Telecom Namibia has posted a positive bottom line for the first time in four years, the company’s Annual Report for the year ended 30 September 2017 show.
Results also show that the integrated ICT service provider and leading broadband and backbone infrastructure services provider managed to reduce its debt levels and improve its liquidity position.
Chief Financial Officer, Robert Offner, said 2017 marked the return to profitability for the company and the group.
He said despite revenues remaining flat, cost management initiatives and solid debt collection, ensured that the company posted a comprehensive profit of N$9 million (2016: N$41 million comprehensive loss) and the group, N$249 million ((2016: N$26 million comprehensive loss.).
Offner said the mobile and IP (broadband) revenues continued to grow, but declining voice traffic and price decreases on the data segments offset the growths.
“Whilst efforts have been centred on profitability, the financial sustainability going forward will focus on top line growth, whilst maintaining cost management discipline. Overall costs for the company decreased by N$82.9 million,” he said.
“The other key focus was realising positive cash flow in order to reduce short-term borrowings and reduce foreign and local denominated payables.”
Offner said the N$200 million that was realised from the sale of the Neotel shareholding, was used to repay short- term debt secured from financial institutions, resulting in a reduction of facility utilisation from N$348 million to N$79 million.
Available loan facilities were also decreased and amounted to N$80 million at year end.
“It is envisaged that these will be reduced over the next year or two,” he said.
Total current liabilities for the company decreased from N$1.1 billion to N$727 million, which will allow for increased capital expenditure in 2018.
The achievements reflect a significant turnaround in Telecom Namibia’s performance over the past four years.
Current liabilities exceeded current assets by N$269 million (2016: N$674 million) for the group and by N$246 million (2016: N$451 million) for the company at year-end.
“The group aims to achieve earnings before interest, taxes, depreciation and amortisation (EBITDA) margin of 30 percent plus by 2020 by focusing on revenue growth, reducing operating expenses and managing capital expenditure,” CEO Theo Klein said.
“For us at Telecom Namibia, the recession had its impact on our growth and cash collections. For these two aspects of our business performance, the results for the year ending September 2017 were a two percent shortfall on cash collections for the financial year and our overall business growth with a five percent shortfall on the respective planned amounts.”
He said shortfall of revenue led to an unfavourable year-on-year comparison of the total turnover of the company which at N$1.5 billion was 1.2 percent lower than the 2016 results.