Netlink C-suite to take 8% pay cut amid Covid-19 even as DPU rises

FIBRE optic cable owner NetLink NBN Trust has posted a net profit of S$12.5 million in the fourth quarter, down 37.7 per cent from the corresponding quarter the year before, owing to the write-off of S$15.4 million in capitalised project costs relating to a discontinued IT system replacement contract.

Excluding the impact of the one-time write-off, NetLink's net profit would have risen 39.5 per cent to S$27.9 million.

Revenue in the three months ended March 31 was S$92.4 million, up 5.2 per cent from the same period a year earlier.

Higher revenue from residential connections and non-residential connections drove the increase, which was partially offset by lower installation-related revenue, diversion revenue as well as ducts and manhole service revenue.

NetLink achieved close to 1.43 million residential connections as at March 31, 2020, an increase of 7.5 per cent over FY2019.

Fourth-quarter earnings per unit was 0.32 Singapore cents, down from 0.51 Singapore cents in the same period a year earlier.

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Full-year earnings per unit was 2.00 Singapore cents, up from 1.99 Singapore cents in FY2019.

Full-year net profit was S$78.1 million, up 1 per cent from FY2019. Excluding the write-off of S$15.4 million in the fourth quarter, net profit for FY2020 would have risen 20.9 per cent to S$93.5 million.

Residential connections revenue rose 12 per cent to S$231.5 million in FY2019, contributing 62.5 per cent of NetLink's total revenue.

Unitholders will receive a distribution of 2.53 Singapore cents per unit for the six months ended March 31 on June 3, 2020. This is higher than the distribution of 2.44 Singapore cents per unit in the same period last year.

The total distribution per unit (DPU) for FY2020 is 5.05 Singapore cents, up from 4.88 Singapore cents in FY2019.

Also on Wednesday, NetLink NBN Trust said that the chief executive officer, chief financial officer and chief operating officer of the trust manager will take an 8 per cent reduction in base salary with effect from May 1, which will be reviewed after six months or when the Covid-19 situation has stabilised.

NetLink's board members will also take a 5 per cent reduction in their annual board fee "as a show of solidarity and togetherness with our stakeholders", it added.

Netlink said in its results filing on Wednesday: "The Covid-19 pandemic and the uncertainty of its magnitude and duration has presented some temporary operational issues for the NetLink Group. The restriction on NetLink Group's contractors' foreign workforce for example, which included a mandatory Stay Home Order applied to construction sector workers, has affected NetLink Group's capacity to fulfil service requests in late April and May 2020."

However, the temporary delays in fulfilling service requests is not expected to have a material impact on NetLink's revenue, it said: "These new service requests would be fulfilled with the eventual increase in available manpower, once the Stay Home Order is lifted, to undertake such work."

Netlink NBN Trust units closed one Singapore cent or 1.01 per cent higher at S$1.00 on Wednesday before results were announced after market close.