KARACHI: Supernet Limited’s strategy to expand its services beyond connectivity is paying dividends as the company’s net profits spiked from Rs 34.15 million in FY20 to Rs 233.41 million in FY21 and the returns on equity (RoE) grew from 3.71 per cent to 20.29 per cent.
The company’s accounts show that its EBITDA (earnings before interest, tax, depreciation and amortisation) rose to 19.04 percent from 14.29 percent during the period under review as its earnings per share (EPS) surged heftily from Rs 0.68 to Rs 2.33.
The company’s management predicts that SNL’s consolidated revenues will exceed from Rs 2.7 billion in FY21 to Rs 5 billion by FY24 and net profit from Rs 233 million to Rs 480 million with EPS of Rs 4.28.
SNL has consistently reported strong revenues for the past five years, with a very healthy EBITDA and operating margin. The company has a very low debt to equity ratio that shrank to 0.19 from 0.25 in FY21. As Pakistan is going digital, Supernet plans to be a key enabler of this adoption for corporate Pakistan and go international by starting services in the regional markets.
Founded in 1995, Supernet is one of Pakistan’s leading telecommunication service providers and systems integrator. Although initially Supernet provided consumer dial up internet services also, it is exclusively focused on the B2B segment since the mid 2000s, with a history of designing, delivering and managing high quality network solutions and services. The company offers a full portfolio of local-to-global integrated communications infrastructure solutions, including fiber, radio and satellite based services.
Over the years the company, with highly trained and experienced human resources in a wide range of communication and IT technologies spread across Pakistan in more than 200 cities and towns, has expanded its customer segments from purely enterprise customers to other telecom operators, defense organizations and government sector entities, as well.
In order to fuel its growth and diversify its business, Supernet has embarked on a new strategy called ‘Beyond Connectivity’. Traditionally, Supernet only provided the communication and internet services to its customers, and it did not participate in providing the rest of ICT infrastructure to them. The overall ICT spend of corporate customers estimated to be in the range of $500 million and 750 million per annum is expected to comfortably outpace overall GDP growth rate soon.
Given the proliferation of broadband services and smartphones in the country, a young population, low base and an emphasis by the government, including the regulators, on adoption of online channels of commerce and service delivery, the ICT spend of all organizations is going up rapidly. Generally, for most organizations ICT is the second largest use of capital spending.
Given this overall environment, Supernet decided a few years ago to become a key enabler of such digital change in the country. The key opportunities that emerge in the new environment, besides the traditional requirement of more connectivity/ internet services that Supernet already provides, include provision of network infrastructure, computing solutions, enterprise applications, power infrastructure as well as cyber security. Each of these categories has a large size of current business and high growth opportunities.
Cyber security is expected to have the highest growth rate amongst all these categories as the current level of protection against cyber threats is low, and the threat of cyber attacks on private and government organizations is increasing rapidly. Supernet has the technical expertise, track record of performance and relationships with large and medium customers in the country, which enable it to better roll out new products and services.
For this purpose, Supernet has also formed new subsidiaries to focus exclusively on security and infrastructure. The planned listing of SNL is in order to gear up the company for high growth in these areas by providing funding for working capital and capital expenditure, details of which are expected to be announced shortly by the Company.
Recently, SNL has added new products and services and is now aggressively expanding into Cyber Security, Power Solution and IT and Infrastructure Solutions. These solutions are being sold to the existing SNL customer base, which gives SNL competitive advantage as it uses its relationship with existing customers for new cyber security business and infrastructure supply.
The management of SNL believes that future growth will come from cyber security and IT infrastructure solution selling. For this expansion into these areas, SNL has set up two new subsidiaries: Supernet Secure Solutions, Supernet Infrastructure Solutions and Supernet E-Solutions.
Another subsidiary, Phoenix Global (Supernet Global Solutions), is a UAE based company that offers a wide range of IT and Communication solutions to international clients.
Copyright Business Recorder, 2022
Comments
Comments are closed.