One of Nigeria’s CDMA operators, Starcomms plc, recently released its third quarter (Q3) 2011 forecast to the Nigerian Stock Exchange (NSE) showing that the company expects gross earnings of N5.7 billion, while it targets a loss after tax of N2.3 billion, indicating that it does not expect to return to profit.
The company also forecasts net cash flow generated from operating activities at N50.3 billion, while cash flow from financing activities is targeted at N3 billion.
Though the company’s second quarter (Q2) result is still expected at the end of the month, a look at its Q1 result shows that the company recorded a significant 24 percent decrease in turnover from N7.9 billion in 2010 to N6 billion the following year.
Also loss after tax witnessed a sharp 35 percent decrease from N1.5 billion in 2010 to N2 billion the following year.
Meanwhile, as part of moves by the company to strengthen its management team in a highly competitive telecommunications industry and put it onto growth path, it recently appointed two directors - Bryan Morris and Peter Kingsley - as new directors last month.
In a statement signed by the company, it said Morris would be responsible for all human resources and administrative operations while Kingsley would be in charge of customers operations and services of the company.
Prior to the time of appointing them, Starcomms also went into negotiations with Telcom Multi-Links, which was having problems.
The deal was however slowed down by cost of sale considerations as both parties were negotiating to agree on a final sale that would be agreeable to both.
Sometime in January 2010, the Telkom’s board was said to have rejected a proposal by former CEO, Reuben September, to merge Multi-Links with Starcomms. But with the exiting of Telkom from the Nigerian CDMA market, the firm is said to be in negotiations with Starcomms in its bid to acquire Multi-Llinks. If the acquisition sails through, it would give Starcomms which had lost market share to Visafone, a chance to recover dwindling subscriber numbers.
Since Telkom announced that it was exiting the Nigerian market in November last year, it was said to have gotten strong offers from Etisalat Nigeria, whose CEO Steve Evans later said the company was not interested in Multi-Links any more.
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