The Tuas Ltd (ASX: TUA) share price is putting the S&P/ASX All Ordinaries Index (ASX: XAO) to shame today after releasing its FY23 full-year results. Shares in the ASX-listed telco company are firmly higher, while the benchmark is taking a step backwards.
In early afternoon trading, the Tuas share price is an impressive 10.8% higher at $2.105. For context, larger telco operators, such as Telstra Group Ltd (ASX: TLS) and TPG Telecom Ltd (ASX: TPG), are down 0.13% and 1.25% respectively.
Let's dial into why investors are celebrating Tuas' latest results.
ASX telco share rallying 10% on continued growth
It was a record year for the Singapore telecommunications company on numerous fronts. Here are a few of the key figures from FY23 (all dollar amounts are in Singapore dollars):
- Revenue up 50% year on year to $86.1 million
- Earnings before interest, taxes, depreciation, and amortisation (EBITDA) up 100% to $31.1 million
- Active mobile services up 39.5% to 819,000 at 31 July 2023
- EBITDA margin improved from 27.0% to 36.1%
- Net loss after tax improved from $26.7 million to $15.3 million
The improving margins were attributed to increased operating leverage amid a growing subscriber base.
What else happened in FY23?
For the 12 months ending 31 July 2023, Tuas invested $46.3 million into its Simba 4G and 5G network across Singapore. The company remains on target to surpass 60% outdoor coverage with its 5G option by the end of the year.
The company's offering continued to attract more mobile subscribers in FY23, tackling the value-driven market segment. As reported by Hardware Zone last week, Simba (Tuas' brand) moved its 4G customers to 5G at no extra charge.
According to Tuas' FY23 presentation, more than 35% of the available customer base owns a 5G-enabled device.
Aside from executing its growth plan, it was a relatively quiet financial year for Tuas. In true David Teoh fashion, the company refrained from drawing much attention throughout the 12-month period. However, the financials indicate a successful year of expansion.
Nevertheless, it appears investors have liked what they have seen. Over the past year, shares in this ASX All Ords member have strengthened by 41%.
What's next for this ASX telco share?
Next month, Tuas plans to begin rolling out its own fibre broadband offering in Singapore under the Simba brand.
People living in the northeast corridor will be offered broadband speeds of 2.5 gigabits per second for $20 per month.
Tuas expects to undertake a full launch of its fibre broadband product by the end of the first half of FY24.
Underpinning further growth, the company has guided for between $45 million and $50 million in capital expenditure in FY24. This expenditure will cover both the expansion of its mobile and broadband endeavours.
Tuas share price recap
The past year has been a challenging period for ASX small-cap shares. During this time, the S&P/ASX Small Ordinaries Index (ASX: XSO) has limped 1% lower. Yet, this ASX telco share has bucked the trend and rallied 41% over the same timeframe.
Tuas is currently valued on a price-to-book (P/B) ratio of 1.7 times book value. However, similarly fast-growing telco company Aussie Broadband Ltd (ASX: ABB) trades on a P/B multiple of 3. Although, the latter is already profitable.
