NewSat has operating loss of $4.43M for December 2007

According to NewSat CEO, Adrian Ballantyne some of the problems NewSat faced with being rejected for an Australian Guarantee Broadband license contributed to the company being able to generate new income during the six months of operations up to December 2007.

“Corporate sales were in line with management’s expectations. They are expected to be bolstered in the second half of the year with newly generated sales flowing from the major Kimberley contract sponsored by the Commonwealth Government and the Western Australian State Government that NewSat won during the period,” claimed Ballantyne.

He stated that during the period, NewSat re-engineered the consumer platform and signed an alliance agreement with Dodo for delivery of a subsidised consumer product, which effectively replaces the company’s previous consumer product offering.

“The NewSat/Dodo consumer initiative has yet to generate revenue due to the fact that the licence application needed to deliver the service has been declined at this stage by the Commonwealth Government,” said Ballantyne. “Management is seeking an early reconsideration of this decision.”

As a consequence of the delays in the licensing process and the eventual decision NewSat was unable to generate any new consumer revenue from this initiative, while capital and operational expenditures were incurred to establish the platform, claimed Ballantyne.

This has resulted in a decrease in revenue from continuing activities of approximately 14 percent and a net loss from continuing operations increasing by approximately 21 percent over the previous half year comparative period.

“Given the frustration of the company objectives by the unavailability of the subsidy licence, the results are aligned with the management and Board’s expectations for the period,” said Ballantyne.

He claimed that a heightened emphasis on developing corporate deals has extended the lead time of sales in this segment and this has dampened growth for corporate revenue gains in this period .