Healthy half-year for Paratus Nam

Jo-Maré Duddy



Paratus Namibia's aggressive infrastructure roll-out strategy paid off in the six months ended 31 December 2020, boosting realised recurring revenue on a like-for-like basis by 9.4% to N$150.4 million.

Paratus Namibia is the operating entity of Paratus Namibia Holdings (PNH), which is listed on the Local Index of the Namibian Stock Exchange (NSX).

Paratus Namibia reported a net profit before taxation of N$21.9 million for the half-year under review, up N$7.6 million or 53% year-on-year (y/y). The company said the growth in profitability was mainly attributable to the recurring revenue growth coupled with the improved operating margins coming from the extensive infrastructure roll-out and operational expense savings.

Earnings before interest, taxation, depreciation and amortisation (EBITDA) amounted to N$46.9 million, an increase of N$9.1 million or 24.1% y/y on a like-for-like basis.

“EBITDA mirrors the company's ability to generate cash flows from operations. The disparity between profit after taxation and EBITDA stems from the large depreciation charges recorded on infrastructure deployed,” PNH said.



EARNINGS

Non-recurring revenue, which represents customer premises local area network installations, totalled about N$14.2 million. On a like-for-like basis, it dropped by N$18.6 million or 56.7%. “The decline is attributable to the slowdown in the construction of new commercial buildings because of the weak local economy,” PNH said.

Commenting on the latest results, Cirrus Securities said PNH was the only locally-listed company on the NSX which reported an increase in headline earnings per share (HEPS) and earnings per share (EPS) for the period ending December 2020. The increase was mainly due to the changes in the financial year-end.

HEPS came in at 32.51c, up from 14.39c, while EPS rose from 14.39c to 34.42c.

PNH declared an interim dividend of 10c per share.

According to Cirrus, the company retained more earnings during the period as the board believes it can achieve higher returns with these funds than what is required by the shareholder base.



INVESTMENTS

In the half-year under review, Paratus Namibia invested a further N$66 million in last mile fibre infrastructure, the group said.

New customers were connected in Windhoek, Walvis Bay, Swakopmund, Grootfontein and Otjiwarongo. The Long Term Evolution (LTE) coverage was extended to Rehoboth and Otjiwarongo and in Windhoek new sites were added to improve user experience and coverage.

Sky-Fi was rolled out to Keetmanshoop, Rehoboth, Otjiwarongo, Grootfontein, in addition to Windhoek, Swakopmund, Walvis Bay and Okahandja. Sectors were also installed in Oshakati and Tsumeb.

“The demand for data has increased substantially, which necessitated the upgrades of Paratus Namibia's independent international backhaul routes out of Namibia via the Trans-Kalahari Fibre (TKF) route,” PHN said. Both the west and east bound TKF terrestrial infrastructure has resulted in a significant cost saving in terms of the transportation of the increased bandwidth, it added.

According to PNH, the construction of the cable landing station for the Equiano sub-sea cable in Swakopmund has started. The project is expected to be completed during September at an expected cost of N$33 million. The cable landing station consists of the building and other terminal facilities which is required to land the Equiano Submarine Cable System.



OUTLOOK

PNH said Namibia's economy remains weak and is expected to recover moderately in 2021.

According to the Bank of Namibia's December 2020 Economic Outlook the economy is projected to recover to growth rates of 2.6% and 3.2% in 2021 and 2022 respectively. PNH said the growth trajectory in the information and communication sector was expected to continue on the back of the growing demand for reliable internet.