How NBN Could be Profitable in FY25.
Background:
- Losses are booked for the last 6 years and are anticipated to continue until FY24.
- Depreciation and Amortisation are a drag on the NPAT and will continue in the $2.9-2.5 Bn range.
- WACC will be around >=2.97%
- Revenue increase (less idle network) is assumed to be 4-5% YoY.
- Cost is anticipated to increase by 5-6% in FY23 and FY24.
How Govt and NBN can make it profitable:
- increase the wholesale price via SAU
- reducing the serviceability of debt (this is now executed where serviceability has been reduced from $1.47 Bn to $0.37 Bn per year)
- migrating <= 50 Mbps tiered users (78%) to >=100 Mbps high-speed internet,
- by applying these levers it can book a profit (NPAT) in FY25, even with a 25% idle network.
My previous post on why the government is worried about NBN after FY23 H1 results can be read here
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