OPTUS Australia Dec 22 Results
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Optus faced multiple challenges in 2022, including recovering from the impacts of COVID and a major data breach in September that resulted in the loss of 65k customers. While Optus recovered those customers within 1-2 quarters, the data hack significantly damaged their brand equity and increased financial pressures. Going forward, Optus' leadership will need to determine how to rebuild brand trust and identify growth strategies to revive the business. In Q3 2023, Optus showed positive signs as the impact of the cyber attack was contained and net connections grew again since December 2022.
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OPTUS Australia Dec 22 Results
- 1. Updated: Mar 2023 OPTUS Australia – Dec 22 Results
- 2. General High Low Revenue Volatility High Hazardous Rollercoaster Stagnant Low 5 Year Annualised Growth Optus Attributes (End of March Fin. Year) FY 19 FY 20 FY 21 FY 22 Revenue in Billions by (Size) $SGD 17.4 16.54 15.65 15.4 Profit in Billions (NPAT) $SGD 3.09 1.07 0.55 1.95 Growth (CAGR% 4 years) (3.01) Share of Economy (%) • Optus is facing multiple challenges, while it was trying to recover from the subdued performance it suffered during the COVID, it was impacted by a data hacking issue in Sep 2022. • This incident has shrunk their brand equity, and customers have lost faith. Hence, 65K customers have churned; in particular, the Mobile business suffered at least in the short term • Optus have recovered from their loss of 65K in 1-2 quarters, which is not only surprising but commendable. It is worth pointing out that the price rise has assisted in cushioning the effect. • Having said that, the data hack has impacted their brand equity and has further strained their finances and balance sheet. • Singtel board and exec team need to make a call if they can recover the brand equity or if it is time to rebrand or sell the business or increase its, MVNO or white label, share like Amaysim. Challenges : • Brand Equity is negligible • Revive customer faith ? • How to revive its business for growth and what levers to employ Source: IBIS, Singtel, NBN Co, AFR, Gov.au Optus Where are we Today – 2023 Blue Chip
- 3. General Optus Today Q3 FY23 – Market Response Key Message • Impact of cyber attack contained within Q3 FY23, positive net connections from Dec 2022. • Revenue has slipped, not a surprise, with 65K subscribers lost to the competition and recovered, so to get new customers and win back, a lot of incentives (like credits and price discounts) had to be given, hence this impact (Rev numbers are not shared only % is highlighted). • EBITDA has improved driven by growth in mobile & fixed, assisted by the price rise in Q2 and recovery in roaming. • Cost synergies from Optus Enterprise integration. • Amaysim is leading the AU MVNO market, with aggressive pricing in the prepaid market, but poor onboarding.
- 4. General Optus Today Q3 FY23 – Market Response Key Message • The cyber attack's impact (Sep 22, 2023) is addressed at a war pace. • The no of subscribers lost (65K) is not seen in the final numbers.
- 5. General Singtel Today FY23 – Market Response • Optus is part of Singtel group. Not much can be inferred about Optus from here. Key Indicators • Market Cap – $SGD 40.43 Bn • P/B – 1.47 • P/E (Trailing) – 18.79 (Growth) • P/E (Forward) – 16.79 (Growth) • Rev (FY 21) - $SGD 14.75 Bn • Income (FY 21) – $SGD 1.96 Bn Covid Optus Security Attack
Editor's Notes
- FY2021: A$108 million and FY2022: A$69 million, Result Highlights 1H Revenue rose 46% to $1.3bn EBITDA was -$477m, improving 65% v. 1H/18 1H CAPEX spend was $2.9bn, up 2% from 1H/18, which focused primarily on the HFC, FttC & FttN network roll-outs. ARPU rose $1 to $45 Ready to Connect premises were 8.1m (up 32%), with active services reaching 4.7m, up 38%, (of which FttC were ~300k). As of January, 57% of activations are on 50mbps or higher speed tier plans. Right first time installs were 93% for the Dec qtr., dipping slightly from 94% in the Sept qtr. Mgt. Briefing Highlights Any 5G threat? – Stephen Rue (CEO) highlighted the vast majority of data (~97%) is transmitted over fixed networks. He said he sees the trend of growing demand for data continuing on fixed networks as much as in mobile networks. NBN Write-down? - Stephen Rue responded to questions about a write-down commenting there was no accounting need for a write-down, arguing calls for a write-down were really about a wholesale price reduction. He said the NBN needs a strong business model & cashflows to ensure the future of the network. And he used the opportunity to highlight that the conversation needs to move to how the NBN contributes to people’s lives in various ways (e.g. improvement in access to data & information, supporting people build businesses & operate from any location, healthcare improvements, education quality benefits etc.). New Product launch – NBN expect to launch the new Wholesale Wireless Product in market by mid-2019, which will have max. download capability of 60mbps, & upload of 20mbps. For anyone interested, more results detail can be found by clicking here.