Seddon hails KCH’s profitability

Business

KUMUL Consolidated Holdings’ (KCH) exceptional profitability is driven by its marketable securities and improved operating efficiency underpinned by a competent strategic investment plan, chief operating officer Gary Seddon says.
Seddon said this after the announcement of a profit of K169.7 million for the first half of 2019 by the company.
The results are from State-owned enterprises (SOEs), the shareholding of which are held in the General Business Trust and managed by KCH.
“Kumul Telikom Holdings (KTH) however are continuing to post losses through the first half of the year,” Seddon said.
“This is very concerning given our people’s dependence on a reliable, affordable, accessible communications network and the investment made by the government of Papua New Guinea, to build communications infrastructure.” The results for the period according a KCH statement were dominated by the three larger SOEs – Air Niugini (ANL), PNG Power Ltd and KTH.
ANL’s turnaround strategy is demonstrated in the half year results.
Cancelling loss making sectors, building integrity into the schedule and driving cost efficiency through the “higher altitudes” programme was behind the K80 million turnaround, with ANL on track to make a profit by year’s end.
The introduction of a Cairns to Hong Kong service through Port Moresby, together with heavy maintenance checks on regional airline fleet, are indications of positive growth from new strategies.
Seddon said the PPL restructuring programme commenced in the latter part of last year – the comparison between the first half of 2019 and the last half of last year demonstrated a significant improvement in performance. He said the improvement was driven by rehabilitation programmes favouring low cost power and an accelerated move to switch generation to gas and hydro.
Continued efforts to build resilience across the ageing transmission network and improving reliability of supply was bringing customer confidence back to the utility.
Seddon said PPL started with the retooling, improved warehousing and logistics and strict cost control, with multi-lateral support to build capacity, were all strengthening the business and positioning the country to connect more than 70 per cent of households over the next 10 years.
KTH losses continued through the first half of the year.
A robust plan to monetise the mobile communications infrastructure through aggressive pricing policies was gaining some traction.
However, this needed to be coupled with significant operational restructuring and cost management to turn the business around.
The implementation of programmes that build reliability across the networks was needed to encourage subscriber confidence in connectivity as well as pricing.
The introduction of domestic and international submarine cable infrastructure presented a game-changer in the delivery of fast, affordable broadband communications solutions across PNG.
The government’s investment in this infrastructure reflected the importance of communications to Papua New Guineas socio-economic growth.
PNG Ports Corporation (PNGPCL) was building on structural changes to its business and the outsourced terminal operator contract.
The company is driving a port modernisation programme to ensure that PNG has the capacity to meet its import and export requirements. Water PNG continues to address the need to provide fresh water and sanitation services to cities, towns and communities across PNG.
However, it was dealing with a significant increase in non-revenue water losses, across major systems in Port Moresby and Lae.
It stated that the remaining SOEs continue to track profitably with focus on incremental revenue growth from new products and services and improved operating efficiency to combat waste and overspending.
Kumul Agriculture Ltd, as a start-up business was assessing investment opportunities in the agri space and was tasked with building commercially viable state investment in coffee, cocoa and coconut commodities across the country. Collectively, the State-owned enterprises revenues represented four per cent of the country’s gross domestic product.

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