STRONG RISE IN OPTUS PROFITS

Cable & Wireless Optus today announced a 60 per cent increase in after-tax profits to $424 million for the full-year to March 31, 2001.

Underlying profit - earnings before tax and abnormals - grew 26 per cent to $371 million, while revenue rose 19 per cent to $4.9 billion (from $4.1 billion last year).

Chris Anderson, Cable & Wireless Optus Chief Executive, said the key features of the results were strong growth in revenue and profits, carefully managed costs and an increased market share in highly competitive telecommunications markets.

Earnings before interest, tax, depreciation and amortisation (EBITDA) were up 21 per cent to $1,406 million. EBITDA margin improved to almost 29 per cent.

EBITDA rose in all three business divisions.

Mr Anderson said the results showed Optus had matured into a solid performer in all areas of its business.

"Underlying profit performance has been strong, up 26 per cent to $371 million. This includes for the first time our share of profit from the Southern Cross cable network which we invested in three years ago," Mr Anderson said.

"In four years we have had a $1 billion turnaround in profitability. Company value has jumped from less than $4 billion four years ago to $14 billion. Earnings per share increased from seven cents to 11.2 cents in 2000/2001," he said.

"Operating cash is up 75 per cent and our funding requirement has fallen nine per cent. We are putting increasing emphasis on improving cashflow and ensuring capital efficient growth.

"Mobile has reinforced its position as the fastest growing operator in Australia. Optus Mobile is a $2 billion plus business, continually taking market share and delivering a 20 per cent growth in revenue."

In 2000/2001, Optus Mobile added one million new customers to lift its customer base to 3.7 million, growing market share to an estimated 33.3 per cent. Data contributed four per cent of mobile revenue and subscriber acquisition costs per customer fell nine per cent.

"The year ahead holds great potential for Optus Mobile. The introduction of Mobile Number Portability provides a significant opportunity to challenge for customers in the business market," Mr Anderson said.

The Data & Business Services (DABS) division reported a 20 per cent growth in revenue, driven by a 49 per cent increase in Data & IP.

In the past 12 months, DABS has tripled its portfolio of e-solutions products and established a nationwide DSL network through wholly owned subsidiary, XYZed.

A four per cent growth in voice revenue in DABS, despite price declines, can be attributed to strong wholesale revenues and success in taking advantage of 1800 number portability, introduced in December 2000.

In the third division, Consumer & Multimedia, the broadband business enjoyed a 20 per cent boost to customer numbers to 500,000, coupled with a strong rise in average revenue per user (ARPU) to almost $1,000.

A successful product 'bundling strategy' also resulted in an increase in multiple-product customers from 29 per cent to 38 per cent. This was achieved on capital expenditure 24 per cent lower than last year.

Mr Anderson said despite increased competition and a tightening economy, Optus had the products, people and market size to continue to grow in the Australian market.

For more information:
Stephen Woodhill
Cable & Wireless Optus
Phone: 02 9342 7850