Reuters is reporting that Nigerian telecoms operator Starcomms has posted its annual results for 2008 and first quarter financials for 2009. According to the report, the company swung to an NGN8 billion (USD54.27 million) net loss in 2008 due in part to the depreciation of the naira currency. Starcomms recorded an unrealised foreign exchange loss of NGN3.64 billion on its dollar-denominated loans due to the naira’s decline, helping drive it to a net loss from a 2007 full-year net profit of NGN1.15 billion. EBITDA declined to NGN935 million, compared to NGN2.733 billion in 2007, attributed to reduced margins, primarily caused by the heavy levels of upfront discounts on new subscriber phone sales and increased operating costs. Chief executive Maher Qubain, said: ‘Demand for telecoms services in Nigeria in 2008 continued at very high levels. However, the second half of the year was characterised by worsening economic conditions, a declining exchange rate and declining average revenue per user (ARPU) across the industry.’ On a positive note, revenues for 2008 increased by 80.3% to NGN34.5 billion, compared to NGN19.13 billion in 2007 and total subscribers rose 182.8% from 737,000 in 2007 to 2.09 million a year later.
With regards to Q1 2009, the company reported an operating profit of NGN409 million in the first three months of 2009, reversing a loss of NGN683,000 in the same period of 2008. Revenues rose 15% to NGN8.5 billion in the period, while EBITDA increased by 106% year-on-year to NGN2.34 billion, compared to NGN1.13 billion in Q1 2008. Qubain commented: ‘The first quarter results of 2009 prove that Starcomms is in good health and had cash and cash equivalents of 8.157 billion naira at the end of March 2009.’