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Melbourne IT 2010 profit falls 4.5%

Melbourne IT 2010 profit falls 4.5%

Melbourne IT (ASX:MLB) has reported a 4.5% decrease in calendar 2010 profit on transformation costs and forex losses.

The company - which supplies domain names, hosting and other online support services – disclosed in its 2010 report that profit fell to $16 million, from 5.1% lower revenue of $189.9 million.

Melbourne IT is conducting a transformation project aimed at expanding into integrated web services and investing further in operational support systems.

When announcing the project in 2010, the company said it was expected to cost $17 million over three years.

Melbourne IT said the transformation is on-budget and on-schedule, but the costs incurred had impacted its results.

Adjusted for these expenses profit actually grew slightly, and EBIT would have declined only 4.1% instead of the recorded 9.5% decrease to $21.2 million.

Using 2009 exchange rates revenue would also have improved 3.1% on a like-for-like basis.

Melbourne IT said it expects its 2011 EBIT to be impaired by $5 million in 2011 as a result of transformation costs, but its underlying EBIT to be up 15% before these costs and the projected forex impact.

MLB shares fell 1.92% on Thursday to $1.855.

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Tags it servicesASX:MLBMelbourne ITfinancial resultsforeign exchange

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