of $4.7m before restructuring costs, which reversed the first half loss and produced a full year net profit after tax of $1.1m before restructuring costs. Restructuring costs of …
Kordia Group Posts Strong Ssecond Half Profit
The Kordia Group has posted a strong second half net profit after tax of $4.7m before restructuring costs, which reversed the first half loss and produced a full year net profit after tax of $1.1m before restructuring costs. Restructuring costs of $2.2m after tax, driven substantially by redundancies in the New Zealand engineering consultancy business, resulted in a full year overall net profit after tax loss of $1.1m on revenues of $254m.
Kordia CEO Geoff Hunt says that this result is particularly pleasing given the difficult economic times, and the recent high levels of capital investment Kordia has made in the telecommunications and related sectors.
“We have been through a very challenging last 18 months which has seen us transform Kordia Group from a sunset, analogue, broadcast-centric business to a technology, media and telecommunications business with new services and products implemented to produce sustainable profit flows into the future.
“Today, our revenue mix has changed dramatically. The service offerings from the New Zealand businesses are strongly weighted towards the telecommunications market, with our rich broadcast heritage remaining one of our key differentiators.
“In Australia, Kordia Solutions is operating an excellent and well-respected business that is achieving over 80 per cent of its revenue from activity in the telecommunications market.
“Kordia Networks in New Zealand is re-energised and focused on developing business in the corporate and ICT sector through a number of new offerings like OnKor™ (carrier Ethernet) and KorKor™ (integrated, two-way, digital radio). Orcon continues to grow at more than 30 per cent per annum, and is likely to turn over in excess of $52m this year,” says Hunt.
Hunt says that Kordia is now focused on improved customer service, and leveraging its recent investments for a more profitable future. He cites the development of a new fibre-optic cable from Auckland to Sydney as another potential string to Kordia’s bow.
“What is compelling about the OptiKor™ trans-Tasman cable initiative is the fact that Kordia’s project development work has provided a catalyst for real competition in the wholesale international bandwidth market,” he says
Over the last three years, Kordia has invested a total of $167.2m in the transformation of the business from pure broadcast, to a broader telecommunications, media and technology offering, while continuing to pay the shareholder dividends totalling $26.0m.
Over the next three years, Kordia will focus on driving returns from its network business investments and reducing debt to provide a gearing of approximately 40 per cent, down from the current 52.1 per cent. ROI is forecast to rise steadily over the next three years.