Shares in 2degrees’ owner plunge
Shares in the majority owner of 2degrees plunged 22 per cent overnight after the company reported a tough outlook for its other, smaller investment in a Bolivian mobile company.
Trilogy International Partners, which owns 73 per cent of 2degrees and is listed on the Toronto Stock Exchange, saw its share price drop C66 cents to C$2.33 (NZ$2.62).
The company, whose main asset is its stake in 2degrees, is now worth less than a quarter of its value two years ago.
That share price fall comes ahead of a period of possible increased investment requirements for Kiwi mobile communications companies, as the next iteration of mobile technology, 5G, arrives.
2degrees refinanced and grew its banking facility in July, securing a NZ$250 million facility to replace its previous $200m line of credit.
2degrees chief executive Stewart Sherriff said at the time that would provide the ‘‘borrowing capacity for further investments’’ in the business.
Trilogy’s result for the three months to the end of September indicated that 2degrees’ revenues were up 3 per cent and its operating profit up 14 per cent on the corresponding period a year ago.
But revenues and operating profit from its stake in Bolivian telco Viva fell by 8 per cent and 10 per cent, respectively.
Overall, Trilogy’s quarterly net loss more than doubled to C$14m.
Trilogy chief executive Brad Horwitz said he was pleased with the performance of 2degrees, noting it accounted for the bulk of the value of the company.
But he said the growth it had shown in post-paid mobile and broadband had been ‘‘tempered somewhat’’ by intense competition in Bolivia ahead of the introduction of mobile number portability there.