Tuas Group (ASX: TUA) is a specialist provider of power and communications infrastructure services across Australia. The Group focuses on designing, building, and maintaining electrical transmission and distribution networks, substations, and battery systems. Additionally, Tuas delivers integrated, scalable communication networks, including fixed and wireless infrastructure. Tuas Group was listed on the ASX in 2020. The Group has shown strong growth and is focused on expanding its mobile and fibre broadband services.
Tuas Group Financial Results Overview
Tuas Group has delivered a positive start to FY25 with an unaudited NPAT in Q1. This performance, while unaudited, provides a promising indicator of the company’s financial health, particularly considering its revenue and EBITDA in Q1 FY25.
In terms of financial performance, Tuas Group recorded a revenue of S$35.5 million for Q1 FY25, compared to S$117.1 million for the same period in FY24. The significant drop in revenue is reflective of the company’s focus on streamlining operations and optimising for long-term growth, rather than short-term gains. Despite the reduction in revenue, the company’s EBITDA stood at S$16.1 million, down from S$49.7 million in Q1 FY24. This indicates a decrease in profit margins, though the company’s profitability remains positive, highlighting its ability to generate strong returns despite challenging market conditions.
In terms of cash flow, Tuas Group remains in a solid financial position. As of the end of Q1 FY25, the company had S$62.1 million in cash and term deposits, up from S$55.3 million at the start of the period. The increase in cash position is mainly due to positive operating cash flow and careful management of cash reserves. The company’s net cash from operating activities for Q1 FY25 was S$18.3 million, indicating the company’s ability to continue generating cash from its core operations. However, the company’s investing activities involved significant outflows, with S$10.7 million spent on plant and equipment acquisition, as well as S$591,000 on intangible assets. This reflects the company’s ongoing investment in capacity expansion, particularly in mobile and broadband services.
Tuas Group’s outlook remains positive despite the competitive market environment. The company has demonstrated resilience, with its cash receipts from customers amounting to S$38.2 million in Q1 FY25, and cash paid to suppliers and employees reaching S$20.3 million. This points to continued demand for its services and a solid financial foundation as it continues to expand its mobile and broadband offerings. While market competition remains dynamic, the company’s focus on product innovation, strategic market positioning, and robust cash flow management enables it to stay competitive.
Tuas Group Strategic Growth and Outlook
Tuas Group has experienced remarkable growth in its mobile services, with active services surpassing 1.1 million by the end of October 2024. This impressive growth aligns with the company’s strategic goal of increasing its market share, having achieved a 10.7% market share in the SIMBA segment as of July 2024. The company’s success in growing its active services base underscores its strength in the competitive telecommunications industry, particularly in the mobile services market.
To maintain and build on this momentum, Tuas is targeting new mobile segments, leveraging product innovations such as data-only SIM cards and eSIMs. These innovations are designed to tap into a new market segment by offering greater convenience and flexibility to consumers, with online-only activation and instant setup options. The focus on innovation, coupled with ongoing upgrades to the network quality, provides a solid foundation for continued mobile growth.
In addition to mobile services, Tuas Group has made significant strides in expanding its fibre broadband business. As of November 2024, the company has more than 10,000 active fibre broadband subscribers, and the successful completion of the 10Gbps rollout for all central offices serving residential homes marks a key milestone in its growth strategy. The company’s ability to offer high-speed broadband services is reinforced by the allocation of grants by the Infocomm Media Development Authority (IMDA) for the 10Gbps rollout, a testament to Tuas’ alignment with government initiatives to expand and upgrade telecommunications infrastructure.
The outlook for Tuas Group remains robust, with continued growth expected in its mobile services, especially with the expansion into new segments, and ongoing fibre broadband development. The company has set a target of continuing to build its active subscriber base in both areas, which should help drive both top-line revenue growth and bottom-line profitability.
Tuas has also set an FY25 CAPEX guidance of S$45 million to S$55 million, which aligns with its focus on expanding and enhancing its network capabilities. This investment is expected to strengthen the company’s position in both the mobile and broadband markets, further supporting its revenue growth and enhancing shareholder value.
In conclusion, Tuas Group is poised to capitalise on its growing market share in mobile services, expanding broadband offerings, and its continued investment in infrastructure. The company’s strong cash flow, strategic product innovation, and clear focus on expanding its customer base ensure a stable and promising financial future. The next phase of growth will likely come from increased mobile and broadband adoption, supported by ongoing network improvements and a solid CAPEX plan, as the company continues to position itself as a key player in the Australian telecommunications sector.