Telecommunications company iiNet has reported a 3.6 per cent increase in revenue thanks to new broadband customers and increasing turnover from small business customers.
However the company has failed to translate the revenue growth into increased profits.
While revenue grew to $493 million in the six months to the end of December, from $473.6 million in the previous corresponding period, net profit before tax fell 12 per cent.
iiNet reported profit before income tax of $39.9 million for the first half of the 2013 financial year compared with $45.5 million in the six months to the end of December 2012.
As a result, earnings per share decreased from 19.8 cents during the half year to the end of 2012 to 18 cents for the same period in 2013.
The fall in profit is attributed to increased network and carrier costs and employee and marketing expenses.
Network costs were up $8 million on the previous corresponding period because iiNet received a rebate on what it calls 'internal interconnection charges' in the 2012 period.
It also incurred nearly $3 million of expenses relating to asset disposal and the acquisition of South Australian-based Adam Internet at the end of August last year.
iiNet paid $60 million for the company. It also finalised the sale of its Australian Capital Territory-based fibre-to-the-node network for $9 million in the six-month period.
Chief financial officer and acting chief executive David Buckingham said that, without the one-off fluctuations, profit would have increased 19 per cent.
He said that following an acquisitive period iiNet was now focused on organic growth.
In the six-month reporting period, the company grew its broadband customer base by 16,000 and continued to grow the number of products per customer.
It also marked a 5 per cent increase in revenue from business customers, which now make up 20 per cent of iiNet’s customer base.
“The half has seen good growth in access and telephony products in the small business segment and we have seen growth in wholesale and contract wins in the ACT,” Mr Buckingham said.
He said while iiNet would retain a core focus on small office and home office businesses and small to medium enterprises, it was also increasing its presence in the government and corporate segment.