Ma­jor­i­ty state-owned Telecom­mu­ni­ca­tions Ser­vices of Trinidad and To­ba­go (TSTT) yes­ter­day de­clared prof­it af­ter tax prof­it of US$21 mil­lion for the six months end­ed Sep­tem­ber 30, 2023, which is an in­crease of 316 per cent com­pared with the US$5 mil­lion prof­it for the same pe­ri­od in 2022.

"This sub­stan­tial in­crease un­der­scores the ef­fec­tive­ness of the strate­gic mea­sures that have been put in place by man­age­ment and are cur­rent­ly in train," said the TSTT chief fi­nan­cial of­fi­cer, Shi­va Ram­nar­ine, as he ad­dressed a vir­tu­al in­vestor brief­ing yes­ter­day. The brief­ing was at­tend­ed by in­vestors in TSTT's US-dol­lar bonds and lo­cal and for­eign an­a­lysts who cov­er the com­pa­ny's per­for­mance.

Ram­nar­ine said the com­pa­ny's rev­enue for the pe­ri­od April 1 to Sep­tem­ber 30, 2023, to­taled US$145 mil­lion, which was 6 per cent high­er than for the same pe­ri­od in 2022.

"This strong per­for­mance is a tes­ta­ment to our ca­pac­i­ty not on­ly to nav­i­gate, but al­so ex­cel in the con­stant­ly evolv­ing com­pet­i­tive land­scape," said the CFO.

He said TSTT's op­er­at­ing prof­it surged to US$46 mil­lion, "show­cas­ing a re­mark­able year-on-year growth of 53 per cent. This surge al­so un­der­scores our con­tin­ued op­er­a­tional ef­fi­cien­cy and strate­gic fo­cus."

Ram­nar­ine not­ed that the telecom­mu­ni­ca­tions com­pa­ny record­ed an ad­just­ed EBIT­DA (Earn­ings Be­fore In­ter­est, Tax­a­tion, De­pre­ci­a­tion and Amor­ti­sa­tion) of US$71 mil­lion, "re­flect­ing a strong year-on-year growth of 16 per cent. This achieve­ment con­tin­ues to high­light our ef­fec­tive­ness in man­ag­ing costs while keen­ly fo­cused on rev­enue growth and cus­tomer ex­pe­ri­ence."

Ram­nar­ine al­so fo­cused on TSTT cred­it rat­ing up­grade by the S&P rat­ing agency, which moved the com­pa­ny from B+ to BB- on Oc­to­ber 23, 2023.

"This up­grade is root­ed in the sig­nif­i­cant­ly im­proved fi­nan­cial health of the com­pa­ny, which in­cludes in­creased prof­itabil­i­ty, the main­te­nance of im­proved ad­just­ed EBIT­DA mar­gin, sur­pass­ing 40 per cent as well as am­ple liq­uid­i­ty and stronger cash gen­er­a­tion and the sus­tained en­hance­ments to our lever­age ra­tios for four suc­ces­sive quar­ters," said Ram­nar­ine.

He said the up­grade from B+ to BB- re­sults in a per­ceived re­duced risks for in­vestors and cred­i­tors, as it show­cas­es in­creased ca­pac­i­ty for TSTT to meet its fi­nan­cial oblig­a­tions.

"We will per­sist in dili­gent­ly work­ing to­wards main­tain­ing and im­prov­ing cred­it and lever­age met­rics, while com­mit­ed to main­tain­ing a dis­ci­plined ap­proach to cost con­tain­men­tand cost man­age­ment," Ram­nar­ine said.

He said the com­pa­ny's lever­age ra­tio–which is debt to EBIT­DA–re­mains im­proved at 3.5X as at Sep­tem­ber 30, 2023, which is well in line with TSTT's tar­get­ted thresh­old of less than or equal to 4X.

The com­pa­ny's clos­ing cash po­si­tion at the end of Sep­tem­ber 2023 was US$53 mil­lion and its debt was US$470 mil­lion. Ram­nar­ine added that the com­pa­ny ex­pects to spend about US$70 mil­lion in cap­i­tal ex­pen­di­ture in its 2024 fi­nan­cial year. About 52 per cent of TSTT's cap­i­tal ex­pen­di­ture in 2024 will be spent on ex­pand­ing its 4G net­work and in­creas­ing the foot­print of its fi­bre net­work. He said the com­pa­ny's cap­i­tal ex­pen­di­ture is ex­pect­ed to be about 19 to 20 per cent of its over­all rev­enue.