Aussie Broadband provided investors with a strong trading update for the December quarter, posting solid growth numbers across all business units.
ABB highlight that broadband connections increased 11% in the second quarter, while business broadband connections increased 13% on the previous quarter. Mobile services for the period also increased 9% from the previous quarter, jumping from 29,560 to 32,207 services.
Overall revenue grew 11% quarter on quarter, with wholesale and white label services increasing by 188% including 8,725 white label migrations. NBN CVC charges decreased by 45% over the previous quarter due to easing of lockdowns, and CVC management.
ABB expects broadband net additions of 85-95k for the second, including the migration of white label services, with total active broadband connections at 30 June 2022 to be in the range of 580-590k. Although this is dependent on marketing activities and the relative competitive environment through the period.
Dull year EBITDA is expected to be in the range of $27-$30 million with second half performance likely driven by:
Comparable marketing costs but with the benefit of a full half of revenue from 1H FY22 acquired customers;
Employee and administration costs being lower as a percentage of revenue in 2H FY22;
Continued growth in connections and other services;
No further lockdowns leading to increased CVC usage;
Completion of the white label connection migrations.
Managing Director, Phillip Britt commented, “The company continues to strategically invest in growth to drive the longer-term value of the business. Whilst first half EBITDA has been impacted by increased costs, we expect to see the benefits of operating leverage in 2H FY22. The second half will also benefit from the organic connection growth achieved in the first half, additional white label migrations. This validates our strategy of continuing to invest in connection growth at the expense of short-term EBITDA gains.”