Troubled telco Engin has announced losses of $6.7 million before tax in a draft statement to shareholders, following a rocky year for the VoIP-provider which shelved plans to launch a national fibre-to-the-node broadband offering last year.
Causing the losses was a failure to reach high customer growth aspirations in the six months to 31 December 2007, along with costs related to the implementation of a new customer billing system and a complete re-branding exercise carried out by the company, including advertising, signage, and marketing.
Engin’s ADSL2+ project, which was meant to provide the company with the means to claim ‘triple play’ status along with its VoIP and TiVo offerings, will continue to be put on hold until a “strategy to provide a nearer-term path to profitability for the company’s core telephony business [is] successfully executed,” according to the report.
The company aims to re-finance the broadband project in the second half of this year.
In a bid to re-acquire lost money, Engin has relinquished its exclusivity rights to the US-owned TiVo pay-TV brand, which is now open to distribution by other companies. Engin originally planned to bring the TiVo hardware into the company in an exclusive deal with the US, with Engin part-owner, Seven Network Limited, providing the broadcast content.
Engin says this move will “significantly reduce the performance related risk and demands on working capital carried by Engin under the [former] TiVo distribution contract.”
According to the report, Engin is now in a better position to focus on its VoIP business, while still retaining the option to distribute TiVo as part of a Broadband triple play.
“This position materially decreases its working capital demands and will accelerate its path to profitability,” said Engin.
Engin has reportedly repayed the $3.7 million owed to Seven Network Limited after the TV company loaned the sum to Engin to cover debts associated with its Unwired shares purchase.
Now that the debt is paid, Engin “remains well positioned to capitaslise on Unwired’s roll out of WiMax in due course,” said Engin.
Meanwhile, the company has gained a new chairman in the form of Ian Smith, who has been with the company only since September last year.
Smith brings over 20 years in advertising and a “wealth of experience” in the media and communications industries.
Smith previous worked as CEO of Yahoo!7.