Amaysim shares slump after revenue per user declines

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Amaysim shares slump after revenue per user declines

Amaysim's share price took a tumble Thursday after the telco revealed that its average revenue per mobile user had fallen by seven percent.

Shares slid from $2.23 each at the end of trading on Wednesday to $1.75 at the time of writing, a drop of more than 20 percent.

The telco announced its preliminary results for the half-year ending 31 December 2017, with revenue of approximately $292-$294 million. Underlying earnings for the six-month period was $17-$18 million.

While Amaysim managed to grow its mobile subscriber base by 10 percent to 1.1 million, mobile ARPU was down by seven percent to $22.46, with mobile revenue dropping by the same amount.

The company pinned the drop on its broadening mobile portfolio, resulting in existing customers switching to cheaper plans and purchasing fewer data top ups.

Chief executive Julian Ogrin said the company would continue to focus on growing its subscriber base as part of its multi-vertical approach, which also includes consumer NBN broadband and energy.

"Our focus on top-line growth, cross-selling products to our subscriber base and increasing share of the household wallet remains unchanged. We are using Amaysim's highly competitive mobile products to bring in new subscribers and we will market our higher ARPU energy and broadband plans to them," said Ogrin.

"The growth in mobile subscriptions remains at the heart of our cross-sell strategy, as this is the most efficient channel for acquiring new subscribers, who have a lower cost-per-acquisition when compared to energy and broadband."

Amaysim also grew its broadband customer base from 5000 to 13,000 in the half-year. The company launched its broadband product on the NBN in May after acquiring local broadband provider AusBBS for $4 million. Amaysim's ARPU for broadband customers was $68 as of August 2017.

The company said it would also be reviewing its dividend payout ratio this financial year "in the context of the company's continued investment in growth".

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