By:Staff writer
Paratus Telecommunicationsis keen to invest a further N$280-million on a number of capex projects during 2023, which will bring the capital spent into infrastructure development to N$740 million since 2021.
According to the company’s Chief Financial Officer Stefan de Bruin, the total capital expenditure for 2022 amounted to N$282 million, with N$178 million spent the previous year.
This year, investment will mainly be earmarked for the following capex projects:
• Completion of the Armada Data Centre in Windhoek;
• Completion of the Equiano Cable Landing Station in Swakopmund, which landed on the Namibian coastline on 1 July 2022. The expected “Ready-For-Service” date is during first quarter of the 2023 calendar year;
• Fibre to the X (FTTx) rollout; and
• Expansion of network infrastructure.
“The capital expenditure is to be funded by a combination of own cash resources and the proceeds from the bond programme,” De Bruin explained. “An amount of N$130 million was raised through the NSX approved bond programme during September 2022,” he added.
Paratus Namibia Holdings (previously called Nimbus Infrastructure) is a listed company under the technology sector on the NSX (Namibian Stock Exchange), with the objective of pursuing investments in the information communication and technology sector in sub-Saharan Africa.
The company which is fast expanding, delivers products and services to 22 African countries and already has fully licensed offices in Namibia, Angola, Botswana, Mozambique, Zambia and South Africa.
“For the 2023 financial year, a further N$280 million investment into infrastructure was approved by the Board,” said Hans Bruno Gerdes, chairperson of Paratus.
“The beauty of investing in infrastructure is that one is able to see the development and improvement of the Namibian ICT landscape unfold on a daily basis. Where there was once no connectivity, Paratus Telecommunications has provided it in record time, in an expert and efficient manner, through dedicated teams and a passion for consistent improvement,” Gerdes said.
In terms of the company’s investment strategy, De Bruin said with the completion of the Armada Data Centre and the landing of the Equiano submarine cable, which is expected to go live during the first quarter of 2023, Paratus’ primary focus will return to its national network expansion throughout the country.
“We have an aggressive national network expansion planned for the coming 12 months, which include three last mile technologies namely, fibre, LTE and microwave,” he said.
Paratus installed a total distance of 254 km (2021: 310 km) of fibre last year and predominantly consist of last mile fibre in Windhoek, Swakopmund, Walvis Bay, Otjiwarongo, Gobabis, Ondangwa, Ongwediva, Oshakati, Grootfontein and Okahandja.
Last year Paratus recorded a record growth in new fibre subscribers, increasing it by 2 434 new connections (2021: 1 664), representing a growth of 46% from 2021.
“We are also planning to expand our retail arm with more Paratus outlets to be opened in the north and south of Namibia.
“The Board approved a capex budget of N$280 million for the 2023 financial year, with fibre remaining the predominant focus, followed by LTE and microwave.
“Since the recent restructuring of the LTE and microwave connectivity packages and the change in strategy in terms of its deployment, we have noted a sharp increase in the subscriber base,” De Bruin pointed out.
He said Paratus has successfully rolled out a new CPQ (Configure, Price and Quote) system during the past financial year and are continually revising and adapting the back-office systems and automation processes to improve the overall customer experience.
“Subsequent to the N$200 million loan capital raised through the Note Programme the net interest bearing debt (total interest-bearing debt less cash)/EBITDA multiple is 1.76 (not to exceed 3.5) and the EBITDA interest cover multiple is 5.25 (not to be less than 2.5). Our capital allocation priority is to support investment in critical network infrastructure,” the executive explained.
“On 16 September 2022, a second tranche of N$130 million was raised through the listed Domestic Medium-Term Note Programme. The second tranche of the Note Programme was well received with bids totaling N$363 million. Three-year notes to the value of N$30 million were issued at an interest rate of 275 basis points above the 3-month ZAR JIBAR rate. Five-year notes to the value of N$100 million were issued at an interest rate of 325 basis points above the 3-month ZAR JIBAR rate.”
He said the maturity profile of the current notes in issue are as follows:
• N$175 million maturing on 18 June 2024;
• N$30 million maturing on 16 September 2025;
• N$25 million maturing on 18 June 2026; and
• N$100 million maturing on 16 September 2027.
“Paratus remains well placed to grow revenues due to the continued demand for reliable Internet coupled with the ongoing rollout of last-mile infrastructure. The anticipated growth for the 2023 financial year is to be driven mostly by the expansion of our fibre and LTE network across Namibia and the completion of the Data Centre, which was inaugurated on 4 August 2022,” he said.
“The Directors are of the opinion that the recently landed Equiano submarine cable, the completion of the carrier neutral Data Centre as well as the continued investment in infrastructure assets across Namibia bodes well for both revenue growth and improved operating margins,” he concluded.