Aussie Broadband share price plummets 18% despite record revenue, earnings

The Aussie Broadband Ltd (ASX: ABB) share price has plunged in early trade after the company released its 2022 financial year results on Monday morning.

No doubt caught up in the general sell-off of growth shares after United States Federal Reserve chair Jerome Powell’s comments over the weekend, at the time of writing Aussie Broadband shares are down 18.47% to $2.56.

What did the company report?

• Record revenue, up 56% to $546.9 million
• Record earnings before interest, taxation, depreciation and amortisation (EBITDA), up 107% to $39.4 million
• Net profit after tax (NPAT) up 118% to $5.3 million
• Total broadband connections up 46% to 584,793
• NBN broadband market share (excluding satellite) up from 4.74% to 6.46%

What else happened in FY22?

The big event for Aussie Broadband was its acquisition of IT solutions provider Over the Wire Holdings Ltd, which was also formerly listed on the ASX. That $344 million deal wrapped up in March.

Aussie Broadband also continued building out its own dark fibre network, which gives it independence from the larger wholesale telcos. That project is 90% complete, according to Monday’s financial report.

What did management say?

Aussie Broadband co-founder and managing director Phillip Britt said:

I am extremely proud of the work the whole team has put in to deliver these outstanding results. We have achieved strong growth in revenue, earnings and market share, and are well positioned to achieve our goal of becoming Australia’s fourth largest communications company providing a full suite of solutions across enterprise, wholesale, residential, and government sectors.

Aussie has come a long way from our early days as a residential internet service provider. Today we are growing a complete communications and technology solution across multiple market sectors. This enables us to develop closer relationships with a broader range of customers while also driving increased profit margins. 

What’s next?

Aussie Broadband has forecast 2023 financial year revenue to fall between $800 and $840 million. 

After growth in enterprise and government clientele plus full integration of Over The Wire, the EBITDA margin will be around 10% to 10.5%, which is up from 7.2% for the 2022 financial year.

Aussie Broadband share price snapshot

Like most technology shares, the journey for the Aussie Broadband share price has been on a stomach-churning ride this year.

The stock has more than halved since mid-April, and is down 46% since the start of 2022.

The post Aussie Broadband share price plummets 18% despite record revenue, earnings appeared first on The Motley Fool Australia.

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• Aussie Broadband share price plunges 15% as quarterly results fail to impress

Motley Fool contributor Tony Yoo has positions in Aussie Broadband Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Aussie Broadband Limited. The Motley Fool Australia has recommended Aussie Broadband Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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