Pay-TV operator, StarTimes, has attributed its non-profitability after 10 years of operation to naira depreciation. The company said it continued to record losses because the upfront investments in the business were made in U.S. dollars and the long-term cost recovery has met brick-walls with successive years of naira losing its value.
This came as the company declared its readiness for a forensic audit on its finances and operations as requested by the Senate’s Joint Committee on Finance and National Planning. NTA-Star TV Network Ltd, a joint venture between the Nigerian Television Authority and the StarTimes Group, has come under the scrutiny of the National Assembly recently over its non-profitability claim.
However, the Management of the company in a statement released today said: “Pay-TV business is capital intensive and has a long gestation period. More than 80 per cent of inputs into our operations are dollar-denominated. The naira fluctuations haven’t been favourable to the business, making it more and more difficult to meet dollar-denominated obligations.”
According to the statement, “gross earnings have been repeatedly ploughed back into the cost of production to cover the cost of components, namely transmitters, equipment, generating sets and satellite; content acquisition; as well as operating costs, which include salaries and other running costs, incurred within our ten years of operation.”
“NTA-Star TV Network Limited is a responsible corporate organisation, with our business activities conforming to statutory laws and regulations. Our accounts are audited by one of the big four audit firms in the world, widely known for their integrity and professionalism in the audit field. Aside from our statutory audits being carried out by external auditors, our financial activities are fully audited by the Federal Inland Revenue Service, FIRS,” the company stated.
“We however regret the outcome of the Senate hearing, especially as it amounts to a media trial without proper due diligence. To this end, we are open to a proper investigation into our operations and financials, especially as we believe the company is run in a prudent, responsible, and sustainable manner,” the company said.
StarTimes added that with the support and trust of the public and business partners, its operating environment is fast improving, performance is rising, and our losses have been decreasing. “We believe that as a going concern, we will eventually achieve profitability shortly and make greater contributions to society,” it said.
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