Starcomms

[billions]

STARCOMMS PLC
UNAUDITED RESULT FOR 6 MONTHS ENDED 30-06-2008
2008 2007
TURNOVER N17.458b N8.695b
PROFIT BEFORE TAXATION (N1.850b) (N381m)
TAXATION N836m NIL
PROFIT AFTER TAXATION 08 (N1.014b) (N381m)

[solainvest]

Originally Posted by billions

STARCOMMS PLC
UNAUDITED RESULT FOR 6 MONTHS ENDED 30-06-2008
2008 2007
TURNOVER N17.458b N8.695b
PROFIT BEFORE TAXATION (N1.850b) (N381m)
TAXATION N836m NIL
PROFIT AFTER TAXATION 08 (N1.014b) (N381m)

Is this loss in line with their forecast? Does anyone know?

I know they intend making loses for a while but the question is: are they in control or losing control.

I see this stock between N9-N10 very soon.

[kenebobo]

Originally Posted by solainvest

Is this loss in line with their forecast? Does anyone know?

I know they intend making loses for a while but the question is: are they in control or losing control.

I see this stock between N9-N10 very soon.

With this type of result, it may even get to 5 bucks.

[hispy99]

Originally Posted by solainvest

Is this loss in line with their forecast? Does anyone know?

I know they intend making loses for a while but the question is: are they in control or losing control.

I see this stock between N9-N10 very soon.

Estimated loss for the year is N454M, so they need to make a profit of around ~N560M for the last 6months of the year to match their forecast.

[owen1968]

I see people predicting Starcomms will drop below N10, even all the way to N5. I'm not too sure that is possible because a majority of the investors holding Starcomms now and who will be making this sell decision bought between N13 and N15 okay. So I think that many people not sure of where the stock may be heading will take a 5 to 10% hit to get out early. That people will be willing to lose as much as 30 to 60% is doubtful.

Now Starcomms is in business and their result shows a significant growth in revenue. I am not too worried about the loss because this may be as a result of huge investments they must be making now. Good move will be to expense as much of that as you can now. Like we've seen NBC and NB do when they build new plants.

Starcomms is suffering from the downturn in the market and will turn if the market turns.

[Babs_O]

Starcomms - Initial impression: “We foresee a silver lining ahead”

Starcomms Plc yesterday released its un-audited results for the half year ended 30th June, 2008, Turnover soared by 100.69% to N8.695 billion, PBT however dipped by 385.56% to N1.850 billion, while it recorded a loss of N1.014 billion.

The loss declared by the company may not be unconnected with high customer acquisition costs ( selling below cost to acquire customers), high energy cost which was due to epileptic power supply in the country and foreign exchange losses which was as a result of appreciation of naira against dollars as most of their loan are dollar denominated.

Management intimated that subscriber growth during the second quarter, up 24.14% (561,918) was above the company’s forecast figures of 452,660 subscribers. This brings gross voice subscribers to 1.485 million compared with the company estimate of 1.4million for Q2’ 2008. Consequently, the company made more losses related to subscriber acquisition than it had anticipated.

In addition, the sudden surge of energy costs contributed substantially to Starcomms operational loss position. Diesel prices (used to power generating sets for base stations on average of 15hrs daily) rose 60%- from N94 to N150 per litre within a 3 month period. Management also attributed losses due to foreign exchange translations to approximately N240million.

It is our opinion that Starcomms customer acquisition strategy (market penetration) is a good one and should begin to yield results in the medium to long term. We believe its CDMA technology is a more robust technology adaptable for the provision of broad band services. We will review our rating and valuation in a more detailed note following further discussions with the company’s management.

[gentle]

Gurus in the house, how we see the shares of starcom

[Babs_O]

IBTC on their stock select review sheet have placed Starcomms on sell even at the N 7-8 range. The key data an a sheet I saw handy dated 26-Aug-08 had the following key info
Price N7.46; No of Shares 6,878,478.096; PE -N/A; P/B 9.78;
Short Term Recommendation: SELL
Long Term Recommendation: HOLD

I am not saying I support this IBTC recommendation as I have observed it changes from time to time. In 3 months time even at a higher price you should not be shocked if they recommend Short Term: BUY and Long Term BUY.

[Apache]

Originally Posted by gentle

Gurus in the house, how we see the shares of starcom

For a stock that will not pay dividend till 2010 is a no go for me considering the options available on the floor of the exchange and at the prices seen.
So for me, Starcomms is a no go.

[Babs_O]

Summary of Starcomms Stockbroker forum

Starcomms on Wednesday 17th September, held a stakeholders forum aimed at providing insight to the company’s performance for the half year ended 30th June 2008. Contrary to our expectations, Starcomms had posted a half year net loss of N1.014 billion on the back of turnover of N8.965billion. A swift market reaction to the result announced on August 14 saw the stock shedding 23% of its value, thus resulting in a need for the company to throw more light on its operational and financial performance.

We present below major highlights of the forum pending our equity note on the stock;

· Management reiterated that the result was adversely impacted by exogenous factors, mainly attributable to a spike in power costs (owing to sharp increases in diesel price during the period), and exchange rate related losses as a result of foreign currency debt. Diesel expenses as at end of Half year 2008 was approximately N583million, an increase of 82.7% over management’s budget figure of N319million. Management also stated that losses due to foreign exchange were approximately N233million.



· Management also stated that it made debt provisions of N172million in respect of Interconnect charges owed by four telecoms operators during the period.



· At the end of June 2008, Starcomms had an estimated net debt position of $26million, and cash balance $229 million, implying total balance sheet debt of $255million.



· It was affirmed that the company’s ownership structure remained intact, as the core investor (SN Communications Holdings ltd) increased its equity stake in the company to 29%. Management stated that the huge volumes observed upon listing was in line with the Nigerian Stock Exchange (NSE) rules on listing by introduction, which stipulated that the issuer offered 5% of its outstanding shares (approximately 350million) to the market to provide liquidity for the stock.



· Current subscriber base is estimated at 1.5million with average daily activations of 10,000 subscribers, while Average Revenue per User (ARPU) at $19 per user remains solid, and well above competitors ARPU; MTN $16/ user, Zain $12/ user and Globacom$ 14/user.



· The company’s network expansion plan is very much on course. Starcomms effective coverage now extends to 21 major cities in the country. The company’s coverage is expected to extend to 31 major cities by the end year. Management also stated that revenue projections were also on target.



· Starcomms intends to adopt the Co-location of base station infrastructure with competitors with a view to reducing costs. It is expected that this measure would greatly reduce capital investment costs on network development.



· Key strategies being employed by management in meeting its year end forecasts include, Aggressive growth of its higher margin data business, driving volume growth in its tele-centre business segment and development of product lines to cater for corporate customers.

While management has expressed great optimism in meeting its full year earnings forecast, we tend to adopt a more cautious stance in view of the company’s recent results. It is our view that the results for the next few quarters would be very crucial in determining management’s ability to meet key performance indices as stated in its offer prospectus. We will be publishing our recommendation on the stock once we get the required input for our financial model.

[billions]

Proshare News and Analysis
Reaction to Starcomms Net loss H1 results
Posted Wednesday, September 24, 2008

Starcomms on Wednesday 17th September, held a stakeholders forum aimed at providing insight to the company’s performance for the half year ended 30th June 2008. Contrary to our expectations, Starcomms had posted a half year net loss of N1.014 billion on the back of turnover of N8.965billion. A swift market reaction to the result announced on August 14 saw the stock shedding 23% of its value, thus resulting in a need for the company to throw more light on its operational and financial performance.

We present below major highlights of the forum pending our equity note on the stock:

Management reiterated that the result was adversely impacted by exogenous factors, mainly attributable to a spike in power costs (owing to sharp increases in diesel price during the period), and exchange rate related losses as a result of foreign currency debt. Diesel expenses as at end of Half year 2008 was approximately N583million, an increase of 82.7% over management’s budget figure of N319million. Management also stated that losses due to foreign exchange were approximately N233million.

Management also stated that it made debt provisions of N172million in respect of Interconnect charges owed by four telecoms operators during the period.

At the end of June 2008, Starcomms had an estimated net debt position of $26million, and cash balance $229 million, implying total balance sheet debt of $255million.

It was affirmed that the company’s ownership structure remained intact, as the core investor (SN Communications Holdings ltd) increased its equity stake in the company to 29%. Management stated that the huge volumes observed upon listing was in line with the Nigerian Stock Exchange (NSE) rules on listing by introduction, which stipulated that the issuer offered 5% of its outstanding shares (approximately 350million) to the market to provide liquidity for the stock.

Current subscriber base is estimated at 1.5million with average daily activations of 10,000 subscribers, while Average Revenue per User (ARPU) at $19 per user remains solid, and well above competitors ARPU; MTN $16/ user, Zain $12/ user and Globacom$ 14/user.

The company’s network expansion plan is very much on course. Starcomms effective coverage now extends to 21 major cities in the country. The company’s coverage is expected to extend to 31 major cities by the end year. Management also stated that revenue projections were also on target.

Starcomms intends to adopt the Co-location of base station infrastructure with competitors with a view to reducing costs. It is expected that this measure would greatly reduce capital investment costs on network development.

Key strategies being employed by management in meeting its year end forecasts include, Aggressive growth of its higher margin data business, driving volume growth in its tele-centre business segment and development of product lines to cater for corporate customers.

While management has expressed great optimism in meeting its full year earnings forecast, we tend to adopt a more cautious stance in view of the company’s recent results. It is our view that the results for the next few quarters would be very crucial in determining management’s ability to meet key performance indices as stated in its offer prospectus. We will be publishing our recommendation on the stock once we get the required input for our financial model.

[princed]

Has anyone that bought the last PP via premium purchase recieved a certificate or cscs credited. no news from my stockbrokers

[hispy99]

Starcomms is committed to NITEL’s survival —Starcomms MD
Written by Princewill Ekwujuru
Monday, 24 November 2008
Starcomms Plc, the only telecomm company to be listed on the Nigerian Stock Exchange (NSE), has said it is committed to ensure Nigerian Telecommunications Limited (NITEL) comes out of its present predicament no matter what it would cost the company.

Mr. Maher Quiban, Managing Director of the company, said this when the company feted journalists, to thank them for their contribution to the development of the brand in Nigeria. He said no matter the problem that might have befallen NITEL, his company would support the effort made to enable NITEL stand on its feet again.

According to him, “we will do everything to make NITEL survive, because they are a Nigerian company, so we are. We believe in Nigeria.

“We have a dream for Nigeria. We have an obligation in Nigeria dream. We will not rest until we achieve the N1 per minute tariff. This is the best place to be and do business. We are lucky to be in Nigeria," he stressed.

He informed the gathering that Starcomms was the only telecommunication provider picked from Africa to speak at the mobility conference holding in China. This, he said, was an achievement on the part of the company.

He said Starcomms had over shot the two million subscriber base mark by hitting 2.2 million in subscriber base.

He said: “It is not difficult for a sophisticated telecom market like Nigeria to pick out the network that offers a superior network quality, providing the most advanced mobile, fixed wireless and broadband services with cost effective pricing.

Our fast growing subscriber base has wider access to the latest wireless technology and is quickly transforming their daily lives, enhancing their productivity and improving their economic status by using the vast selection of 3G services that we offer nationwide.

"CDMA2000 technology offered by Starcomms has given many Nigerians access to top-of-the-class voice services and broadband access to the Internet, along with a broad range of value-added data services for a wide range of users in both urban areas and rural areas," he noted.

The CDMA Development Group (CDG) was founded in December 1993 as an international consortium of companies that came together to lead the adoption and evolution of 3G CDMA wireless systems around the world

[JUmurhohwo]

There is nothing in the publication that suggests Starcomms plan to reward shareholder on their investments. Enough of this noise about Starcomms having over 2M subscriber base. What does this translate to in the price of the stock on the exchange? Starcomms result released so far was not encouraging(-ve). The management should focus on achieving success on their own first before talking of assisting NITEL.

[BLUEMONEY]

Originally Posted by hispy99

Starcomms is committed to NITEL’s survival —Starcomms MD
Written by Princewill Ekwujuru
Monday, 24 November 2008
Starcomms Plc, the only telecomm company to be listed on the Nigerian Stock Exchange (NSE), has said it is committed to ensure Nigerian Telecommunications Limited (NITEL) comes out of its present predicament no matter what it would cost the company.

Mr. Maher Quiban, Managing Director of the company, said this when the company feted journalists, to thank them for their contribution to the development of the brand in Nigeria. He said no matter the problem that might have befallen NITEL, his company would support the effort made to enable NITEL stand on its feet again.

According to him, “we will do everything to make NITEL survive, because they are a Nigerian company, so we are. We believe in Nigeria.

“We have a dream for Nigeria. We have an obligation in Nigeria dream. We will not rest until we achieve the N1 per minute tariff. This is the best place to be and do business. We are lucky to be in Nigeria," he stressed.

He informed the gathering that Starcomms was the only telecommunication provider picked from Africa to speak at the mobility conference holding in China. This, he said, was an achievement on the part of the company.

He said Starcomms had over shot the two million subscriber base mark by hitting 2.2 million in subscriber base.

He said: “It is not difficult for a sophisticated telecom market like Nigeria to pick out the network that offers a superior network quality, providing the most advanced mobile, fixed wireless and broadband services with cost effective pricing.

Our fast growing subscriber base has wider access to the latest wireless technology and is quickly transforming their daily lives, enhancing their productivity and improving their economic status by using the vast selection of 3G services that we offer nationwide.

"CDMA2000 technology offered by Starcomms has given many Nigerians access to top-of-the-class voice services and broadband access to the Internet, along with a broad range of value-added data services for a wide range of users in both urban areas and rural areas," he noted.

The CDMA Development Group (CDG) was founded in December 1993 as an international consortium of companies that came together to lead the adoption and ev