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Aussie Broadband Ltd (ASX:ABB) has seen its share price rise by over 7% in response to its impressive FY24 results. The telecommunications company, known for its broadband services to households and businesses, has reported significant financial growth and continues to expand its market presence.
FY24 Financial Highlights
For the fiscal year ending 30 June 2024, Aussie Broadband delivered robust financial performance:
- Revenue increased by 26.9%, reaching $999.7 million.
- Gross profit grew by 29.4% to $360.6 million.
- Underlying EBITDA surged by 34.5% to $120.5 million.
- Net profit after tax (NPAT) climbed 21.7% to $26.4 million.
- A dividend of $0.04 per share was declared.
Connection Growth
Aussie Broadband's customer base saw notable expansion across various segments:
- Residential connections increased by 13% to 589,123.
- Business connections rose by 19% to 56,431.
- Enterprise and government connections grew by 19% to 2,015.
- Wholesale connections surged 38% to 7,143.
- Total broadband connections rose by 14% to 84,876.
The company attributed this growth to a competitive market environment and a shift in wholesale pricing, which followed the completion of the NBN’s ‘special access undertaking’ process. This shift led to higher wholesale prices and annual CPI inflation adjustments starting from July 2024. Despite these challenges, Aussie Broadband benefited from increased customer churn and competitive dynamics.
Investments and New Initiatives
Aussie Broadband has continued to invest in its infrastructure:
- Added 288 km of new fibre, bringing the total to 1,712 km.
- Connected 300 buildings to its network.
- Launched Buddy Telco, a new low-cost brand.
The company reported that Buddy Telco has connected 2,192 services in its initial six weeks, showing strong customer satisfaction and positive interactions through its digital channels, including Buddy Bot, live chat, and the Buddy app.
Outlook for FY25
Looking ahead, Aussie Broadband aims to drive growth across all its business segments in FY25, targeting earnings growth of 13% to 21%, excluding the Buddy Telco investment. The company has experienced a strong start to the year, with net broadband connection growth of 13,023 in the September quarter.
Aussie Broadband is guiding for EBITDA to be between $125 million to $135 million for FY25, reflecting an expected increase of 3.7% to 12%. The company is also exploring acquisition opportunities to further bolster its growth.
Despite losing the Origin Energy Ltd contract, Aussie Broadband has shown resilience and growth. The company’s continued performance and expansion efforts suggest a positive trajectory for its share price moving forward.
