Southern Phone was unable to pay its shareholder councils a dividend for the 2018-19 financial year, with management blaming changes to the telecommunications industry brought on by the NBN.
The company is owned equally by 35 regional councils, but has received a $27.5 million offer from energy giant AGL for a complete buyout.
Some councils had informed the Mercury that they received dividends in the 2018-19 financial year - about $95,000 for Wollongong, $41,000 for Shellharbour and $23,000 for Kiama.
But these payments related to the previous financial year, Southern Phone has clarified. The company was not able to pay a dividend for the year ended June 2019.
These facts some shed light on why the Southern Phone board has backed the AGL buyout offer.
It is not clear whether Southern Phone has made a profit or loss for 2019. The company's financial report has not yet been lodged.
The Mercury asked Southern Phone on Friday whether it had made a profit or a loss; a reply was not received.
Earlier, managing director David Joss said once 80 per cent of Southern Phone's earnings had come from home phone and digital subscriber lines, the NBN had changed the market.
"With the advent of the NBN the competitive dynamics of the telco sector have changed," he said. "Retail service providers now need significant scale and capital to make the economics work.
"We have seen a restructuring of the services we provide customers."
He said the company structure should change.
"To continue to grow and compete in an NBN-led market, Southern Phone needs access to shareholder capital," he said.
"In the 2018-19 financial year we did not declare a dividend to shareholders.
"Although community ownership has been a strong tenet of the business in the past, now is the right time to change the structure and establish the ability to leverage shareholder capital."