TelOne had their Annual General Meeting today and announced some pretty interesting results for the year ended December 31. There’s good news and bad news…
Well, revenue continues with its upward trend, increasing from $119 million in 2017 to $125 million. TelOne believes that this is as a result of the the 37% increase in broadband customers.
TelOne’s Fixed Subscriber base also grew pretty significantly from 87 851 the previous year to 100 005 – a 14% increment. No doubt, this also played a factor in the growth of their revenue.
The growth in subscriber base and increase in broadband prices towards the latter end of 2018 were not enough to stave off losses.
The not-so-good news
In the press release sent out to media outlets, TelOne announced that their Earnings before interests, taxes, depreciation and amortisation (EBITDA) had grown to $21 million from $19 million and whilst that’s impressive in its own right, the telecommunications company still made a loss before tax of $19.6 million. TelOne did not mention the loss after tax figures which means they are probably significantly higher than the $19.6 million they are willing to share with the public.
Even though the company made a loss there is still a positive to be taken since this is an improvement on the $39 million loss before tax of 2017.
What TelOne did share was the reason why they were still a loss-making company and they gave 3 of the following reasons:
- Finance charges on legacy loans of $12.4 million. Company performance continues to be eroded by the legacy loans which were inherited from the Post and Telecommunications Corporation (PTC) at its unbundling in 2000.
- In 2018, the company was penalised $8.9 million by ZIMRA for late settlement of its tax obligations. The company’s default on its ZIMRA obligations was due to liquidity challenges brought by late settlement of amounts owed by various customers who mainly include Government of Zimbabwe. The company will continue to work with ZIMRA and the Government for an amicable solution to clear the ZIMRA debt while also recovering amounts due from Government.
- Without the Legacy Loan Expenses, exchange gains and ZIMRA penalties and interest, the company would have incurred a narrowed Loss before tax position of just $380 000 in 2018, which is a marked reduction from the $10.2 million loss incurred in 2017 before legacy loan charges.