Service Stream has incurred a $19.5 million loss due to its 50 per cent stake in Syntheo, which is rolling out the National Broadband Network (NBN) in Western Australia and South Australia.
“The financial position of the group has deteriorated as a consequence of the losses sustained by Syntheo on the Northern Territory, Western Australia and South Australia NBN contracts, together with the impact of the operational difficulties experienced in fixed communications,” Service Stream stated in its annual report.
Syntheo was responsible for passing 48,620 premises in SA, WA and the NT for the NBN by June this year, but it has experienced numerous problems that have resulted in downgrades to construction targets for the network.
Following the downgrade of targets in February this year, work was handed back to NBN Co in the NT. Following this, it was announced Syntheo's contracts for the NBN would not be renewed, with Syntheo required to repay advances to NBN Co for overheads.
Joint venture partner Lend Lease previously recorded a $17.8 million loss due to the embattled Syntheo joint venture over the 12 months to 30 June, 2013.
Lend Lease is now controlling the completion of Syntheo’s obligations under contracts with NBN Co.
The fixed communications division at Service Stream fell 32.2 per cent to $227.1 million for the year to 30 June, 2013, while the mobile communications division reported unchanged revenue of $124.7 million, with its major customers comprising Telstra and Vodafone-Hutchinson.
During the year, Service Stream also reported revenue from work associated with the NBN. This includes a contract with Fujitsu to design and construct backhaul in new housing estates for the fibre optic network, which recorded $39.4 million in revenue.
The company also signed a new contract with NBN Co to replace the Fujitsu contract in new housing estates in NSW, WA, SA and the NT, reporting $26.4 million in revenue.
During the financial year, Service Stream won a three-year contract, with two two-year extensions, with Telstra to remediate the telco’s pits and pipes for the NBN in NSW, WA, SA and the NT. A total of $16.7 million in revenue was realised for the 2013 financial year for the contract.