EFTel has forecast a loss making December half of over $2 million as it enters into a partnership with internet service provider Dodo to help deliver its BroadbandNext network.
EFTel has forecast a loss making December half of over $2 million as it enters into a partnership with internet service provider Dodo to help deliver its BroadbandNext network.
Perth-based EFTel said it expects its profit to be negatively affected by a falling Australian dollar, considerable investment in the BroadbandNext Network and a possible write-down.
The company said it expects revenue for the first half of the 2009 financial year to pass $19 million and net profit after tax to be a loss of between $1.5 million and $2.5 million.
Earlier this year, EFTel reported a NPAT of $146,000 for the 2007 December half, while annual profits reached $271,000.
Meanwhile, EFTel has signed its third partnership deal for delivery of its BroadbandNext network for November after signing deals with NEXTEP, a division of NEC, and Wideband Networks.
Dodo chief executive Larry Kestelman expects the network to continue to drive "quality gains" for the company.
"Our major investment in customer contact resources has been paying dividends in rapidly improving customer service levels, and we expect that the addition of EFTel's state-of-the-art BroadbandNext network will continue to drive quality gains for Dodo," Mr Kestelman said.
EFTel has marketed BroadbandNext as a new broadband network that provides users with the fastest DSL internet speeds.
Shares in EFTel were still locked in a halt, last trading at 4.4 cents.
At the company's annual general meeting today, EFTel chief executive Simon Ehrenfeld accepted the position of executive chairman, less than two weeks after a spectacular extraodinary meeting was held in a bid to oust him.
Mr Ehrenfeld's acceptance is in line with a number of changes at the board level, with John Lane taking over as chief executive and directors Jurgen Steinert and Jeremy Cousins to retire.
Mr Ehrenfeld said over the next four weeks, the company will be on the lookout for further independent directors with a view to establish a board with an independent majority.
Both announcements are pasted below:
EFTel Limited (ASX Code: EFT) advises that it expects profit for the December half to be negatively affected by the Australian currency devaluation, heavy investment in growing the BroadbandNext network, and a possible goodwill write-down.
Considerable costs associated with the ramp-up of the BroadbandNext network are being booked during the period, including an intense one-off marketing campaign that was conducted in BroadbandNext areas.
The current half will also see EFTel generate record revenue.
Giving consideration to the variability of currency and other factors, the company estimates that revenue for the first half will pass $19M and NPAT will be a loss in the vicinity of $1.5M to $2.5M.
EFTel CEO Simon Ehrenfeld said that the company has responded decisively to the current challenges.
"We have engaged in heavy rationalisations while ramping up our Malaysian operation, as well as the BroadbandNext network. Both of these initiatives are delivering superior services and lower costs."
"The company is well on track to returning to positive and growing EBITDA in the second half," he said.
EFTel Limited (ASX Code: EFT) and Dodo have signed a strategic partnership agreement between the companies, delivering Dodo access to EFTel's new BroadbandNext network.
The deal follows closely on the heels of the strategic partnerships between EFTel and NEXTEP, and between EFTeland Wideband, which will extend the BroadbandNext footprint to around 140 exchanges nationally.
Dodo is one of Australia’s largest and best-known Internet Service Providers, offering broadband Internet access, fixed-line and mobile telephony services, web hosting, and mobile broadband, to consumers and business customers throughout Australia.
Dodo CEO Larry Kestelman highlighted the quality of the BroadbandNext network.
"Dodo is committed to continuous improvement of our offerings and our service levels," he said.
"Our major investment in customer contact resources has been paying dividends in rapidly improving customer service levels, and we expect that the addition of EFTel's state-of-the-art BroadbandNext network will continue to drive quality gains for Dodo."
"I have every confidence that today’s deal will be the commencement of an enduring and prosperous partnership between two Top 10 national ISPs. We always look to the long term in any supply arrangement, and EFTel has invested in the latest technology."
EFTel CEO Simon Ehrenfeld said today that EFTel views its investment in BroadbandNext as establishing a platform for independent ISPs to collaborate for mutual benefit.
"EFTel has developed a substantial broadband footprint, while Dodo possesses powerful sales and marketing capacity, so the partnership makes fundamental sense," he said.
EFTel's BroadbandNext MSANs will support VDSL2, ADSL2+, traditional ADSL, SHDSL corporate solutions, normal PSTN Voice services, IP Video, VoIP, and 'Naked DSL'.
