TELONE has narrowed its operating losses by 42% to $7 million in 2017, owing to cost containment and a growth in broadband revenue.
BY BUSINESS REPORTER
In 2016, the company made a loss of $12 million.
In a statement last Friday, TelOne said the company’s profitability at EBITDA (earnings before interest tax deduction and amortisation) level improved by 47% growing to $20 million in the period under review from $14 million.
“The company’s profitability at EBITDA level improved by 47% growing from $14 million to $20 million. The improved performance was achieved through cost containment and broadband growth. The company is also pleased to announce a 42% reduction in operating losses (earnings before interest and tax) from $12 million in 2016 to $7 million in 2017,” TelOne said.
This translated to a negative operating profit margin of 5,98%, showing the company was still in a loss making position, which could be due to higher costs over revenue.
Contributing to the narrowing of its loss was a 3% growth in total revenue in 2017, due to an upsurge in broadband revenues.
“Revenue grew from $114 million in the year 2016 to $117 million in the year 2017 despite a decline in voice revenue,” TelOne said.
“Growth in broadband drove the overall revenue performance for TelOne. Broadband revenue grew by 36% and reached $45 million in 2017 as compared to $33 million the previous year. The company’s subscriber base grew from 80 745 subscribers in 2016 to 87 851 subscribers in 2017 marking an increase of 8,8%.”
However, the company’s voice revenue in the period under review declined by 6% translating to 9% decline in voice revenues, which was blamed on the over the top services.
TelOne board chair, Juliet Machoba said the company expects broadband revenue contribution to continue in an upward trend and reach up to 50% by 2019.
“In line with worldwide trends, voice traffic is expected to continue in a downward trend as clients continue to opt for broadband internet and over the top services. Voice revenue is expected to reduce to less than 40% in 2019 while broadband contribution to revenue is expected to reach up to 50% in the same period,” Machoba said.
In terms of capitalisation, TelOne implemented a huge chunk of the $98 million National Broadband Project which is now 98% complete.
This investment was largely focused on expanding the backbone footprint, increasing the core network capacity as well as fortifying the network which was largely legacy.
“We are happy to note that the project has started bearing fruit with revenue increases being recorded in the first year of capitalisation. In addition, TelOne also realised a significant uplift in assets from $490 million in 2016 to $548 million due to network investments made as part of the NBB project,” TelOne said.
TelOne said legacy loans continued to weigh down the balance sheet and is expecting a conclusion of the debt restructuring to ease the company’s profit and loss position.