Reunert, the JSE-listed ICT group, says its subsidiary, Nashua Mobile continues to be affected by the decline in least cost router (LCR) business, slower turnover growth caused by the drop in interconnect rates and a market that is approaching saturation.
Reunert announced a 10% rise in revenue to R5.7 billion for the six months ended March 2012, from R5.2 billion before.
Operating profit rose by a healthy 18% to R736.1 million, from R625.5 million in 2011.
Reunert announced a gross cash dividend per share of 95 cents, from 77 cents per share before.
For Nashua Mobile, the group said the prepaid data market continues to grow strongly off a low base. Net connections increased by 35,151 in the six month period. The focus on mobile data and voice resulted in more than 27,000 net connections during the year (2011).
“These contracts, however, are generally at lower subscription rates. This is evidenced by the continued decline in the average revenue per user (ARPU), which has declined by 9% from September 2011.”
ARPU has slipped to R378, from R411 in 2011 and R426 in 2010.
“Despite the lack of growth in revenue, operating profit has increased as a consequence of cost control and productivity gains,” Reunert said.
It added that Nashua ECN is performing at expected levels. The conversion of the Nashua Mobile LCR base to the ECN VoIP platform is still in progress. David Rawlinson, chief executive said in a report at the end of 2011, that the conversion of its LCR business to ECN’s VoIP platform was expected to take 24 months.
Reunert acquired ECN Telecommunications business in June last year for R172 million.
The target set for 2012 is to convert 12 million LCR minutes over the year, at an expected rate of one million minutes per month, the group said.
“At the reporting date nine million minutes have been signed for conversion, of which nearly five million minutes are currently routing through ECN on a monthly basis.
“The number of voice minutes on the ECN network continues to grow, with volumes exceeding 60 million minutes per month,” Reunert said.
|March 2012||September 2011||March 2011|
|Subscriber base (closing at period end)||881,672||846,521||824,396|
|Number of subscribers signed up (connections)||99,634||93,790||80,361|
|Churn % – total||15||15||14|
|Churn % – excluding LCR||13|
|Number of retail outlets||150||150||150|
Nashua grew revenues by 7% to R3.6 billion, off a high base; whilst operating profit grew by 20% to R403 million, compared to R336 million in 2011.
Looking ahead, Reunert said the telecoms environment in the mobile side remains challenging but added that it’s VoIP offering, and associated services, reflected encouraging growth off a low base.