NBN Co loss deepens to $696M as revenue hits $2.8B

NBN Co’s loss for the first half of the 2024 financial year has deepened to $696 million in the red, while total revenue reached a positive $2.8 billion.

The loss, according to the National Broadband Network (NBN) builder, mostly consists of three factors: the loss in depreciation and amortisation increasing by 10 per cent to negative $1.6 billion, net finance costs increasing by 16.6 per cent to a loss of $917 million and tax expenses increasing exponentially, from a benefit of $6 million last period to expenses of $147 million.

Meanwhile, revenue over the six-month period to 31 December 2023 rose by 4.8 per cent to the $2.8 billion mark, up from $2.6 billion a period prior, and earnings before interest, tax, depreciation and amortisation (EBITDA) were up 9.9 per cent to just under $2 billion.

NBN Co claimed the results indicate it is on track to meet its FY24 guidance, aiming for revenue to land within $5.3 billion to $5.5 billion and EBITDA of $3.7 billion to $3.9 billion.

NBN CO CEO Stephen Rue said the biggest milestone for the network builder was the acceptance of its Special Access Undertaking (SAU) variation, which was accepted by the Australian Competition and Consumer Commission (ACCC) in October 2023.

“This landmark outcome follows two years of detailed consultation, which delivers a new approach to wholesale pricing, supports faster internet speeds, greater data demand and improved cost certainty for retailers and customers. Importantly, the SAU provides long-term regulatory predictability,” he said.

Two months after this, it then launched its latest wholesale broadband agreement (WBA5).

Additionally, NBN Co said in order to finance its FY24 corporate plan and settle future liabilities, is planning to raise additional domestic and international debt and expects its financing strategy to be achievable based on “its strong investment grade credit rating and the outcomes of recent financing transactions”.

In response to this, Ian Chitterer, VP at global credit ratings, research and risk analysis provider Moody’s Investors Service said he expects a slight improvement in NBN Co’s credit profile as increasing EBITDA and operating cash flow are offset by high levels of capital spending to improve the network.

“NBN’s available liquidity of $7.3 billion is a credit positive, as it alleviates refinancing risk related to the $5.5 billion outstanding under its Commonwealth loan maturing on 30 June 2024,” he added.

​On the network itself, the half-year closed with just under 8.58 million homes and businesses connected, up from 8.56 million in FY23. Additionally, 12.38 million premises are ready to connect, up from 12.29 million. Of these, 8.48 million can access NBN Home Ultrafast speed tier plans, up from the last financial year’s 6.9 million. The number of wireless cells added to its fixed wireless network also increased, going up 37 per cent to 13,371.

“Almost 200,000 Australian premises have chosen to upgrade to a NBN full fibre service, which has been made possible by our network investment strategy. This demonstrates customers’ strong appetite for high-speed internet amid the consumption of increasing volumes of data,” Rue added.