Jun 2014 Financial News

TSTT’s $505M loss

Jun 06, 2014

DESPITE receiving benefits for the financial year ended March 31, the Telecommunications Services of TT (TSTT), Acting CEO George Hill in a pre-audit statement issued yesterday said, “these benefits were not sufficient to completely address several significant one-off costs taken on during the period which resulted in the company recording an estimated total comprehensive loss for the year of $505 million.

“The higher gross revenues and lower operating costs were eclipsed, though not unexpectedly, by provisions made for TSTT’s Voluntary Separation Programme; retroactive payments from an Industrial Court Ruling on employee costs for 2006 and 2007 and a write-down of the carrying value of a portion of the Company’s service delivery platform.”

He added, “These items had a cumulative impact of over $727 million.”

However Hill noted that as a result of an aggressive cost management programme that included control of TSTT’s receivables, vendor management and debt policy, the company was able to realise a 2.7 percent increase in gross revenues and the company’s gross margin efficiency was up 3.7 percent.

Hill said TSTT’s overall net core performance when compared to the prior financial year, exclusive of cumulative one-off items, “was also very much improved.”

“The company’s financial position as evidenced by a review of the balance sheet remains strong and continues to reflect a consolidated and robust asset base where total assets increased by 1.6 percent.”

He also noted that TSTT’s current efficiency ratio more than doubled during the year and despite the decrease in Shareholders’ Equity due to the fall in comprehensive income, the debt to equity increased marginally from 28 percent to 25 percent, which was well within international telecommunication benchmarks.

Noting the focus on broadband was already being felt in several communities with the launch of Long Term Evolution Technology projects to support the rapid deployment of the fastest available wireless broadband to cover 95 percent of the population, Hill said, “At the same time TSTT’s fibre deployment programme will encompass 30,000 more households over the next three years.”

He said the current phase of that programme involves a $15 million investment to serve communities in Tobago, Central and North Trinidad with TSTT Quad-Play of Broadband, TV, Voice and Security Services.

“This focus on mobile, broadband and enterprise will expand the Company’s potential for making further contributions to TT’s development and its ability to provide a solid return on investment for its shareholders.”


Source:
Newsday
Friday June 6, 2014

http://www.newsday.co.tt/business/0,195845.html