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Local fibre company Tuatahi First reported a positive performance for the year to the end of 31 March 2024, with revenue rising from $119 million to 136 million.
On paper at least, a $43.3 million turnaround from a net loss of $15.6 million in 2023 to a profit of $27.7 million in 2024 appears even more impressive.
Chief executive John Hanna, however, told Reseller News the company typically assessed its financial performance through earnings before interest, taxes, depreciation and amortisation (EBITDA).
With a $36.3 million positive network revaluation being booked during the year, that makes a lot of sense. On that basis, EBITDA still increased by just over $13 million year-on-year, from $80 million to $93.3 million.
Similarly adjusted, Tuatahi First’s underlying net profit after tax was $11.9 million, up from $4.7 million in 2023.
Tuatahi’s improvement was driven by ongoing connections growth and higher average revenue per user, partially offset by inflationary pressures on expenses, Hanna said.
Tuatahi First also agreed to buy Unison Fibre in October 2023, expanding into Hawke’s Bay, Taupo and Rotorua in the process.
The acquisition was positive in the 2024 financial year, however, its impact was relatively immaterial due to its comparatively small connection base and its contribution for only two months, Hanna said.
Unison contributed just $2.8 million in 2023 revenue to its former parent, energy company Unison Group, up from $2.5 million in 2022.
According to numbers from the Commerce Commission, Tuatahi is NZ’s fifth largest telco overall, behind Spark, One NZ, Chorus and 2degrees.
The company’s results come against a backdrop of potentially major regulatory changes that could unleash local fibre companies and allow them to enter new markets.
Local fibre companies (LFC) established during the now completed Ultrafast Broadband rollout are seeking changes to their constitutions to expand operations and even offer certain retail services.
A discussion document released by the the Ministry of Business, Innovation and Employment (MBIE) earlier this month said with the completion of phases one and two of the of the Ultrafast Broadband project, LFCs had raised questions about their role in telecommunications markets and restrictions in their constitutions.
The LFCs are Enable, Tuatahi First Fibre and Northpower Fibre, all of which have rolled fibre out within specified geographic areas while Chorus did the same for the rest of the country.
Where Chorus was regulated, the LFCs were restricted in their activities, such as providing retail services, through their constitutions.
“We agree that the completion of phases one and two of the UFB build is an appropriate time to consider questions about constitutional settings for the other LFCs,” MBIE wrote, inviting feedback to inform the government’s position.