Green Packet Bhd, a wireless networking and telecommunication products provider, has deferred its target of breaking even at the earnings before interest, taxes, depreciation and amortisation (Ebitda) level to the end of this year as opposed to the first quarter of 2011, said its CEO Puan Chan Cheong.
The deferment was due to the more competitive environment and lower price point in the nomadic (portable) broadband segment that its subsidiary Packet One Networks (M) Sdn Bhd (P1) planned to grow going forward, he said during a media briefing yesterday.
“This is in line with the expansion and aggressive customer acquisition (exercise) on the nomadic segment. We see the growth will move the Ebitda positive target towards the end of 2011,” Puan said, adding that the nomadic segment possessed higher growth potential than its fixed counterpart, but at the expense of lower average revenue per user (ARPU).
The Main Market-listed company has aimed for its Ebitda to turn positive since 2008, according to earlier news reports. Its latest fourth quarter results mark its 12th consecutive quarter of losses.
Signs For Turnover?
The group announced its results for FY10 ended Dec 31 yesterday, with revenue growing by 81% year-on-year (y-o-y) to RM394 million, on the back of strong growth in broadband services, solutions (software and devices) and alternative voice services.
Loss before interest taxes, depreciation and amortisation (Lbitda) for 4Q10 was reduced by 73% y-o-y due to a higher subscriber base for the broadband business, new customers secured for the solutions business, and more stringent cost control. However, the company’s Lbitda for 4Q10 increased 13% quarter-on-quarter due to higher spending on subscriber acquisition activities and to increase its share in the broadband market.
According to Puan, the increased Lbitda in 4Q10 was due to the expansion and aggressive customer acquisition in the last quarter of 2010.
Total Lbitda for FY10 decreased by 34% from RM119 million to RM78.4 million from FY09.
The group recorded a slightly lower net loss of RM134.97 million for the full year, compared with RM182.65 million in 2009, mainly due to its investment in P1’s network, subscriber acquisition activities, and its focus to increase market share with on-the-go broadband users.
Puan also said Green Packet would continue to invest RM200 million to RM250 million this year in capital expenditure as part of its target to build an additional 650 sites to reach 1,600 by year-end and hitting slightly more than 50% of population coverage nationwide.
Where Are The Money Came From?
The company’s balance sheet has improved after the issuance of convertible preference shares to SK Telekoms Co Ltd last year, which raised RM322.92 million.
To recap, it had between August 2009 and January 2010 raised close to RM170 million through rights issues and share placements in part to fund its operations.
Upcoming Prospects
Puan said Green Packet was targeting 25% growth in revenue this year on the back of its plan to achieve 450,000 subscribers. It plans to expand its base stations to more than 1,600 sites to cover 55% of the population nationwide this year.
In addition, Puan said the company aimed to secure two major US operators this year after it successfully inked a pact with Time Warner Cable to use its customized versions of Green Packet’s Intouch connection manager, Intouch reporting server and Intouch update server for Time Warner’s Windows and Mac platforms.
Written by Kamarul Azhar & Yantoultra Ngui Yichen
It has been 3 consecutive years that GPACKET is in red. Will GPACKET turns green by 4Q11? Perhaps we should give Puan another chance. All the best, Puan and GPACKET!
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