TPG Telecom

Sep 19, 2023

This small telecommunications company is getting closer to profitability after another year of growth. Mitchell Lawler is a site writer at The Motley Fool Australia. He holds a Bachelor of Engineering and previously worked in the consulting space while his interest in equities grew. Mitchell is now completing his studies in finance and wealth management and hopes to help others in their investing journey. Latest posts by Mitchell Lawler ( see all ) Image source: Getty Images You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More 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. Approaching midday, the Tuas share price is an impressive 11.8% higher, trading at $2.12. For context, larger telco operators, such as Telstra Group Ltd ( ASX: TLS ) and TPG Telecom Ltd ( ASX: TPG ), are down 0.4% and 1.4%. 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 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 North-East 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. Motley Fool contributor Mitchell Lawler has positions in Tuas. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Aussie Broadband. The Motley Fool Australia has positions in and has recommended Telstra Group. The Motley Fool Australia has recommended Aussie Broadband and Tpg Telecom. The Motley Fool has a disclosure policy . This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips. More on Earnings Results