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2degrees marches towards a dual listing by year-end

2degrees marches towards a dual listing by year-end

2degrees' performance continues to improve as plans for IPO progress.

Credit: IDG owned

Kiwi telco 2degrees is poised to list on both the Australian and New Zealand bourses by the end of the year its owner, Toronto-listed Trilogy International, has said.

Releasing its unaudited financial and operating results for the first quarter of 2021, Trilogy president and CEO Brad Horwitz said Trilogy had begun preparations to list on both the NZX and the Australian Securities Exchange (ASX).

"We are pleased with the continued strong performance of our New Zealand business," said Horwitz. "Our B2B customer base continues to ramp up, underpinning our sustained postpaid mobile growth.

"Our financial results continue to improve, on both a year-over-year and sequential basis."

In March, 2degrees' service revenues for the month reached approximately $50 million for the first time while in the first quarter consolidated adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) increased 20 per cent as year-over-year organic segment adjusted EBITDA growth in New Zealand more than offset pandemic-related weakness in Trilogy's other main business, in Bolivia.

"We remain enthusiastic about the continued growth opportunities in New Zealand," Horowitz said. "5G is on the near-term horizon, and we continue to make progress executing our strategy and 5G network deployment." 

Any decision to offer 2degrees shares or other securities was subject to a continuing assessment of market conditions, Trilogy said.

The New Zealand government's swift and significant response during 2020 had an immediate dampening impact on customer acquisition and revenues, Trilogy said, and 2degrees undertook actions to mitigate impacts throughout the prior year. 

"However, as movement restrictions within New Zealand were lifted, financial results, including revenues and segment adjusted EBITDA began to improve sequentially in the latter part of 2020 and continuing into the first quarter of 2021 as compared to the initial months of the pandemic." 

2degres' CEO Mark Aue said the hard work of 2degrees' people through the challenges of 2020 paid off in the strong results. 

"It was this solid foundation that put us in such a strong starting position for 2021, from which we can grow," Aue said.

Trilogy warned there continued to be uncertainty for 2degrees regarding the future effect of COVID-19 on the New Zealand economy and related responses by the government, regulators and customers.

"More specifically, 2degrees continues to face a risk of increased bad debt expense and continued suppression of roaming revenues as international travel is restricted, although to date we have not yet observed a significant increase in bad debt expense in New Zealand."

Aue said it was particularly pleasing to have Trilogy acknowledge a key contributor to the first quarter result came from growth in the 2degrees business segment. 

"Kiwi businesses are turning to 2degrees, because they know we have an excellent network, and for the overall value and service we provide," he said.


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