Mobile weighs on Paratus' earnings

Paratus Namibia Holdings expects revenue for the year ended 30 June 2026 to increase by between 10% and 30%, but headline and basic earnings per share are expected to fall by more than 30%.

The company attributed the expected decline in headline earnings per share (HEPS) and basic earnings per share (BEPS) mainly to losses from its mobile business, which was launched in September 2025.

Paratus said the mobile business remains in its early growth phase, with the launch resulting in higher operating costs, increased finance costs from additional infrastructure funding and higher depreciation on the expanded network.

The update highlights the difference between revenue growth and earnings growth. While additional customers and services can increase revenue, earnings can come under pressure when the costs of building and operating the business increase faster than revenue.

The expected decline follows a mixed 2025 financial year. Revenue increased by 14.6% to N$651.8 million from N$568.9 million, but operating profit fell by 41.4% to N$66.1 million.

Earnings before interest, tax, depreciation and amortisation (EBITDA) declined by 10.2% to N$203.4 million, with the EBITDA margin falling to 31.2% from 39.8%.

HEPS fell 44.4% to 26.28 cents from 47.25 cents, while BEPS declined to 26.29 cents from 47.49 cents.

Paratus also significantly increased investment in its network and other infrastructure during the year. Capital expenditure rose to N$443.3 million from N$204.7 million in 2024, while property, plant and equipment increased to N$1.41 billion from N$1.09 billion.

Borrowings increased to N$620.8 million from N$401.2 million, contributing to finance costs of N$75.1 million in 2025.

Despite the weaker operating performance, profit for the year was broadly unchanged at N$26.6 million, compared with N$26.4 million in 2024. Investment income increased to N$36.6 million from N$102,000.

Paratus said profitability is expected to improve as mobile revenue and the customer base grow and operating efficiencies are realised.