Steven Jackson, Business Reporter
Telecom provider LIME's young executives promised heckling geriatric shareholders new products, including cable TV service, by December but remained silent on profits and dividends at its annual general meeting on Wednesday.
"We are working hard ... and trying our very best to do that (attain a profit). It doesn't guarantee we will be successful, but you have the undertaking at this table, entire management and staff," said LIME Jamaica chairman Chris Dehring to a shareholder's query on when the company would return to profitability. Dehring is also the chief marketing officer for LIME Caribbean.
Investors are jaded by LIME Jamaica's four years of losses which have accumulated to J$13.4 billion, three years of no dividends, and an 80 per cent reduction in the stock price over five years. Roughly 200 of LIME's 25,000 total investors were present at the AGM held at the Wyndham Kingston hotel in New Kingston.
"We will turn this company around and we will rebuild that foundation in order to invent our future," said Dehring on behalf of the roughly 140-year-old company.
A choir of shareholders, most of who are graying, dismissed Dehring's comment, saying: "We have heard that before".
LIME, a former monopoly, has been hurt by the introduction of competition since 2000, led by Digicel.
Last year, LIME invested US$100 million to upgrade its existing second-generation or 2G networks to 3G. Customers in Kingston, St Catherine, St James and the north coast now have access to the high 3G mobile data speeds.
It made a net loss of J$6.1 million that year ending March 2011, doubling of J$3.4 billion recorded in 2009-10 when LIME's bottom line benefitted from J$2.2b of tax credits.
It paid taxes of J$1.6 billion last year.
The stock has traded within a band of 13 to 40 cents over the past year.
The new 3G service was twinned with a focused marketing campaign in Portmore, St Catherine, said Dehring.
LIME opened its 100th retail store in Portmore on July 2.
"We invaded Portmore with focused attack," he said in his address. "I believe they are going to rename Portmore Lime City."
Later, a sardonic shareholder with 1970s sideburns and matching tie responded: "What were you saying about Lime turning Portmore into a failure?"
Other concerns by investors related to the frequency of changing executives and customer service.
LIME's new strategy will entail growing revenues in services that it holds a position of 'market leader'. These include broadband and fixed-line services, according to managing director Garfield Sinclair.
"We are a full-service provider. We are not a mobile operator alone. For the last 10 years, I believe we have sort of evolved into a mobile operator and we allowed the competition to define the market for us. Going forward our strategy will not be pinned to a single product. We are the only full-service provider and we will emphasise that. Our dealers have evolved into solely mobile dealers. That is crazy and we are going to change that," Sinclair said, while indicating that last year mobile earned the lowest gross margin at 14 per cent when compared to other services.
"Fixed line and broadband accounted for nearly 70 per cent of our gross margin, so clearly there are other businesses that need to be tended to, and we are not going to continue to disproportionately allocate resources to a segment of the business that provides a fraction of our revenues."
Sinclair projects that in 2011-12 gross margin for mobile will grow to 20 per cent while fixed line will drop to 48 per cent from 49 per cent, and broadband services to 16 per cent from 18 per cent.
The proposed cable TV service would offer international and local channels including Peppa, an entertainment channel, and Faith TV, a religious channel, both developed by LIME.
The telecom firm issued a press release a day after the AGM touting its positive outlook and "dynamic Jamaican leadership".