Kordia Group has posted a loss of $8.6 million for the year ending June 30 – down 336% on last year's $3.7 million profit.
The state-owned telecommunications and broadcasting company says while the New Zealand operation exceeded its revenue and profit targets for the full year – despite the switch off of the high margin analogue service – those results were dragged down by Kordia Solutions Australia.
Kordia says the Australian operations experienced 'difficult trading conditions with the competitor pressure reducing margins, which, combined with some problematic contracts, have impacted profitability during the year'.
The result will be a blow for the company, which had forecast a profit of $1.7 million in its statement of corporate intent.
Instead, revenue fell 3% to $301 million.
The new financial year did however start with one positive, with the sale of Orcon to Callplus – completed on 02 July – seeing an outstanding loan of $10 million repaid to Kordia in full.
Kordia says the New Zealand business remains profitable and had a strong performance for the year, with growth in both broadcast and telecommunications revenues, despite the analogue switch off and the associated drop in earnings.
Australia, meanwhile, saw the appointment of a new CEO – Ken Benson – and a 'right-sizing' of the business in the last half of the financial year, with costs cust and loss making projects closed out.
The Group FY2014 results were further hampered by the strengthening New Zealand dollar in FY14 reducing the Australian results in New Zealand dollar terms when consolidating, Kordia says.
The company notes that net debt was at $60 million at 30 June, 2014, but 'there continues to be plenty of headroom under the Group's bank facilities and covenants to fund the on-going requirements of the business'.