Staff Writer
Simonis Storm Securities has maintained a hold recommendation on Paratus Namibia Holdings after the company reported strong revenue growth but weaker profits in its interim results for the six months ended 31 December 2025.
Paratus reported revenue of N$381.3 million during the period, up 16.5% from N$327.3 million recorded a year earlier. Underlying operational revenue growth, excluding dividend income from the previous period, stood at 23.4%.
Despite the increase in revenue, the company recorded a total comprehensive loss of N$36.3 million compared to income of N$26.5 million in the same period last year. No interim dividend was declared.
Simonis Storm said the weaker earnings reflect the company’s ongoing investment phase following the launch of its mobile network in September 2025.
The firm said customer growth and cross-selling are starting to improve, but these gains have not yet translated into stronger profits.
Recurring revenue at Paratus’ main operating subsidiary increased 19.7% to N$325.3 million. Revenue from the mobile division rose 115% to N$27.6 million from N$12.8 million recorded in June 2025.
Since the mobile launch, the company’s SkyFi customer base has grown by 57%, while its fibre customer base increased by 49%.
Simonis Storm said this suggests the mobile business is helping attract more customers to other services instead of operating on its own.
Costs increased sharply during the period. Cost of sales rose 52.7% to N$234.4 million, reducing gross profit to N$146.9 million from N$173.8 million recorded previously. Gross profit margins fell to 38.5% from 53.1%.
Operating expenses climbed 54.6% to N$163.2 million as the company absorbed costs linked to the mobile network launch, customer acquisition campaigns, marketing, professional fees and higher expected credit loss provisions.
Depreciation charges increased to N$90.4 million from N$59.1 million due to expanded network infrastructure.
Finance costs also rose to N$42.2 million from N$36.9 million as borrowings increased to fund capital projects.
This pushed the company into an operating loss of N$29 million compared to an operating profit of N$66.4 million in the prior period.
Simonis Storm said cash generation remained one of the weakest parts of the interim results.
Cash generated from operations stood at N$31.3 million, lower than the previous period despite stronger revenue growth. Interest payments of N$25.9 million consumed most of the operating cash flow before financing costs.
The stockbroking firm said Paratus is showing early signs of growth in mobile subscribers and customer expansion.
However, investors are still paying above net asset value for a company facing weaker margins, reduced balance sheet flexibility and no dividend support during its current expansion phase.
