Starcomms Reports 53% Increase In Gross Profits

Nigerian fixed-wireless operator Starcomms has announced its financial results for the year ended 31 December 2009, reporting a 53% year-on-year rise in gross profit to NGN18.896 billion (USD124 million), compared to NGN12.385 billion in 2008. The company’s earnings before interest, tax, depreciation and amortisation (EBITDA) in 2009 leapt 633% to NGN7.334 billion, up from NGN935 million a year earlier, which Starcomms attributed to a 13% rise in service revenue, operational efficiencies from a greater scale of operations and effective cost control. Cash flows from operations increased to a positive NGN7.803 billion versus a loss of NGN7.142 billion in 2008, which will enable the firm to fund its planned capital expenditure whilst paying down a portion of debt in 2010.

However, the company posted a loss after taxation of NGN7.787 billion, of which NGN4.951 billion resulted from unrealised foreign exchange losses on remaining dollar denominated debt. Any appreciation of the naira will result in these unrealised losses being written back as profit in 2010. The company’s operating loss improved 85% from NGN4.448 billion in 2008 to NGN666 million a year later; if the naira remains constant or improves, Starcomms says it expects to see a much better bottom line performance in 2010.

At 31 December 2009 Starcomms recorded a total active subscriber base of 2.629 million, 26% higher than the 2.085 million reported a year earlier. During 2009 the company succeeded in expanding its coverage from 20 cities and twelve states to 31 cities and 22 states.