Broadband Infraco has managed to slightly improve business operations by reducing losses from R245 million recorded last year, to R91 million for the year ended 31 March 2016.
This was revealed by company CEO Puleng Kwele today at an annual general meeting presentation of the company's integrated report for 2016. Kwele noted the report has been submitted to Parliament, but is yet to be tabled.
She said: "Yes, we have made a loss of more than R90 million, but for the first time we have positive EBITDA [earnings before interest, taxation, depreciation and amortisation]. It has been really hard work for us to get to that point where we have been driving revenue and we will continue to drive revenue."
Broadband Infraco recorded positive EBITDA of 7%.
"We will optimise our costs and ensure the R90 million is converted into a positive amount. The mandate from the board is to preserve the value of the company and jobs within the institution," stated Kwele.
For the 2015/2016 financial year, the state-owned fibre-optic infrastructure company posted its highest revenue of R452 million, which is R86 million (24%) higher than the R366 million of the previous year.
Kwele attributed the additional revenue growth to key customers, new contracts and retention of existing customers. During this financial year, the firm grew its customer base from 18 to 23 customers, which include three anchor customers.
The company's cost of sales for the year also decreased by 18% to R260 million; R54 million less than the previous year's R314 million. The decrease has been attributed to lower fibre lease and maintenance costs from contract renegotiations, a continual cost reduction drive and vigilant oversight on all financial outlays.
Gross profit for the year was R192 million, compared to the previous year's R51 million; an improvement of R141 million.
This week, media speculation was again rife that Broadband Infraco is up for sale and that a potential buyout is on the horizon.
Addressing these rumours, Kwele said she does not have a mandate to sell the company. "I'm not sure what the plans of the shareholders are but I think that kind of question is best answered by the shareholders themselves."
She added: "What is important is that we operate within an environment where the market is consolidating. Surely, at some point, the government has got to be able to say: how do we become prudent in terms of how the monies of the state are distributed and that the state is able to compete or redefine play within this specific sector."
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