MELBOURNE, May 22 Asia Pulse - Internet domain name company Melbourne IT Ltd (ASX:MLB) today reiterated its cautious outlook for the 2002 full year, after forecasting 10 per cent earnings growth for the first half of 2002.
Chief executive officer Adrian Kloeden told shareholders the company was unlikely to repeat its 175 per cent growth in 2001 earnings before interest and tax (EBIT) to A$4.2 million (US$2.32 million).
"I would love to be able to deliver a 175 per cent increase in EBIT every year," Mr Kloeden told the company's annual general meeting.
"However, we do need to take a reality check from time to time."
Mr Kloeden said the company would not be forecasting a result for the full year because the Australian market was still in transition to a new regulatory environment and there had been a slowdown in the registration of new top-level domain names internationally in the second half of 2001.
"It (a forecast) is just not sensible," Mr Kloeden told reporters.
Mr Kloeden said double-digit growth in Melbourne IT's business sector was a "significant achievement".
He told shareholders the company had had a good first quarter and a good start to the second.
"Our revenue streams have been strong and we have continued to contain our costs. We expect that EBIT for the first half will be around 10 per cent up on the A$2.0 million (US$1.1 million) EBIT for the first half of 2001," he said.
Mr Kloeden said the company was seeking to expand its international markets, from which it currently derives 58 per cent of its revenue.
He said the US market was maturing and but the company believed there would be continued growth in Europe and Asia.
Mr Kloeden said revenue for Melbourne IT's investment in registry services company Neulevel had been disappointing so far, due to the slower uptake of the new .biz domain name.
However, growth in other domain names such as .us and others provided some upside.
"The market research is very encouraging," Mr Kloeden told reporters.
Mr Kloeden noted that the Australian market was in transition to a new regulatory environment with the .au Domain Administration Ltd, or auDA, phasing in a new .au business environment.
"We are entering an unknown and untested marketplace in Australia. The method and process for the new .au domain name environment here has no precedent anywhere in the world," he told shareholders.
Melbourne IT's best estimates were that the available market would expand but Melbourne IT would have a smaller share.
Mr Kloeden said the company's Corporate Domain Management services was expected to be an important revenue stream for Melbourne IT in future years.
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