Paratus grows revenue but feels the squeeze

Paratus Namibia Holdings Ltd has reported strong revenue growth for the six months ended 31 December 2024, but shareholders saw earnings per share fall sharply as the NSX-listed telecoms group absorbed the costs of an ambitious network transformation and the dilutive effect of last year's rights issue.

Group revenue rose 16.43% to N$327.3 million, driven by new customer sign-ups across Namibia, higher occupancy at the Armada Data Centre, and N$18.4 million in dividends received from surplus funds invested in money market instruments, up from just N$100 000 in the prior period. Recurring revenue at the main operating entity grew 8.8% to N$271 million.

Earnings under pressure

Despite the revenue performance, basic earnings per share fell to N$0.26 from N$0.37. The decline was primarily attributed to the increase in shares in issue following a rights offer completed in June 2024, which added 51.5 million ordinary shares. Profit before taxation rose to N$31.7 million from N$29.4 million, while earnings before interest, taxes, depreciation, and amortisation (EBITDA) came in at N$129.7 million at a margin of 39.6%, against 42.7% in the prior period.

Operating expenditure rose to N$103 million from N$80.9 million, with N$14 million directly attributable to a transformation project launched in May 2024 aimed at expanding the Paratus network nationally and deploying a new digital software stack. A N$7 million foreign exchange gain recorded in the prior period also did not repeat, weighing further on the comparative performance.

Capital expenditure reached N$125.2 million for the period, with N$53.6 million directed at the transformation. The group said revenue from the new infrastructure is expected to begin ramping up from the second half of the 2025 financial year.

Dividend trimmed

The board declared an interim dividend of N$0.5 per ordinary share, half the N$0.10 cents paid in the prior interim period, to preserve cash for infrastructure deployment. "This should bode well for future profit growth," the company said.

Total assets grew to N$2.14 billion from N$1.41 billion, supported by the rights issue proceeds and ongoing capital deployment. The group's net asset value per share stood at N$12.08 per share against a listed price of N$12.65 per share.

Capital commitments stood at N$580.7 million, reflecting the scale of the buildout ahead. Debt covenant ratios remained well within limits, with EBITDA interest cover at 6.28 times against a minimum threshold of 2.5 times.