Superloop Announced 1HFY19 Results and Placement & Entitlement offer to Raise Capital Around $30.87 Mn

Connectivity services provider, Superloop Limited (ASX: SLC) has announced its half year results for FY 2019. During the half year period, the company generated a net loss after tax of $8.7 million which is 390% higher than the loss reported in the previous corresponding period (pcp). The company’s EBITDA was $4.5 million in 1H FY19 as compared to $7.5 million in pcp, representing a decline of 40%.

For the half-year period, the company has reported Revenue from ordinary activities of $60.3 million which is 18% higher than the previous corresponding period.

The company’s revenues are generated from three operating segments- Connectivity, Broadband and services. In the half-year period, Connectivity segment revenue increased by 7% to $25.2 million as compared to pcp. The revenue in Broadband Revenue increased to $20.3 million for the period versus $9.8 million in pcp, representing a growth of 107%. The Services’ Revenues declined to $14.1 million for the half-year period versus $18.0 million in pcp, driven by lower equipment & software re-selling and reflecting the group’s strategic focus on leveraging the company’s network differentiators in networks versus IT services.

While providing the Sales & Operational Highlights for the half-year period, the company informed that its Sales momentum is accelerating with a strong order book of contracted connectivity services expected to commence billing in 2019.

During the half year period, the company invested $40 million in property, plant & equipment and intangible assets which includes $15 million for the INDIGO subsea cable system, plus further capital expenditure on rolling out ‘RED’ national backbone connecting to NBN and expansion of Singapore & Hong Kong.

While providing the Broadband Outlook for H2 FY19 & beyond, the company informed that it has completed the connection into NBN points of interconnection which will reduce off-net costs for the company and it will create higher margin, faster and more reliable internet.

On 25 February 2019, the company launched a $30 million capital raising program to strengthen its balance sheet. This capital raising will reduce the company’s net debt, and it will allow the company to take advantage of near-term opportunities including infrastructure investment, network expansion, and the acquisition of cash-generating assets, and provide general working capital.

As per the company’s announcement, the company is going to raise $15 million through an Institutional Placement. Additionally, the company is also going to raise $15.87 million through a fully underwritten one for 18 accelerated non-renounceable Entitlement Offer. The Offer Price is $1.25 per new Superloop share which is representing a 19.6% discount to the closing price of Superloop shares on 22 February 2019, and an 18% discount to the TERP. The record date for Retail Entitlement Offer is set at 27 February 2019 and the announcement of results of Retail Entitlement Offer is scheduled to happen on 25 March 2019, followed by the Settlement of the Retail Entitlement Offer on 26 March 2019. And, it is expected that the new share will be started normal trading on ASX on 28 March 2019.

QMS’s shares traded at $1.555 with the market capitalization of circa $352.04 million as on 25 February 2019.


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