Pentanet’s first EBITDA-positive half has failed to keep its shares out of the red following an earnings report on Wednesday.
Pentanet’s first EBITDA-positive half has failed to keep its shares out of the red following an earnings report on Wednesday.
Investors shaved 4 per cent off the internet provider’s share price after it deepened its net loss after tax in 1H25, despite notching revenue and gross profit growth across the business.
The Perth-headquartered telco moved its EBITDA $0.2 million into the green during the half, while group consolidated revenue jumped 6 per cent to $11.1 million over the same six-month period.
However, a $0.7 million impairment related to an equipment swap grew the company's net loss after tax to $3.1 million, a 15 per cent increase compared to the same time last year.
Pentanet shareholders responded favourably to news of an earnings-positive quarter in late January, driving company shares up 66 per cent.
At the time, the company flagged consolidated revenue growth for the half, driven by an uptick in subscriber numbers and gaming income.
The communication services stock also said it was focused on cost-reduction initiatives, such as lowering employee overheads and reducing supplier costs – a measure that contributed to a $0.4 million EBITDA improvement for the half.
Pentanet is investing heavily in expanding its 5G capacity, aiming to double the size of a network servicing more than 700 customers.
So far, the telco has upgraded 14 towers to 5G, with another five slated for completion in FY25’s second half.
In the gaming department, Pentanet credits pricing adjustments and the retirement of its basic membership tier to a 31 per cent jump in division revenue.
Speaking to investors on a Wednesday earnings call, managing director Stephen Cornish said he expects to see financial growth continue through FY25’s second half.
“We’re just a few quarters away from bringing growth back into the business,” he said of the company’s move into EBITDA-positive territory.
When prompted on M&A activity in the telco sector, and whether Pentanet saw itself as a potential takeover target, Mr Cornish said there was still work to be done at the company’s current valuation.
“We have to have the right sized market cap to even play in that sector.”
“We’ve gotten to where we are completely organically. Where we are priced today … I think there’s a lot more that we can deliver.”
Pentanet shares are trading 4.11 per cent lower for 35 cents apiece at 10:04 am AWST.
