2degrees reported a strong result for the telco, with pre-tax profit up from $19.6 million to $28.6 million for the year ended 31 December 2019.
While not presented in the accounts, the company disclosed organic EBITDA growth of 12 per cent, from $131 million to $147.5 million off lower total revenues of $727.7 million, down from $806 million.
A $57.6 million tax credit was also realised, lifting after tax profit from $19.6 million to $86.3 million. The credit was a deferred tax asset (losses) that the company now has confidence it will realise through future profits.
2degrees chief executive Mark Aue said the company’s strategy of growing its customer share with a focus on higher value post pay connections and expanding opportunities to bundle with home broadband was working.
The telco reported 11 per cent growth in pre-pay customer revenue while mobile and fixed broadband subscribers (up 32 per cent) contributing to the 46 per cent lift in pre-tax profit.
“Customers continue to appreciate simplicity and value supported by our 100 per cent New Zealand based customer care team," said Aue.
"We spent last year celebrating our 10th anniversary, refreshing our brand to highlight the breadth of our offering and we launched strong acquisition offers that really gained traction.”
2degrees' bank lenders also expanded its funding at a reduced rate during the year.
The company also revised its business offering and now serves a range of public and private organisations such as The Reserve Bank, Red Bull, Crown Worldwide and Allied Press.
Toronto-listed Trilogy international Partners, 2degrees' owner, also announced first quarter results for 2020 overnight.
2degrees delivered 10 per cent service revenue growth and growing its pay monthly mobile base by 11 per cent and broadband base by 32 per cent in the quarter ending March 31 compared to the same period in 2019.
Aue noted that 2degrees was keenly aware that Covid-19 had reshuffled the deck.
The 2degrees team is now repositioning the company to deal with a new economic reality, implementing a programme of cost reductions that could see 120 jobs go.
“2degrees was a strong business heading into this crisis," Aue said. "We’re now making changes to ensure we are there for our customers throughout this crisis and are just as strong as the economy recovers."
The company also announced an infrastructure sharing agreement whereby it will use its own spectrum via partner infrastructure to serve pockets of the New Zealand population not covered by its national mobile network, which reaches 98.5 per cent of the population.
Despite the uncertainty created by Covid-19, 2degrees was continuing its planning for 5G after yesterday’s announcement on the allocation of early access spectrum.