Tuas (ASX:TUA) share price rockets 30% after TPG spinoff reports strong subs growth in FY21

This junior telco’s shares are surging today…

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The Tuas Ltd (ASX: TUA) share price has been an exceptionally strong performer on Tuesday following the release of its full year results.

In morning trade, the TPG Telecom Ltd (ASX: TPG) spin off’s shares are up 30% to $1.33.

Tuas share price rockets on strong subscriber growth

  • Revenue of S$34.3 million
  • Earnings before interest, tax, depreciation and amortisation (EBITDA) loss of S$2.5 million
  • Net loss of S$32.6 million
  • Negative operating cash flow of S$6 million
  • TPG Singapore subscribers of 392,000, up from 133,000 in September 2020

What happened in FY 2021?

Unlike its former parent, TPG Telecom, Tuas is a newcomer in the telco space, launching its commercial services on 31 March 2020.

However, it is a case of so far so good for the company. The release notes that the TPG Singapore brand has almost tripled its paid subscriptions over the 11-month period of September 2020 to August 2021 to 392,000.

This resulted in the company’s revenue coming in at S$34.3 million for the financial year. This was an increase of S$30 million since October 2020. Positively, this growth has been consistent, with Tuas revenue growing month on month over the period.

And while the company reported an EBITDA loss, management appears positive on the future. It notes that the TPG Singapore brand maintained strong subscriber and revenue growth through the reporting period and achieved positive EBITDA of S$0.9m for the 12 months to 31 July 2021. It has also continued to track positively into the first quarter of FY 2022.

What’s the outlook for FY 2022?

The release explains that due to the early stage of its growth cycle and COVID-19, the company is unable to provide revenue or EBITDA guidance for FY 2022.

However, management advised that it expects TPG Singapore to continue to maintain its EBITDA positive track into FY 2022. It also advised that the company expects to incur capital expenditure of approximately S$40 million for the financial year. This excludes any investment in 5G.

For now, management plans to focus on continuing to supply good quality and excellent value services to its customers in order to grow subscribers through the coming 12 months.

It also notes that TPG Singapore has already acquired mmWave spectrum for localised 5G non-standalone deployments and has been approved to conduct limited commercial trials of its 5G non-standalone network using its 2.3 GHz spectrum.

The Tuas share price is now up 80% in 2021.

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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