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Vocus cuts guidance after HY profit fall

Simone Ziaziaris  |  20 Feb 2018Text size  Decrease  Increase  |  
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SYDNEY - [AAP] Vocus Group (ASX: VOC) has revised its earnings guidance for the full year after its half-year net profit fell 21 per cent, and due to a reduction in costs that can be deferred.

The group's $37.3 million profit for the six months to December 31 is down from $47.1 million a year ago, although revenue has risen nine per cent to $967.3 million.

Australia's fourth largest telco has maintained its revenue guidance for the full year but says it now expects underlying earnings to be between $365 million and $380 million, rather than $370 million to $390 million previously forecast.

"This revision primarily relates to the Australian consumer division facing headwinds in H2FY18 (the second half of the 2018 financial year) due to over hedging of its energy portfolio and a change in its go-to-market strategy," Vocus said.

The company on Tuesday said that would cut the amount of subscriber acquisition costs that can be deferred.

As a result, its expectations for underlying profit for the full year was cut to between $125 million and $135 million, from $140 million-$150 million.

Vocus also announced there would be no interim dividend in light of the competing demands and opportunities for capital investment across the business.

"The board of Vocus expects to review future dividend payments in line with the growth of the business, taking into account the capital requirements and accretive infrastructure opportunities available at any point in time," the company said.

Vocus' enterprise and wholesale division grew revenue by 2.5 per cent, driven by strong growth in data networks.

Its consumer division also delivered revenue growth, of 5.7 per cent, with broadband revenue boosted by the growing number of customers migrating to the national broadband network.

VOCUS CUTS GUIDANCE AFTER PROFIT SLUMP:

* Net profit down 21pc to $37.3m

* Revenue up 9pc to $967.3m

* No interim dividend declared 

 

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© 2020 Australian Associated Press Pty Limited (AAP) or its Licensors. This is the Morningstar service with content provided by AAP where indicated. AAP reserves all rights, including copyright, in services provided by it. The information in the service is for personal use only, does not constitute financial product advice (whether general or personal) and may not be re-written, copied, re-sold or re-distributed, framed, linked or otherwise used whether for compensation of any kind or not, without the prior written permission of AAP. You should seek advice from a professional financial adviser before making decision to acquire or dispose of a financial product.

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