NERA TELECOMMUNICATIONS LTD Nera Telecommunications Ltd
Co. Reg. No.197802690R
109 Defu Lane 10, Singapore 539225
Tel: (65) 6281 3388 | Fax: (65) 6383 9566
Website: www.nera.net
BUSINESS UPDATE FOR THE THIRD QUARTER/NINE MONTHS ENDED 30 SEPTEMBER 2021
"The Group has seen a gradual uptick in order intake with the progressive global economic reopening. This will have a positive effect on our business, as most countries have adopted a "living with COVID" strategy. We are also encouraged to see more opportunities and leads from all three business segments. During the quarter, we secured a contract of approximately $6.0 million to provide Fibre-to-the-Home infrastructure network equipment for a major service provider in South East Asia as demand for work-from-home arrangements remains high."
"Looking ahead, we will continue to leverage on our strong track record in providing multi-domain technological solutions to prudently explore opportunities, especially in the domains of Cybersecurity and 5G."
Mr. Beck Tong Hong (麦东宏), CEO of Nera Telecommunications Ltd
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Financial Highlights
YoY Revenue Contribution by Customer Segment
$(million) | Q3 2020 | Q3 2021 | % | 9M 2020 | 9M 2021 | % | |||||||||||||||||||||||||||||
Change | Change | ||||||||||||||||||||||||||||||||||
Group Revenue | 29.2 | 24.5 | (16.1) | 95.6 | 67.8 | (29.1) | |||||||||||||||||||||||||||||
Government, | 6.8 | 5.0 | (26.5) | 23.7 | 12.2 | (48.5) | |||||||||||||||||||||||||||||
Transport and | |||||||||||||||||||||||||||||||||||
Utilities ("GTU") | |||||||||||||||||||||||||||||||||||
Service Provider | 16.3 | 14.5 | (11.0) | 58.3 | 41.2 | (29.3) | |||||||||||||||||||||||||||||
("SP") | |||||||||||||||||||||||||||||||||||
Enterprise ("ENT") | 6.1 | 5.0 | (18.0) | 13.6 | 14.4 | 5.9 | |||||||||||||||||||||||||||||
Revenue | Revenue (By Customer Vertical) | ||||||||||||||||||||||||||||||||||
($'m) | Q3 2020 | Q3 2021 | |||||||||||||||||||||||||||||||||
16.1% | |||||||||||||||||||||||||||||||||||
20.9% | 20.4% | ||||||||||||||||||||||||||||||||||
7.5% | |||||||||||||||||||||||||||||||||||
29.2 | 55.8% | 20.4% | 59.2% | ||||||||||||||||||||||||||||||||
24.5 | 23.3% | ||||||||||||||||||||||||||||||||||
22.8 | |||||||||||||||||||||||||||||||||||
SP | GTU | ENT | |||||||||||||||||||||||||||||||||
Q3 2020 | Q1 2021 | Q3 2021 | |||||||||||||||||||||||||||||||||
For the third quarter ended 30 September 2021 ("Q3 2021"), Nera Telecommunications Ltd's ("NeraTel") revenue decreased by 16.1% to $24.5 million, from $29.2 million for the third quarter ended 30 September 2020 ("Q3 2020"). This is due to the Group's prudent and selective approach, undertaken since 2020 to minimise risks, which led to a drop in the Group's opening order backlog for 2021. This has consequently resulted in lower revenue, extending to Q3 2021. A slowdown of project progression across the majority of the Group's geographical markets as a result of the ongoing COVID-19 pandemic also contributed to the revenue dip. For the nine months ended 30 September 2021 ("9M 2021"), revenue declined 29.1% to $67.8 million as compared to $95.6 million for the same period last year ("9M 2020").
Page 2 of 9
QoQ Growth in Revenue (Q1 2021 vs Q2 2021 vs Q3 2021)
$(million) | Q1 2021 | Q2 2021 | Q3 2021 | Q1 vs Q3 (%) | |||||
Group Revenue | 22.8 | 20.5 | 24.5 | 7.5 | |||||
Government, Transport and | 3.6 | 3.6 | 5.0 | 38.9 | |||||
Utilities ("GTU") | |||||||||
Service Provider ("SP") | 14.3 | 12.4 | 14.5 | 1.4 | |||||
Enterprise ("ENT") | 4.9 | 4.5 | 5.0 | 2.0 | |||||
It is noteworthy that for the first quarter ended 31 March 2021 ("Q1 2021") to Q3 2021, the Group has made good progress across all three key segments - the Government, Transport and Utilities ("GTU") division, as well as the Enterprise ("ENT") and the Service Provider ("SP") customer segments. In general, business sentiment has improved as the COVID-19 related movement restrictions have eased in many of the countries that the Group operates in. This has led to an improvement of the Group's revenue on a sequential basis.
Revenue rose 38.9% to $5.0 million in Q3 2021 for the GTU segment, up from $3.6 million in the three months ended 31 March 2021 ("Q1 2021"). For the SP segment, revenue rose 1.4% to $14.5 million, whilst ENT increased 2.0% to $5.0 million over the same period. The growth across all three business segments also reaffirms the success of NeraTel's customer diversification efforts, which continue to yield results.
GTU($'m)
38.9% | |
5.0 | |
3.6 | |
Q1 2021 | Q3 2021 |
SP
($'m)
1.4% | |
14.5 | |
14.3 | |
Q1 2021 | Q3 2021 |
ENT($'m)
2.0% | |
5.0 | |
4.9 | |
Q1 2021 | Q3 2021 |
Page 3 of 9
Order Intake by Customer Segment
Total Order Intake - from Q1 2020 to Q3 2021($'m)
40.4 | 39.1 | 39.5 | 38.3 |
27.0
19.5 21.0
Q1 2020 | Q2 2020 | Q3 2020 | Q4 2020 | Q1 2021 | Q2 2021 | Q3 2021 |
Moreover, NeraTel's quarterly order intake has been gradually improving from a low of $19.5 million in Q3 2020 to $38.3 million in Q3 2021. This is in tandem with a steady rise in opportunities following the progressive reopening of economies, and as the hybrid business model continues to be the default mode of work.
YoY Growth in Order Intake for all Three Business Segments
$(million) | Q3 2020 | Q3 2021 | YoY (%) | 9M | 9M | YoY% | |||||||||||||||||||
2020 | 2021 | ||||||||||||||||||||||||
Total Order Intake | 19.5 | 38.3 | 96.4 | 98.9 | 104.8 | 6.0 | |||||||||||||||||||
Government, | 4.7 | 17.7 | 276.6 | 26.8 | 30.0 | 11.9 | |||||||||||||||||||
Transport and Utilities | |||||||||||||||||||||||||
("GTU") | |||||||||||||||||||||||||
Service | Provider | 9.7 | 15.3 | 57.7 | 54.7 | 51.2 | (6.4) | ||||||||||||||||||
("SP") | |||||||||||||||||||||||||
Enterprise ("ENT") | 5.1 | 5.3 | 3.9 | 17.4 | 23.6 | 35.6 | |||||||||||||||||||
Page 4 of 9
Overall, NeraTel's total order intake of $38.3 million in Q3 2021 represents an increase of 96.4% YoY.
Total Order Intake - Q3 YoY($'m)
96.4% | |
38.3 | |
19.5 | |
Q3 2020 | Q3 2021 |
GTU order intake rose significantly by 276.6% to $17.7 million, up from $4.7 million, as this domain continues to gain significant traction with accelerated digitalisation. The SP segment rose 57.7% to $15.3 million in Q3 2021, an increase from $9.7 million in Q3 2020. With 5G rollout on track in the longer term, the SP market is expected to continue its growth momentum. The Group's ENT segment rose 3.9% on a YoY basis to $5.3 million in Q3 2021, mainly due to an increase in corporate investments from financial institutions for IT infrastructure to facilitate employees working-from-home amidst the pandemic.
GTU | SP | ENT | |||||
($'m) | ($'m) | ||||||
($'m) | |||||||
57.7% | |||||||
276.6% | 3.9% | ||||||
17.7 | 15.3 | 5.3 | |||||
9.7 | |||||||
5.1 | |||||||
4.7 | |||||||
Q3 2020 | Q3 2021 | ||||||
Q3 2020 | Q3 2021 | Q3 2020 | Q3 2021 |
Page 5 of 9
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Nera Telecommunications Ltd. published this content on 25 November 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 25 November 2021 09:49:01 UTC.
