Business

Friday November 13, 2009

Green Packet CEO says losses are short term

By YVONNE TAN


PETALING JAYA: Green Packet Bhd reported a higher net loss of RM31.8mil for its third quarter ended Sept 30 against a net loss of RM10.3mil for the same period last year due to continued heavy promotional activities and investment costs related to the development of its 4G (Worldwide Interoperability for Microwave Access or WiMAX) business.

Revenue for the period however was higher at RM63mil versus RM18.2mil in 2008 while loss per share stood at 8 sen and 3.2 sen respectively.

“The losses are ‘technical, planned’ losses,” group managing director and chief executive officer CC Puan told a media briefing yesterday.

“We are sacrificing short-term profits for long-term gains,” he said.

To-date, the mobile broadband networking solutions provider has spent more than RM337mil in capital expenditure to develop its 4G business which is parked under Packet One Networks (M) Sdn Bhd (P1).

Puan said the P1 planned to spend another RM650mil within the next two years to develop the network and enable it to provide up to 65% coverage of Peninsular Malaysia’s population by 2011. Currently, P1 has 35% network coverage in the peninsula.

The company also had plans to extend its network to East Malaysia and Singapore next year, he said.

Puan said P1’s current subscriber base stood at “more than 100,000” from 10,000 as at the end of last year and the company was on track to meet its target of 200,000 by the end of next month.

“It’s a stretched target but we are on track,” he said.

In the third quarter, PI’s net adds were 36,000 against 25,000 in the second quarter, a growth of 44%.

“P1 WiMAX launched its services less than two year ago and already, we are recognised as one of the top four 4G WiMAX operators in the world,” he said.

Puan said he expected Green Packet to return to the black in the second half of next year with PI targeted to break even (in terms of earnings before interests, taxes, depreciation and amortisation) by the first quarter of 2010.

On the other pillar of Green Packet’s business – the product and solution business which was currently profitable, Puan said he targeted shipments of customer premises equipment to overseas markets to increase to 1.5 million units next year from about 200,000 currently.

The company, he said, targeted sales to total US$97.5mil (RM329mil) based on the average cost of US$65 per equipment.

For the nine months to Sept 30, Green Packet made a net loss of RM81.9mil compared with a net loss of RM17.9mil a year earlier. Revenue was RM161mil against RM63mil.


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