NuRAN Wireless - Q2 Results Review and Finance Q&A
Overview
Jim Bailey, CFO of NuRAN Wireless, discussed the company's Q2 results and first-half performance, highlighting that a significant portion of revenue came from its network as a service business in Cameroon and DRC. The company achieved a strong gross profit despite high administrative costs and incurred non-cash interest charges, with plans to refinance for better terms. They also made partial repayments on accounts payable and short-term debt. Future plans focus on scaling sites to achieve positive EBITDA by early 2025 and raising equity in NuRAN Africa to prevent dilution.
Revenue Breakdown and Network as a Service (NAS) Business
Jim highlights that Neuron Wireless generated significant revenue in the first half of the year, mainly from its network as a service (NAS) business in Cameroon and DRC, which is unaffected by IFRS 15 adjustments. The company invoiced arrears in Q2, achieving a high gross profit in Cameroon, while the overall gross profit for the first half was impacted by costs in the DRC.
High Costs and Financing Challenges
Jim discusses the high administrative costs linked to closing financing by the end of June and meeting its conditions in July, noting one-off costs, including interest charges on short-term debt. He explains that these charges will be addressed through cheaper financing in the future and emphasizes the company's reliance on goodwill and strategic relationships with vendors, suppliers, and creditors to navigate its financial situation.
Vendor and Supplier Relations
Jim expresses gratitude to vendors, suppliers, and creditors for their support and patience, highlighting that the company has repaid a portion of its accounts payable and some short-term debt. He notes that the positive performance from the NaaS business has been vital in managing these financial obligations, and repayment plans have been established with vendors and suppliers to ensure smooth cash flow.
Non-Dilutive Financing and Future Plans
Jim explains non-dilutive financing and its application for NuRAN Africa, noting that the recent loan is capitalized, and the company intends to refinance it. This new financing will feature a longer term and a two-year capital repayment holiday, enabling a focus on site development and positive site economics. Additionally, the company plans to raise equity in NuRAN Africa, fully owned by NuRAN Canada, to avoid dependency on public market share prices.
Site Economics and Future Projections
Jim discusses the site economics in Cameroon, noting a 74% gross profit and room for improvement, while highlighting fixed costs like satellite and local operating expenses that remain constant as site numbers increase. The company aims to achieve EBITDA positivity by early 2025 by scaling operations and leveraging fixed costs. Additionally, the DRC market is showing promising growth, with plans to build more sites there.
Closing Remarks and Future Communication
Jim emphasizes that site build is the company's top priority and plans to report on growth regularly while welcoming questions and feedback from shareholders. He reiterates the positive results from the first half of 2024 and anticipates similar performance in the second half. The company aims to optimize sites and achieve positive site economics with the new funding.
