Another Good Year – Telecom Namibia posts impressive financial results yet again

Riding on the back of increasing subscriber additions for its broadband offerings, Telecom Namibia has registered yet another impressive performance for financial year 2009-10.Going by its track record, this is not unexpected. Over the years, the company has grown consistently, showing strong, sequential improvements in its profits and revenues.

During the year, Telecom Namibia’s registered a 3 per cent increase in its total revenue from N$1.13 billion for the year ended September 2009 to N$1.16 billion for the year ended 30 September 2010. The growth in demand of broadband product and service offerings contributed significantly to the increase in revenue.

There was a significant increase in operating profit for the year from N$58.5 million realised in the previous financial year, to N$103.7 million for the year ended 30 September 2010. This represents an increase of 77 per cent year on year and is largely attributable to the immense savings made in the cost of distributing the Company’s products and services.

Telecom Namibia’s profit after tax vastly improved from N$25.5 million for the year ended September 2009 to N$ 69.7 million for the period under review.

The Company’s total assets have increased from N$2.13 billion as at the 30 September 2010 to N$2.18 billion at the end of the period under review, representing an increase of 3 per cent. Additional investment amounting to N$159 million was made towards local capital infrastructure development. Among the local projects carried out were the following:

• Building of the WACS Landing Station at Swakopmund, of which the building construction work was completed and the first batch of equipment are being installed. This project is well on schedule.

• Continued deployment of broadband services, especially those based on ADSL and WiMAX access technologies.

• Upgrade of the South Fibre Ring from STM-16 to STM-64, which is in terms of transmission capacity.

• Deployment of a modern air traffic control system of the Directorate of Civil Aviation was another major project implemented.

• All border posts for Ministry Home Affairs were serviced with new infrastructure, except the new one at Wakashamane.


• The Hardap West Project which involved a new aerial fibre construction between Nudaus and Sesriem.ple spread over more than 800,000 square kilometers).

Telecom Namibia successfully concluded a bond issue during the financial year resulting in the injectionof N$200 million


in long term capital to the business.

Additional long term debt amounting to N$222 million was raised by the Company during the year. Total long term borrowings thus increased from N$294 million as at 30 September 2009 to N$659 million as at the end of the period under review. The additional capital, augmented by the positive cash flow generated from operations, saw Telecom Namibia fully redeem the overdraft outstanding at the beginning of the period under review amounting to N$256 million, during the year ended September 2010. A net amount of N$327 million was generated from operations for the period under review, up from N$295 million generated in the previous financial year.

These impressive results were achieved amidst the ongoing transformation exercise within Telecom Namibia in order to build a highly competitive organisation that drives innovation and profitable growth. We have been successful growing our NGN technology and service portfolios and providing broadband services to business and individual users across the whole of Namibia. In terms of strategy, broadband services are to play a highly significant role in delivering to the customer a ‘one time’ solution to a variety of needs spanning voice, data, video and mobility - all delivered on a single platform, offering customers unprecedented conveniences and flexibility, while such a single network will effect significant cost savings for the customer.

The deployment of new networks has laid the foundations of the company’s repositioning and transformation to conform to its new business model. This model requirement includes a significant reduction in general and administrative expenses, driven by simplified operations, reduced systems and improved processes. In addition, R&D investment will continue to be a top priority. Capital investment will be in high-growth opportunities. Plans to increase the company's focus in sales and other customer-facing functions will be enhanced.

In terms of corporate social responsibility, Telecom Namibia is making steady progress towards its goal of extending corporate social responsibility way beyond building the telecommunication infrastructure that forms the framework of the economy and the society.

Telecom Namibia has committed itself to the UN Global Compact in aligning its policies and strategies with universal accepted principles in the areas of business ethics and transparency; workplace practices and employee relations; community engagement and development; environmental health and safety; human rights and the integration of corporate social responsibility into its supply chain.