OT: NWL Report - Part A
NEW TEL LIMITED (NWL)
(Company background)
Preliminary Final Report
Announced on 2000/09/14 09:03:11.
Part:A 955 words
Status: Market sensitive (Y)
Industry Sub Group: Other Telecommunications (184)
--------------------------------------------------------------------------------
NEW TEL LIMITED 2000-09-14 ASX-SIGNAL-G
HOMEX - Perth
+++++++++++++++++++++++++
New Tel Limited is pleased to submit its preliminary financial report
for the year ending 30 June 2000.
Over the past year New Tel has made substantial progress in its move
to become a global telecommunications and internet group,
particularly With the commencement of operations of New Tel's
Australian telecommunications carrier business on 1 July 1999 and the
development of the Company's China interact project. Highlights of
the period include:
* Over 500 per cent increase in sales revenue;
* Almost 500 per cent increase in assets to $103 million;
* Cash reserves of $63 million;
* Achievement of over 35,000 customers in the first year of
operations;
* Completion of a high technology satellite network, linking
New Tel's Sydney switch facility and Perth's satellite earth
station with China;
* Commencement of the development of a leading Internet business in
China in conjunction with Xinhua;
* EBITDA of -$15.6 million consistent with the establishment of New
Tel's new telecommunications business during the year and the
development of the China Internet program.
START OF TELECOMMUNICATIONS CARRIER OPERATIONS
New Tel's telecommunications carrier commenced operations on 1 July
1999 and the financial results reflect initial set up costs for the
establishment of the business, including network infrastructure,
administrative, billing, financial and recruitment expenses, as well
as the normal day to day running costs of the operation.
The Company has secured 35,000 customers over the period. This core
customer base is generating over $1 million in revenue per month and
New Tel is now gearing up advertising and marketing programs to
increase customer numbers and revenue.
In the past year New Tel has focused on two key business areas, each
of which are providing solid revenue streams for the Company.
INTERNATIONAL TELEPHONY SERVICES DIVISION
Long distance international telephony services is a New Tel strength,
particularly the Australian customer base calling into the China
region. The Company will continue to develop this market and other
selected destinations, with the capacity to greatly expand the
services utilising its switch facility.
MOBILE SERVICES DIVISION
This is proving to be an equally strong value-driver for the
business, with the potential to gain solid market share in this
rapidly growing market. The mobile phone services market is highly
competitive however the sector continues to provide strong profit
margins and New Tel has a competitive wholesale cost structure. In
addition, New Tel expects to gain additional revenue through fixed
wire to mobile calls.
These areas are providing a solid foundation for the Company's
business model that is enabling New Tel to target multiple
specialised community groups and cross sell services amongst
customers. In addition, New Tel will be introducing local calls and
ISP services shortly, providing further revenue sources for the
Company.
During the year, New Tel completed the construction of its
international gateway switch and satellite earth station facilities.
The Company commenced initial operations based on switching traffic
to China and located its first carrier international gateway switch
in Sydney. The Siemens EWSD carrier grade switch connects to gateway
switches in China by dedicated satellite links.
During the year, New Tel has entered into several Interconnect
agreements with other Australian based carriers and is also currently
progressing formal negotiations to allow direct connection to the
Australian PSTN.
CHINA INTERNET OPERATIONS
Through its China Internet Agreement with Xinhua signed in November
1999, New Tel has commenced the structuring, financing and
development of a leading Internet Portal and Service Provider
business in conjunction with official Chinese Government agencies.
Under the agreement between New Tel and Xinhua, Xinhua will provide
access to the Chinese internet market through a number of joint
ventures, together with future opportunities, in exchange for shares
in New Tel. In addition, New Tel intends to raise $200 million to
develop and commercialise the existing joint ventures and other
opportunities in the future.
New Tel will acquire a company that provides technical and other
value added services to the joint ventures for which it will receive
fees. New Tel will also acquire a portal business that will have
access to the content of the Internet Content Provider (ICP) joint
ventures together with access to the subscribers to the ISP business.
The portal will be a significant revenue generator in its own right
Full details of the Internet project will be included in the
Information Memorandum and Independent Experts report to shareholders
to be announced upon completion of the final due diligence review
that is currently underway.
MOBILE COMMUNICATIONS
In the mobile data communications products area, New Tel continued to
penetrate the courier and transport markets. As previously announced,
New Tel is considering the public listing of this subsidiary during
the second half of the current financial year.
CAPITAL RAISINGS
During the year almost 50,000,000 shares were issued by New Tel
adding $89 million to The Company's cash base. The Company has also
announced its intention to raise up to a further $200 million through
the placement of shares and/or American Depository Receipts as part
of The China Internet project.
INVESTMENTS
In February New Tel's subsidiary Advanced Engine Components Limited
(AEC) listed on The Australian Stock Exchange. The public offering
was three times oversubscribed reflecting the market's recognition of
the unique worth of the computerised engine technology developed over
the past decade. New Tel currently owns approximately 85% of AEC and
its investment is valued at over $40 million.
In summary New Tel is in a strong financial, operational and
strategic position. The Company has over $100 million in cash and
liquid assets and a developing revenue base. The Board of Directors
fully expects that current business strategies will create even more
shareholder value over the coming financial year.
P Malone
CHIEF EXECUTIVE OFFICER
