“The losses in Nigeria are embarrassing” – Telkom CEO
At Telkom’s annual results presentation Group CEO Nombulelo Moholi admitted that the company made some bad choices in terms of investing in certain areas, and particularly in Nigeria.
“A lot of the investments we made we should not have made. The losses in Nigeria are embarrassing,” she said. Telkom lost over R10-billion in just over four years due to the failed acquisition of Multi-Links, which it ended up selling for just $10-million.
“In the most recent financial year (to March 31), Telkom had to recognise a net loss of R896m for Multi-Links ‘mainly due to the cumulative amount of exchange difference previously recognised in equity’. It also incurred additional costs of R80 m during the year to exit the business,” MoneyWeb wrote.
MoneyWeb further explained that things for Telkom in the rest of Africa aren’t looking too great either. “It booked an impairment of R569m for its iWayAfrica ISP business. In 2009, it recognised an impairment of R85m for the business and in 2010, a further R41m. In 2007, it spent £10.32m on Africa Online, and in 2008 an additional R610m on MWEB Africa which has formed iWayAfrica. The nearly R700m impairment in the past three years means the purchase price for both these assets has all but been written off.”
Even with all the losses, the company is adamant that they want to expand further into the continent. “A footprint in Africa is desirable but not at any cost to the core Telkom business”.
Charlie Fripp – Consumer Tech editor