2degrees 2019 results

 

  • Profit up 46% to $28.6m
  • EBITDA up 12% to $147.5m
  • Post Pay & Broadband lead growth
  • Infrastructure sharing agreement announced
  • Covid-19 forcing rapid pivot and reprioritisation

 

2degrees delivered its strongest result yet in 2019, with double digit growth in Pay Monthly mobile and fixed Broadband subscribers contributing to a 46% lift in pre-tax profit.

The company lodged its financial statements for the year ending December 31, 2019 today. 2degrees’ profit increased from $19.6m to $28.6m over the same period. While not presented in the accounts, the company disclosed organic EBITDA growth of 12%, from $131m to $147.5m.

2degrees Chief Executive Mark Aue says the company’s strategy of growing its customer share with a focus on higher value post pay connections and expanding opportunities to bundle with home broadband was working.

“Customers continue to appreciate simplicity and value supported by our 100% New Zealand based customer care team. We spent last year celebrating our 10th anniversary, refreshing our brand to highlight the breadth of our offering and we launched strong acquisition offers that really gained traction,” says Mr Aue.

“Those efforts were acknowledged by our bank lenders, who expanded our funding at a reduced rate so we can continue to invest in further growth.”  

Pay Monthly subscribers grew by 11% and broadband subscribers by 32%, with 2degrees now providing broadband to 108,000 homes. The company also revised its business offer and now serves a range of public and private organisations such as The Reserve Bank, Red Bull, Crown Worldwide and Allied Press.

That momentum was confirmed today, when Trilogy international Partners announced first quarter results for 2020 with 2degrees delivering 10% service revenue growth and growing its Pay Monthly mobile base by 11% and Broadband base by 32% in the quarter ending March 31, 2020 compared to the same period in 2019.

Mr Aue noted that while 2degrees achieved significant growth in 2019, it is keenly aware that Covid-19 has reshuffled the deck. The 2degrees team is now repositioning the company to deal with a new economic reality. To that end, it is implementing a programme of cost reductions outlined in April.

“2degrees was a strong business heading into this crisis. We’re now making changes to ensure we are there for our customers throughout this crisis and are just as strong as the economy recovers,” he says.

The company also announced an infrastructure sharing agreement whereby it will use its own spectrum via partner infrastructure to serve pockets of the New Zealand population not covered by its national mobile network.

2degrees’ national mobile network reaches 98.5% of the population, with just 1% of daily traffic carried by another operator. The agreement commenced earlier this month and has already seen a significant increase in mobile traffic as customers are enjoying the benefits of improved services in less populated areas and on regional roads.

“This is a great example of how a highly competitive industry can operate efficiently. Competition is maintained, capacity increased and the full 2degrees service is available for all customers,” says Mr Aue.

Despite the uncertainty created by Covid-19, the company is continuing its planning for 5G. Yesterday’s announcement on the allocation of early access spectrum was welcomed by the company. Network planning continues and 2degrees is acquiring sites ahead of an announcement of its plans in coming months.

ENDS

Contact: 2degrees Chief of Corporate Affairs Mat Bolland (022) 489 7722