NMI chief finance officer Wilfred Racadio said that last year’s turnaround was a result of both financial and operational clean-up conducted by the company.
The company also reported a revenues of P500 million last year, an asset base of P3.4 billion, an equity base of P3.1 billion (from a negative P10 billion in equity at the start of 2003), and an ARPU of P1,300. NMI currently has 33,000 subscribers after clean-up from a previous level of 50,000.
Racadio explained that NMI was in a build-out stage when it was bought by the new owners led by its president Mel Velarde in 2002, hence the historical negative EBITDA and income. NMI’s EBITDA (earnings before interest, taxes, depreciation and amortization) became positive n 2002.
He pointed out that the new management embarked on certain marketing and operational changes as well as a financial restructuring in order to turnaround the company.
In reorganizing its operations, the company focused on its key strength which is its unique technology. NMI is also expected to capitalize on its affiliation with Nextel Communications Inc. (NCI) and Nextel International Inc. (NII) to grow its international business starting this year.
In order to turnaround NMI’s negative financials, Racadio noted that the new management improved on the quality of its revenues by refocusing marketing efforts on the proper niche which are the business enterprises and the high usage market of mobile workgroups, rather on the mass/consumer market.
NMI also discontinued unprofitable subscriber plans and promos, reduced the number of subscriber plans, modified its advertising strategy to target the business sector, launched higher value rate plans aimed at business clients, implemented more effective customer payment programs, and reviewed and implemented new credit standards.
The company likewise streamlined and recalibrated operations in order to decrease costs and prepare the groundwork for growth. These include implementation of programs to control costs and expenses, significantly reducing if not eliminating handset subsidies, reducing headcount by 60 percent, implementing procedures to improve collection efficiency, improving infrastructure for customer relations, reallocating network facilities to optimize utilization, and upgrading infrastructure to gear-up for growth.
Racadio also revealed that NMI undertook a capital restructuring and clean-up of its balance sheet to wipe out its accumulated deficit and increased its paid up capital to P3 billion. Since the company has no bank debts, the restructuring merely involved converting about P13.3 billion in advances and notes payable to shareholders‚ equity, among others.
NMI earlier acquired a majority stake in publicly listed Premiere Entertainment (PEP) for purposes of backdoor listing.