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Back In The Black! TFL Posts $18.49m Profit After Reforms

After five consecutive years of financial losses, Telecom Fiji Limited has achieved a big turnaround posting $18.49 million post tax profit for the year ended March 31, 2015. The profit
18 Jul 2015 10:01
Back In The Black!  TFL Posts $18.49m Profit After Reforms
Telecom Fiji chief executive, Mothilal De Silva. Photo: RACHNA LAL

After five consecutive years of financial losses, Telecom Fiji Limited has achieved a big turnaround posting $18.49 million post tax profit for the year ended March 31, 2015.

The profit amount includes the sale of its asset, Ganilau House in Suva. However, a profit of $7 million was still recorded after taking out profits from the sale of this asset.

The Amalgamated Telecom Holdings Limited (ATH) subsidiary posted a $15 million loss in the previous financial year.

Telecom Fiji chief executive, Mothilal De Silva, said this financial turnaround was achieved through persistent initiatives addressing key business performance areas.

In light of the positive results, the board has declared a dividend of $5 million which will be paid to ATH as its 100 per cent shareholder.

This was announced following Telecom Fiji’s annual general meeting yesterday afternoon.

 

Initiatives undertaken

So the question was, how did Telecom Fiji manage to achieve such a big turnaround, even without taking into account the one-off asset sale.

Mr De Silva said TFL embarked on a major cost rescaling and resources rationalisation programme almost 18 months ago.

“This required some tough operational decisions such as reductions in human capital and disposal of certain assets within the company,” he said.

“In addition to this, we also rationalised cost in the areas of power, annual maintenance, license, and space considerably.”

But this was not all. In addition, Telecom Fiji continued to closely monitor its service delivery functions and performance.

Mr De Silva said this has been an area of concern in terms of revenue realisation and customer satisfaction.

“The company’s service delivery matrix has improved tremendously in the past 12 months and this is reflected in its customer satisfaction ratings and revenue growth,” he said.

“These targeted cost rescaling and resources rationalisation strategies have resulted in organisational restructuring and transformation.

“The improvements in business performance have been stimulated by more efficient utilisation of existing resources within the company.”

 

Commercial aspects

The other area which Telecom Fiji simultaneously focused on was strengthening its commercial activities to protect and enhance its revenues and market share.

Mr De Silva said the company recorded a growth of 3.25 per cent or $2.85 million in its core operational revenue which was achieved through focused sales and marketing initiatives.

The revenue growth was driven by 16 per cent growth in the business customers who demand faster speeds and higher resiliency and availability of communications networks.

 

Plans ahead

So where to from here for Telecom Fiji?

Mr De Silva said going forward, Telecom Fiji will continue to enhance its infrastructure and services with an aim to meet customer demands and further improve its service delivery.

“The company will continue to exercise prudency in its investment decisions in its endeavour for business growth and enhancing shareholder value,” he said.

Telecom Fiji is also working in closer collaboration with other subsidiaries within the ATH Group to leverage from existing resources within the group and with a view of minimising infrastructure duplications.

One of the on-going investments of Telecom Fiji is the upgrading of fibre optic cable network across the country.

Once this is complete, the company will be able to provide faster internet speeds ranging from 10mbps to 50mbps.

Four areas TFL broad strategies were focused on:
– Cost rescaling or minimisation
– Revenue Maximisation in a segmented market
– Effective Utilisation or Monetisation of existing resources and investment rationalisation
– Organisation restructuring to increase efficiency by consolidating and streamlining business processes

Feedback:  rachnal@fijisun.com.fj

 



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