Macquarie Corporate Telecommunications said planned capital expenditure will negatively impact earnings for 2004/05.
Macquarie reported net loss of $787,000 for the 12 months to June 30, 2004, an 83.3 per cent improvement from the same period a year earlier.
The carrier plans to increase capital expenditure to $18 million in 2004/05, from $11.3 million last year.
About half will be spent on a new technology and data services network to be deployed by the end of calendar 2005.
"With the bulk of additional operating expenditure due to be invested in the first half of the year, Earnings before interest, tax, depreciation and amortisation (EBITDA) in the first half of fiscal 2005 is expected to be around breakeven," chairman Robert Kaye said.
"Second half profitability is expected to position earnings back on a growth path but it unlikely to exceed that achieved in the second half of fiscal 2004."
Mr Kaye said the investment will position the company for further growth and provide a solid platform for profitability in the medium term.
"This new generation data and voice access network will provide Macquarie customers with access to an IP based network providing for vastly increased bandwidth demands, voice over IP, integrated access, end to end security services and other content driven services," he said.
EBITDA was $7.9 million, up from $2.8 million previously.
Revenue totalled $226.9 million, down from $234.5 million.
No dividend was declared.